Challenges and opportunities for business in Vietnam- A comparative perspectiveMarch 13, 2014

2

Nokia in Asia

• In China Nokia is one of the largest Whole Foreign Owned Enterprises in China, with presence since 1985 and two major mobile phone factories.

• In India, Nokia has been running the currently world´s biggest mobile phone factory since 2006.

• In Vietnam, a new mobile phone factory opened summer 2013.

• In these countries, and many others, also sales and marketing teams and in China and India also R&D.

3

The circumstances in Vietnam• All in all Vietnam offers a modern environment for a global export

business - there are diverse operating models for a foreign investor.• Benefits are based on legislation: If one fulfils the criteria in the

legislation, the benefits will be granted to you. The culture is not one of customised models per company.

• The phase of negotiating the investment certificate can be slow and bureaucratic.

• Vietnam´s ability to utilize the benefits of digitazation and ICT are unique in Asia, eg. electronic customs clearance functions well.

• Some challenges still in terms of supply of adequate competences, the Government needs to work on improving the education system.

• At the same time bringing in foreign workers to bridge the competence gap is not easy enough.

• Some pressure for using local suppliers – there is a need for the Government to work on improving the skills and competencies of the local companies.

• Corruption has not been an issue for Nokia even though it is said to be common in Vietnam generally.

4

Success factorsVietnam- When negotiating the investment certificate, a deep knowledge of the legislation

is a key.- At this stage also a good relationship on the high, central government level is

important.- In the on going business stage the relationship with the local authorities gains

more importance.China- Understanding the national interests and the priorities of the 5-year plan, as well

as and target alignment. - Understanding the key performance indicators of the central and local

government officials.- Building and maintaining a network of senior officials who are sympathetic to your

causes, on central and local levelIndia- Engaging experienced local lawyers and consultants. High risk ratio at the

moment.

5

Other points to pay attention to

Watch the following factors- Economic situation – e.g.budget deficit?- Political stability – upcoming elections?- The stage of industrialization – impact on cost

development?- Membership in WTO?- General administrative culture - based on legislation or

personal relationships? - Do you have flexibility to react to increased risks caused

by the above factors?

Thank you