What you need to do before buying a company in Vietnam – Overall assessment

Buying a company in Vietnam requires conducting careful assessment process.
Main Contents

Investing in an operating company in Vietnam is a popular choice to tap into this vibrant and promising market. A key advantage is the ability to start generating revenue right away by keeping the operations unchanged after the transfer of ownership.

Furthermore, it saves you a lot of time and resources to build the brand reputation, and a network of customers, partners, suppliers, and others. The hired employees are invaluable assets when they know the company, market, customer behavior, and deep involvement in the company SOPs. They are all strong reasons for considering buying a company instead of starting from scratch if you want to enter the Vietnamese market.

However, before making any big and important decisions like acquiring a company, there are a few things you need to know and aspects to assess the company’s potential for growth and performance. This article will give you the important aspects to assess and look into as a first-time buyer of an operating company in Vietnam.

What is general information about the company you are interested in?
1/ Understand the Reasons for sales

One of the most important reasons you should look into when shorting the list of potential companies to buy is the reasons that the owner(s) want to sell the business.

There are many reasons for selling a company. The owners have different business plans, they want to move to another location, they have different personal plans, or even the company is in a negative financial situation. In reality, one of the common reasons is that the owners have different directions; they sell the business to avoid a long and time-consuming dissolution procedure.

In reality, some business owners decide to sell the company instead of taking back as much of their investments, and they can use the money to start their new plans.

2/ Knowing the shareholders and type of ownership

Actually, the number of shareholders will let you know their business structure and in case you buy the whole business, you might need the agreement from all of the shareholders. This will save you time and process the next steps smoothly.

On the other hand, the type of ownership will let you know exactly what are the next steps to move forward. The steps to change from a locally owned business to a foreign-owned, or between a foreign-owned to other foreign investors (between the same or different nationalities).

3/ Assessing the resources at the time of transfers

Human Resources: Understanding the company structure and the number of employees you have left after the transfer will give you more information about the business. How they are doing, what needs to be improved, if you need to hire more to fill, and other concerns.

Moreover, you will have a bird’ s-eye view of how much the employment expenses are each month, so you can plan the company budget more efficiently.

Assets and properties: Ensuring the company’s property value matches the purchase price requires engaging a reputable valuation firm for a comprehensive assessment. It’s vital to appraise tangible assets like equipment and facilities, along with intangible assets such as sub-licenses, trademarks, and copyrights. This meticulous evaluation guarantees a just and precise valuation of all assets in the deal.

4/ Location, leasing terms, and rental fee

Another aspect is the location of the business and the leasing contract. Some businesses like restaurants, bars, gyms, and so on will consider location as one of the most important aspects. Therefore, carefully checking the location will bring you highly valuable information.

How much rental time is left, the rental fee, and other terms? All of that information will give you a heads-up if you need to extend the contract or find a new place.

5/ Visiting office

In many cases, both parties engage in online communication, primarily through emails and chats. Requesting photos of the operational business can provide assurance of the quality of the purchase. Real-time images can also serve to confirm that upon acquiring the business, all furniture, equipment, and assets will be transferred to you.

We highly recommend visiting the business and arranging a face-to-face meeting with the sellers whenever possible.

6/ Price structure

On occasion, the cost of the desired enterprise may exceed your initial expectations. A comprehensive comprehension of the utmost buying price facilitates expedited decision-making and enhanced financial planning for subsequent business activities following the acquisition. 

Typically, the selling price is determined by the value of the company’s assets and existing resources. A business may have a distinct selling proposition that determines whether it commands a high or low selling price. Engaging the services of a professional service to accurately assess the genuine worth of the business is highly advised to comprehend the viability of the price being offered.

7/ Urgency to sell the company

Negotiating with business owners involves discussing the purchasing price and other terms. If the owners are eager to sell, they may prioritize closing the deal quickly, possibly at a reduced price.

How can VNBG assist you with buying a company in Vietnam?

VNBG is proud to be a complete solution consulting firm in Vietnam with an expansive understanding of the market and the business culture. We have a large database of companies that need to be sold in Vietnam with highly verified information for you to consider.

More than that, we act in the best interests of our clients, providing comprehensive support throughout the acquisition process. Our experienced team will assist you with market research, due diligence, value assessment, negotiation, and legal procedures to ensure a smooth and successful acquisition.

Moreover, we also offer post-acquisition services such as accounting, recruitment, and other secretarial services to help you maximize the potential of your newly acquired company.

Buying a company in Vietnam can be both exciting and challenging. With VNBG’s expertise and support, you can navigate through the complexities of the Vietnamese market with ease. Trust us to find the perfect fit for your business goals and secure a successful acquisition. Book free consultation meetings with us now for more information on how we can assist you in buying a company in Vietnam!

 

Picture of Micheal Dinh

Micheal Dinh

Marketing Manager

Main topics

Trending

Follow Us

inquiry

Sign up for our Newsletter

Leave your email if you want to receive our update in future.

Chat with our consultants
Iris International/VNBG
Hello 👋
Can we help you?