What are the concerns to be kept in mind when choosing the most suitable business model for sourcing in Vietnam?

When selecting the most suitable business model in Vietnam, it is important to carefully balance the capability of each option against the primary needs of the sourcing activities. For example, foreign small and medium sized enterprises (SMEs) that consider Vietnam an unknown market may prefer the low capital risks associated with an RO. However, at the same time, the wider business scope and operational flexibility that a limited liability company (LLC) offers may also be tempting. At the other extreme, an overseas company that has been purchasing directly from Vietnam for many years may wish to take full control of the supply chain through a trading company but may be deterred by the heavy operational complexity of such an entity – a trading company involved in exporting goods is directly involved with Vietnam’s complex VAT system and has to comply with customs requirements.