HOW TO SET UP A NEW OFFICE IN VIETNAM?
Background
On March 2018, Access Vietnam received an inquiry from our client in Finland (we called PXR Tech) who wished to set up an office and a team of software developers in Ho Chi Minh city. Our client is a high-tech company developing portable X-ray imaging solutions and security systems with the aim to help governments around the globe to increase the level of security for protecting their citizens.
PXR Tech wanted to find an office in Ho Chi Minh city for a team of 7 to 10 software developers. Together with PXR Tech, we defined the following K.O criteria for their suitable office:
– Size: 100 – 150 sqm
– Price per sqm: max. 25 USD excl. VAT.
– Rental duration allowed: 2 years
– Top priority is location to attract top employees. The office needs to be close to a University
– 24/7 security
– Parking availability for scooters and cars
– Possibility to expand within the same location within the first 2 years
Office search and evaluation process
Our office search was broken down to 2 main phases: Long list and short list.
In the first phase, we identified and created a longlist of more than 50 properties in Ho Chi Minh city that offers available office space with the requested size and price. The properties were divided into 2 main categories: office buildings and houses.
Access Vietnam phases in finding a suitable office
For every property in the longlist, we directly visited and met with the landlords and the real estate agents to check on our defined K.O criteria. We also took into account other factors that were important to our clients such as ability to set up rooms, ability to expand, conditions of the surrounded areas, attitude of the building management, fire safety conditions and so on. We noted down all details of each property and took pictures as references.
A sample of our photos at an office
From all the data we collected from the visit, we created a balanced scorecard to evaluate the suitability, compare and rank the properties. Based on the balance scorecard, we identified and recommended the top 3 properties that highly matched with PXR Tech requirements.
A sample of our balance scorecard
We supported PXR Tech representatives to pay a visit at our recommended properties. Prior to the visit, we requested the landlord to send us the leasing contract to check and negotiate on behalf of our client. On the day of our client visit, we helped with the communication and negotiation between the two parties. After the office visit, we assisted PXR Tech to find suitable furniture and equipment for the office.
Result
After only 2 working weeks, we identified 50+ potential matching properties and recommended 3 suitable office spaces in Ho Chi Minh city for PXR Tech.
PXR Tech was very satisfied with our findings and decided to rent one of our recommended property.
Picture of PXR Tech office in Vietnam
Tips in finding a suitable office in Vietnam
From this project, we want to share our experiences in finding a suitable office for your company:
1. It is important to establish a clear K.O criteria for your office in the beginning and evaluate which criteria your office must have such as security, proximity to a specific location, room set up, etc. This would save you a lot of time in finding a suitable property as you can cross out the properties that do not meet the defined criteria.
2. Pay attention to the renting price. Check what are included in the renting price such as management fee and taxes. Check on the electricity and water supply fees. To which extent do those fees cover? For example, some buildings include the electricity fee of the central air conditioners in the management fee while other do not. Likewise, some properties make you pay for the water used in the common areas such as toilet, kitchen whereas others do not.
3. Check whether you are allowed to make changes to the structure inside the office. Having the permission to design the room is an important factor when choosing a property as you may need to do some renovations. Some offices are divided into rooms with brick walls, plasters or glasses by either the previous tenant or the building itself. In case of plasters and glasses, most likely, the landlord will allow you to break them down and build new ones based on your design. However, the case can be different with brick walls which help to support the building structure.
4. Make a quick decision to reserve the office that you want to rent as the office spaces in Ho Chi Minh city and Hanoi, especially in the central areas can be taken at any time by other office-seekers. Generally, you will need to deposit an amount of the renting fee for 3 months to reserve the place.
5. Finally, carefully check all the terms and conditions given in the leasing contract. You have the right to ask for both the Vietnamese and English versions. You will need a Vietnamese partner to check on the Vietnamese version and report to you if there is any unfavorable or unclear term in the leasing contract.