E42: I've been a business lawyer in Vietnam for 20 years. Here's my tips for newcomers!
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But this is how things are done. And I think this is important to realize when you come to the market. Welcome to You Don't Know Vietnam, the show that demystifies Vietnam for global audiences by talking to the creatives, trendsetters and business owners who have taken on the market. Forget what you thought you knew about Vietnam. It's no longer that, as you're about to find out. I'm not.

I'm Ian Paynton, co-founder of We Create Content, a content marketing agency that builds audiences for global brands in Vietnam. We make global brands relevant among Vietnamese consumers on a daily basis. On this episode of You Don't Know Vietnam, I'm talking to business lawyer Jerome Boulanet of DFDL Vietnam.

Jerome helps global companies do business in Vietnam and has done so for 20 years. If there's anyone who can advise you on the legal side of operating here, it's him. So if your company is looking at Vietnam as a place to do business in 2025, this episode is definitely one for you. Today, he tells me about his experiences that shaped his understanding of Vietnam's business landscape and why it's such a tricky and opaque market for outsiders to immediately understand.

He also tells me about the mindset global brands should adopt if they plan to enter Vietnam as their next growth market.

Jerome, oi. Oi. Welcome to You Don't Know Vietnam. Thanks for coming on. Thank you. It's a pleasure being here. Me and you are in completely different sectors, completely different industries, but I think we have some things in common in that we help global businesses and brands understand Vietnam and do business in Vietnam. Me from a creative and audience building point of view and you from a business point of view. Yeah, that's correct.

20 years! You must have seen some stuff. This week, 20 years this week, yeah, this is, this has been a great ride, honestly, very interesting ride. Congratulations on 20 years, two decades. Not sure I can get any congratulations for that, it's just getting older, you know? You definitely know Vietnam, right? A bit. I discover more stuff every day, and this is what is fascinating about being in this country.

There's always something, isn't there, that we don't know? Yeah, and things change so fast. Why is that? Why does everything change so fast?

That's probably touching on many, many subjects, but it's a dynamic country. It's a dynamic society. People are hungry for more and really interested in getting better and getting more. So yeah, that's it. I feel like laws are changing quite quickly as well. Regulations and... Yeah, the practices are changing very often. The laws themselves are changing regularly, but not very quickly.

What does change often is tax regulations and their implementation. This is changing all the time. This is really, really complicated to be on top of things when you're a tax lawyer. I admire tax lawyers actually very much for this. Yeah, that's been my experience as well, setting up my own business here. Yeah.

You always want to be checking in with those quarterly tax updates. Of course, yeah, of course. No, and this is why also practice is so important in this country. You can know everything about the theory and then just be on the wrong track completely because the practice is very different.

I often say that whatever you read, even like six to eight months ago, is probably out of date. It's moving that quickly. Given that you've been here 20 years, what are some of the key milestones that have shaped your understanding of how to do business here, would you say? Interesting question. I'm just going to really focus on things which are related to my practice as a lawyer. First thing, I guess, is when things are not ready, nothing moves and you can't really push it.

I remember the times in 2004, 2005, where investment bankers were coming from all over the world to meet us and really try to put a foot in the door to understand a bit more about what was happening there. They wanted a slice of it. They really wanted to be able to do business here. And that was something that was coming along Vietnam-Hungary.

adhering to the WTO and the WTO commitments becoming implemented. And before that, nothing really was on the map for these investment bankers. When they started catching up with it and getting interested in it, then you could really see that things were moving. The other thing, which is very legal and a bit technical, is, to my knowledge, the first private equity investment in the country.

That was in 2006, where TPG Ventures invested in FPT. Everybody knows FPT. This is a big conglomerate of IT and services in the tech industry. So that was back in 2006. For years, Vietnam had allowed FDI, foreign direct investment, and foreigners were setting up new entities for factory, for production.

And that was possible. But really, an investment by a foreign investor into an existing Vietnamese company wasn't something that the law contemplated. And very often, and this is actually a very interesting feature of Vietnam, when the law doesn't permit something, that means you can't do it. There is no path to do it. And like all the countries where it's not prohibited, then you can do it.

And so back then, major private equity player TPG was looking at FPT. FPT was going to list. And just a few weeks before listing, TPG invested in FPT. And that was only possible because the Ministry of Justice granted some kind of allowance for the deal to happen. And obviously, soon after, the law changed and enabled FPT.

investment by foreigners into Vietnamese companies. But that was really the first step. And that was also a signal that when things are ready, when things are aligned, then you can do things here. But before they are, you can get stuck and wait forever.

The other things which have impressed me on understanding how to do business here is sadly witnessing of the failure of certain joint ventures for bad reasons. There is never any good reason for a failure, but business reasons where the market is not ready or the business plan is not good. But I'm talking about joint ventures between Vietnamese players and foreign players for bad reasons where it's mainly an absence of alignment. Very often,

foreign players when they come into joint venture they are trying to get the best deal and this is the mindset generally people have when they get into a deal but a joint venture is a kind of marriage and when there is this unbalance in the marriage at some point of time maybe not at the beginning but maybe five years down the line or or 10 years and one of the players

don't get a good deal anymore and is not interested anymore, then these are paving the path to failures. And I've seen that happening. So my advice generally to foreign investors coming here and willing to partner with local players is always to ensure that throughout the life of the joint venture, there is an interest for both parties to continue being interested in making the business successful. That's, I think, something that applies to other countries, but

That's very true for Vietnam. The other milestone, I guess, is starting my own business. Initially, Sourdough Bakery Cafe, which very quickly transformed into a chain with now eight locations in Ho Chi Minh City. This is really showing how quickly things can go when you are on the right market, when you have a good business plan.

But also, this showed me how practical you need to be when you run a business. And as a business lawyer, I've always advised on the theory, the risks, the issues, obviously the practicalities. And I often leave my clients with all the tools to decide. When I started my own business, then I had to, based on what I knew about the risks and issues, make my own decisions.

And this somehow opened my eyes on a few things which I think are critical for doing business successfully in the country. Like what, Gerard? So many things. I think looking at the big picture and closing your eyes on the less important issues, recruiting and finding the right people, basically, and keeping them interested, aligning interests. That was...

Something that we found challenging, dealing with the authorities also was something that was new because that was so practical and so down to earth. Yeah. Everything about running a business on the day to day, basically. Yeah. I love what you say as well about when things aren't ready, things won't move and you can't force the issue in Vietnam. Did you learn that straight off the bat? Did you go through a period of

in your own experience where you were like, no, come on, this needs to happen now. Let's speed it up. And what point did you realize that's just not the way it works? Luckily, when I arrived, I worked with people who had been in the country for a while and with many good Vietnamese colleagues who helped me discover that. But yes, in the beginning, I was obviously possibly getting frustrated quicker.

And when things weren't moving the path I wanted, and I learned how to understand how things are progressing. And I learned also how to push for alignment of interest around my own goals. And that takes, what, like years? Oh, I'm still learning. I'm still learning. Why do you think it is difficult and tricky for outsiders to get involved?

The culture in Vietnam is very different even from other cultures in Asia. So even for Asian investors, it's complicated somehow to understand things. One of the challenges for outsiders is that things change very quickly and sometimes dramatically. Also how the practice may differ from what is written in the laws or else. I find also that the role of

Vietnamese women in the society is shaping this difference and making the Vietnamese market so unique. When you're investing here, when you're building a team here, I think the role played by women is very different and probably bigger than in most other countries. Our team in the law firm is 90% composed of women and how great they are.

And I'm joking with lawyers of other countries when we talk about gender balance in the workplace and how maybe in Vietnam we should be favoring male professionals because they're underrepresented. Why also outsiders have difficulties understanding Vietnam culture?

Possibly the approach of the Vietnamese people to opportunities and their pragmatism in challenging times. The way which always impressed me on how a Vietnamese person would see an opportunity, size it, irrespective of whether he or she has any plan and any idea even how to realize the opportunity and implement it.

Size it now, think about how to do it later. And this is really in line with what I've witnessed in the last 20 years on how business people have actually been able to succeed and sometimes fail, obviously, because taking on too many opportunities without a plan is not always good.

But this is how things are done. And I think this is important to realize when you come to the market. It sounds to me like all of those things are what makes Vietnam really, really unique as a country and as a culture. And they're the things that you just have to get to grips with through experience from being here, from living and breathing Vietnam, from working in Vietnam. Are you experienced or able to tell me about the role of women and why that's

So in Vietnam, and maybe not in other countries, I've spoken to people on this podcast, Vietnamese women, who have said, I've traveled a lot globally. And I don't think there's anywhere else on the planet that has the same opportunities for women as Vietnam does. Are you able to tap into why that might be? I think you would need to talk to an anthropologist or someone.

social sciences experts. But in what sense are they different? Perhaps in the family cluster, the Vietnamese woman is really at the center on many of the financial aspects of the household, and perhaps also on how the Vietnamese woman is structuring the family.

where everything which is related to the planning and the financial security of the household is in the hand of the lady. What has always impressed me is how Vietnamese ladies are striving to have a very good role as a key family member and taking care of the kids, taking care of the feeding of the family, and at the same time able to

do passionately their job and being successful in their job amounting to 16, 18 hours of work a day and being very good, very good on both sides, both at home and at work. So that's, I think, something that is very unique in Vietnam because that's really the norm rather than the exception in other countries.

I feel like we could talk about that stuff for ages. I always feel a little bit cautious of two white men speaking about Vietnamese women on a podcast. And I'm probably not the best place to talk about it, really, honestly. No. And I do cover it with Vietnamese women as well. But I still haven't got to the bottom of it. Like, truly, women are heroes in folklore, in wartime. There's stories of women...

heroes and soldiers. And I'm convinced Vietnamese women absolutely run the show in Vietnam. Yeah, at home, at work, in government? Probably a bit less so in government, but this is changing. Given your two decades of experience as a transaction lawyer helping global businesses, what would you say are the most common challenges they face when entering the market or when trying to do business in Vietnam?

Yeah, challenges or perhaps mistakes, but the key mistake I see made by international players is taking best practices for granted, basically. In the West, notably, or in more developed countries, respecting IP, high ethics in the Western sense, privacy are all things that are just the base. And here in Vietnam, it's something that is a work in progress on all fronts.

This is changing very quickly, but the understanding of Vietnamese person on the street of how important it is to respect the intellectual property of someone else is very limited. And everything which is available is considered as available and usable. Whereas obviously in more developed countries, this is not the case. So I find that just understanding this and making sure that

When you come to the market, you have the right tools and the right procedures to ensure that everybody understands that this is important for you and give tools to the players you surround yourself with so that they can actually comply or align with your understanding of these best practices.

The other issue that I see faced by international players, and this is very legal, is the level of bureaucracy or the type of bureaucracy you find here. Vietnam is very much a country of form over substance, where what is written, sometimes in two, three, four, five, ten sets of copies in an application file, is more important than what is actually underlying the project.

which is subject to the application, for instance, in the legal field. And yes, red stems here are so important. Keeping the seal as an element of power in a company is something that you rarely find in other countries. And I think it's important to understand that, to structure your business in a way which aligns with the way business is done here.

The other mistake I see made very often from international players new to the market is also imposing their work style and their culture at work. I think the Vietnamese people are very eager to learn new things, things which come from overseas. They are really eager to become more international. But at the same time, there are things which are deeply rooted in the habits. And one very good example I always give is how...

employees in offices and elsewhere just nap after lunch. In more developed countries, seeing employees napping at the workplaces can be perceived as something very negative. But here it's something that everybody does and this is just part of the culture. And I've seen Western bosses trying to change this at their workplace and dramatically failing because it's just going against something deeply rooted.

And once you've accepted it, then you realize that napping is very productive because then you can be more productive with the rest of your day. And if you just skip it, then you have frustrated and less productive employees. Nassed off employees. Yeah, exactly. People who feel not respected feel that...

It's not worth working and basically gradually living or not being involved as much as they could in their job. And this has also something to see with a broader picture or a slightly related element of the Vietnamese culture is all the entrepreneurship that you find in most Vietnamese person here. So second job or third job are very common in Vietnam or side business.

Unlike many other countries where you have your nine to five job and you're just satisfied with it here, you want more. And when you're good at something, why work for a boss? And why not starting your own company? Do the same, do it better and do it for yourself. So what would you do then if you had a baker in one of your bakeries that started a side hustle baking and was snapping the recipes away?

of your bakery, and then posting pictures on Facebook and selling cookies at the weekend, which looked a lot like your cookies or your loaves of bread. This happens all the time. This happens obviously very, very often. And this is just a rule or an habit that you need to accept. Because if you're fighting against it, then you're not going to be successful. I think it's important to create a working environment, which is

pleasant, be mindful of how much information you give away, but you need to share and you need to trust people and you need to be disappointed sometimes and continue improving your offering so that you stay ahead of the game. Employees using your secrets or using your tools to compete or do side businesses is happening all the time.

And I think this is very much linked to other points we've mentioned before. Best practices in the Western sense are not accepted as such. And the working style is very different here. So you wouldn't sack that employee? As long as the employee continues performing well for the business and doing their job properly, I wouldn't. No, I wouldn't.

I would look obviously and making sure that not too much is given away to make his side job more successful than mine, but this is common sense. I like the point you said as well about just keep focusing on innovation, making your products better. I guess followers will always be followers and imitation is the best form of flattery, right? Exactly. Yeah, fair enough. Once someone copies you, then she's a compliment that the market is giving. Could you...

Just describe a little bit more about the form over substance. In Vietnam, a document that is not signed and sealed with the official seal in red, affixed above the signature of someone allowed to represent an entity, it's worth nothing, although it's legally debatable.

But this is just the way it is. This is the way business has been run for years. And this is in the mind of business people here, in the mind of the authorities and the officials there, the way it should be. This is really formalistic. And this very same document without a stamp that may be equally valid will be completely disregarded. That's one example. The way the administrations are looking at any request of permit, for instance,

is very much ticking the box on every single document that is meant to be in the application being there, irrespective sometimes of the actual content of it. And this is also very much the way the tax administration is looking at things for the moment, although this may be changing. If a paper has been filed at the right time, then this is fine.

Although the actual substance of the transaction behind the document may be very different. The authorities here tend to look at how it's written, how it's documented, rather than what is implied underneath. I see. So in some ways it seems quite rigid, and in other ways really flexible. Yeah.

Yeah, I mean, the rigidity is an obvious feature of how the administration works here. But underneath that, it's quite flexible. It can be quite flexible if you get it right. Yep, that's one way to look at it. And this is also why things are sometimes a bit unclear or willingly left unclear by regulations which list a certain number of documents without exactly saying what the document should say.

Hence, enabling the authorities a lot of discretion in the review of the documentation submitted to them. So all of this said then, what kind of mindset should global companies adopt when working in Vietnam or when coming to Vietnam to do business? This is all related with the other points we discussed, but I think respecting the local culture and habits is very important.

I find that managing people's face issues is very important in the country. You can only get anything out of a relationship which you have frustrated. Unlike perhaps in other countries where people are, from that perspective, a bit more flexible and where things can be fixed, it's very difficult to continue doing good business with someone you have had a face issue with.

I completely feel that one because when I first got here and was doing content on behalf of a client, we had made them this in-house magazine. And I'd come from a publishing world where a deadline was a deadline, right? And it had to go to the printers at a certain time. And I remember the art director, it was about 1130 and he was really dragging his heels. We were trying to get it out for 12 noon that day. And the art director just went for lunch and left.

I kind of said to him, what are you doing? The deadline was at 12 and you've gone for lunch. In my home culture, we would have all stayed behind and probably not eaten until the job was done. But lunch was most important. And I really had a go at him. And he came back and said, you can't talk to me like this. And I lost face. I lost a lot of face because I didn't respect the local culture.

and the habits. Thankfully, we managed to save that relationship and we'll still be friends and do business together today. But I felt quite embarrassed actually about that. Yeah, that's a very interesting example. And there are so many. And I think you have to just go around it and by understanding better how things are done, then help managing the expectations of your clients, given the constraints.

and work with your own team on preparing earlier and planning better. I find it in project management that being clear on the expectations from the beginning and having clear, willingly, very conservative interim deadlines in the project is very useful because as a matter of fact, very often deadlines are not respected and therefore if you have a buffer then you're in a better place to continue managing the project properly.

I guess he probably knew as well that the printers were at lunch, so nothing was going to get done. Yeah, and that's also understanding the wider picture. Very important. Right. I think the other tip you can give to new players coming from outside would be to accept that there is not one global solution that fits all situations in Vietnam. This is basically adapting to what the constraints are.

keeping in mind what is important to users and goals and managing all the complications along the way. Aiming to build long relationships is critical. Nothing happens quickly in this country when you're coming from outside and you know nothing about it. I have seen so many times clients coming to me and telling me that the deal will be signed in two weeks and close in a month. And I, for a long time, was trying to convince them of otherwise.

and explaining to them why and what could go wrong and what would be different. And in the end, I think I have now taken the approach of listening, gently saying that you believe that it will take longer and let your client come back and realize by themselves

Obviously, I'm volunteering any help in managing the tricky situations, but I think the reality is that it always takes longer than anticipated here. And believing that a fresh relationship can be fruitful is, I think, erroneous here. It doesn't mean that it won't be fruitful, but to be sure, you need to nurture it and have the time and experience to help grow the relationship in a way which is

brings trust, which is very important in business relationships here. The other key mindset that I think international businesses should have is also understanding the limitation of planning. And it's a bit strange in a country where everything is planned at government level and at sub-government level and at local level. Everything is according to a plan, five years plan, a 10 years plan, etc. It's all planned.

Planning here doesn't mean that this is something that will happen. I think it's more about what may happen. And I always try to reflect on the plan as someone having understood or articulated that this might happen by that time or in that way, rather than a firm actual plan in the sense we understand it in the West that is going to be done by a certain time.

And here, again, pragmatism is very important. And the Vietnamese people are pragmatic in the way they are dealing with any situation. So having in mind a plan is something that might happen rather than will happen. And an understanding that things can change using a bit of pragmatism in the implementation of our own plan, I think in Vietnam is useful. Still on the pragmatism and practicability, practice is so important.

Especially in the legal system, everything which is written in the law is something that theoretically can happen, but in reality, it may not happen. Many laws are not implemented. Laws of higher level need implementing regulations to be actually enforced, and without them, nothing happens. We've seen in the past many new laws coming, very important laws coming live.

And three months, six months after the laws having been passed, still no implementing regulations being issued for many reasons. Sometimes politically there is no alignment yet for a regulation on an important subject to be passed. Sometimes it's opportunistic to enable certain interests to be favored, but irrespective, the law won't be implemented by local level authorities, for instance, if the implementation rules are not

In some instances, because the laws are not very clear, the local authorities take different views depending on the location. So you'd have Hanoi, Ministry of Planning Investment having a policy on a certain aspect and how things should be done. And the same authority in Ho Chi Minh City or Da Nang taking a different view. So if you just stick to the letter of the law, you hardly go anywhere. And our lawyers are always obviously looking at what the law says, but

how it's implemented in a specific instance or location. That's something critical for building the right advice. And I think businesses should understand that and in their dealings should also check how people do business, how people deal with an issue, because it may be very different from the way it's written. And very open to different interpretations up and down the country. Right, yeah.

Exactly. Wow. It's complex, isn't it? What a job you've got. Indeed. I'd like to end these episodes by asking you, what are you most excited about for Vietnam's future? Oh, that's a very good one. I've been so happy to be here for the last 20 years and see the massive changes.

in all respects, and very much improvements, I have to say. In the legal business, on the legal side, everything has just been better year on year. Sometimes things take a bit longer to be going to the next step, but retrospectively, things have only gotten better. Generally, for Vietnam, what I would wish or what I would be excited about, it would be, I think, the transition from production-focused production

goal to an innovation focus where the energy and creativity that is laying underneath and apparent sometimes is actually coming on the forefront and making Vietnam a very creative and innovative country. And I think this is coming. This is coming very soon.

You've been listening to You Don't Know Vietnam. I'm Ian Paynton from We Create Content. I'd like to thank DJ Jace from The Beat Saigon for their epic soundtrack and a massive thank you to you for making it all the way to the end.