International Finance: Vietnam Investment Strategy and Funding Mix

This report analyzes the strategic aspects of a retail business's expansion into Vietnam, addressing key considerations for international finance. It begins by evaluating the most suitable company structure for the investment, considering factors like liability and taxation, and recommends a limited-liability company (LLC) structure. The report then delves into the optimal financing options, comparing debt and equity financing, and emphasizes the flexibility and speed of debt financing for immediate capital needs. Domestic borrowing is also considered, highlighting its flexibility, ease of repayment, and cost-effectiveness. The report further examines the political and economic landscape of Vietnam, discussing the political stability and the prevalence of corruption, providing insights into potential risks. Finally, the report suggests strategies to mitigate potential delays in project initiation and the importance of cash flow management, including upfront payments and accelerated payment terms. The conclusion emphasizes the importance of a comprehensive risk assessment before investing in Vietnam.

Contents
Introduction................................................................................................................................1
Answer 1....................................................................................................................................1
Answer 2....................................................................................................................................2
Answer 3....................................................................................................................................3
Answer 4....................................................................................................................................3
Answer 5....................................................................................................................................4
Answer 6....................................................................................................................................4
Conclusion..................................................................................................................................5
Bibliography...............................................................................................................................5
Introduction
This assignment is just a due diligence of a business which is currently running in Australia
and wants to expand its operations in Country Vietnam. Below are the answers of everything
you need to know before investing in Vietnam and how to invest in Vietnam.
Answer 1
Vietnam is the leading investment place in Southeast Asia. With the benefit of geographical
area, natural resources, and a reasonable labour force, Vietnam attracts a huge amount of
investment each year. Vietnam has a number of unfamiliar sectors and a growing customer
market. There is a hybrid way of doing partnership and limited liability company (LLC), is
also gaining in some status because it will allow proprietors to take advantages of both the
type of benefits of both the company and business the form of partnership. The rewards of the
business set-up are that gains and losses that can be passed without taxation through the
owners of the business itself while owners are protected from the personal type of liability.
Company Structure of a limited-liability company should be adopted. Your only risk is the
capital that you brought in your own business. Also, debts related to business and other types

of liabilities won’t be swept out of assets belonging to you. Caution: If you guarantying your
debt personally, then you've lost your form of limited liability.
Simplified Taxation. All types of Gains and losses will be conveyed and will be taxable on a
return filed by the individual. There's no different commercial tax return unless you are
having more than one shareholder and you choose yourself to be charged as a partnership,
and there's will be no business "double taxation,". In Double taxation business enterprise and
the stockholders are taxed.
Management is Flexible. A member can be any person or a partnership or can be a company
also. Members will get a percentage of their ownership. If people are not able to manage out
from your type of knowledge, then you can hire help from management. Smaller types of
LLCs are typically managed and organized by members, but they are not permanent.
Distribution is Flexible. Gains and losses need not- be circulated in percentage to the money
every person is putting in. A regular business corporation form of business can't assign gains
and losses. And in a business corporation form of business (taxed in the form of partnership),
gains and losses are in percentage of the shares held. (Tseng & Tseng, 2019) (Ahiadorme,
Gyeke-Dako & Abor, 2018)
Answer 2
If there should arise an occurrence of business credit, you're generally responsible for how
the additional capital that you are endeavouring to spend gets spent. A few loan specialists
likewise force certain limitations, yet for the vast majority of the part, what you're subsidizing
is up to you. A business advance won't leave an enduring effect on how your business gets
run, other than the advance consumptions you'll owe.
Obligation financing is an adaptable kind. There are endless differing sorts of business
propels with wide assortments in how a lot of money you'll get and to what extent you'll
make repayments. In the event that the business needs money as right on time as would be
prudent, at that point it ought to be financed through obligation part as it were. You can get
business credits amazingly quick in merely hours, on the off chance that you put on to the
correct moneylenders. In the interim, value financing includes finding for the correct
speculators, jumping your business, drawing up the legitimate papers. In any case, on the off

chance that you are searching for more than cash than value alternative is correct most likely
for you. Obligation financing is value-based. You will acquire from banks; at that point, you
will pay back what you owe. Value speculation will dependably give you access to an
investor's information, contacts and a sort of specialized skill. You get the opportunity to
make an association that could have a monstrously beneficial outcome on your venture,
insofar as you've done organization with the right individuals. On the off chance that all you
need is additional cash in your financial balance, once in the past it may be best not to engage
with investors. (Kalim, Arshed & Shaheen, 2019) (Haj Youssef, Hussein & Christodoulou,
2019)
Answer 3
Domestic borrowing is flexible and on time draw to allow the client to suit urgent cash flow
requirements. Also, Repayments can be made easily by simply crediting the operating
account. And also, domestic borrowing Support business clients in case of short-term
mismatching of cash flow and are mainly involved in working capital requirement. Also,
there will be a fixed interest rate for the duration of each drawing made by the investor. Also,
there is no maximum loan amount. All requests are also considered on their credit policy.
Flexible terms are available to meet your business needs. There will be maintainable liquidity
management due to longer duration to match with cash flow. It will support the borrower to
mobilize bigger loan equating to bilateral loan at a similar period. Also, there will be a single
point of contact by directing through the bank who is arranging the finance. It will also help
to develop a new relationship with the new bank. Domestic borrowing is also cost effective
and it also requires very less administrative burden. (Bettiga & Ciccullo, 2019) (Donald,
2019) (Brun & Karaosman, 2019)
Answer 4
Vietnam is controlled by one and only gathering state Communist Party of Vietnam (CPV)
which gives determined bearing and chooses all central arrangement issues. The nation is
additionally driven by the purported four regal columns which are fundamentally CPV
General Secretary, State President, Prime Minister, and National Assembly Chair. The
arrangement, which incorporates embracing relentlessness, holding the political position quo,
local financial development, and worldwide mix, is made on an understanding premise by the

Politburo. Provincial security, particularly in connection toward the South China Sea, is a
principle outside approach criticalness for the CPV. Gathering pioneers and the pioneers of
the organization are chosen after at regular intervals at the National Party Congress. The
freshest Congress was held in January 2016 and in May 2016 a national decision was held to
choose the 500 Deputies who will make up the National Assembly, Vietnam's authoritative
body. Vietnam is a standout amongst the most politically stable countries in South East Asia.
Its initiative won't respect any dispute. The inward fight is uncommon despite the fact that in
2016 and 2017 there were a minor number of prominent complaints incorporating into
connection to a situation calamity in Central Vietnam. Land rights additionally stay to be a
wellspring of open choppiness. There are extreme cut off points on the right to speak freely
which can trouble web use, especially the use of internet-based life and private sites, access
to which can be stuck without notice. Predominant press outlets remain completely under the
control and course of the Communist Party such a significant number of people pursue self-
administering bloggers for their news refreshes. Numerous bloggers endure disturbance,
capture, and confinement for censuring the Communist Party. (Lamberti & Pero, 2019)
(Noman, Rahman & Naka, 2015) (Rakotomavo, 2012)
Answer 5
On the off chance that there are intricacies in initiating tasks and the presumable beginning
will be three or months after the fact than the first a half year proposed firm ought to do these
things to beat this kind of hazard. There must be legitimate arranging and planning that are
essential for maintaining income. One approach to expand the income is mentioning for an
upfront instalment at whatever point you begin accepting a pre-request. That way, you'll have
the option to pay your uses and that as well while keeping some sort of benefit aside. There is
another method for expanding money development is approaching your customers for
quicker development request and instalments. That way, if the customer is late on an
instalment, regardless you'll have some an opportunity to pick up the pace. The third way is a
next to no abnormal and it completely relies upon your help with your own merchants. Along
these lines, support from each viewpoint is required for a time of a quarter of a year. The
promoting group should endeavour to draw in new clients. (Nguyen & Harrison, 2019)

Answer 6
Degenerate practices are broad in-nation Vietnam. On the off chance that anybody is
occupied with any business in Vietnam should experience, and in any event ought to be set
up for the experiences of defilement in some sort structure kind of structure. Practices, for
example, rearrangements instalments, influences and giving and getting costly endowments
in direction to create business relations are still normal. There is likewise almost no lawful
freedom in Vietnam and misuse remains a difficult issue in the court structure. The Party
Leadership and Government have straightforwardly dedicated to talking defilement and have
taken a numeral of material activities, including supporting and refining hostile to
debasement laws, developing enemy of debasement techniques, fortifying significant
associations and endorsing the UN Convention against Corruption (UNCAC). Vietnam's
score on Transparency International's 2017 Corruption Perceptions Index has improved by
two points to 35/100, putting a nation like Vietnam to 107th out of 180 nations in. This
expansion is despite the fact that the unobtrusive that mirrors the Government's recharged
energies to handle debasement and furthermore including another Law on Access to
Information, which is working at a moderate pace however. Be that as it may, this has just
been converted into halfway activity on the ground as counteractive action and requirement
action stay weak amid this period. (Xu & Xu, 2018)
Conclusion
The investor should consider all the factors whether social, economic or political factor
before investing in Vietnam. All types of risk and return has been discussed in this Report.
Happy Investing.
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