F**k Around, Find Out... That's how the statement goes and it can apply to so many things it seems. My friend, who legit had a real business idea and it took some time to get things rolling, we were all happy for him and the thing is, the business that he had was actually good, which is in stark contrast to the multitude of really bad business ideas that most people have in this country (as far as foreign owned businesses are concerned anyway.)
I didn't really even know that he was skirting the system but I did ask a few questions when he was constantly traveling to Saigon (HCMC) to set the company up. I remember asking him "why are you going to Saigon to set this up" and he would be very brief but explain that it was to save money.
While I didn't dwell on it too much, I do recall him saying something about how the financial requirements were $30,000 in Da Nang, they were only $10,000 in Saigon. It had never occurred to me that he was intentionally lying on his forms about where he lives and where he was operating, which is, as it turns out, exactly what he was doing.
It took some time, but the Vietnamese authorities figured him out. The main thing that got him busted was that he didn't pay any taxes because as is the case with many startups, he wasn't making any at the start. But the situation here wasn't just that. If that had been the only issue there might have been some amount of papers that could have been provided to show that the business was operating at a loss and from what I have experienced here in Vietnam in half a decade, is that the government is actually pretty reasonable. It isn't super-corrupt like in other SE Asian countries and they might have listened to this very reasonable argument of not making any money when a place first starts out.
The real problem here was that the non-payment of the tax was simply what got him put under the microscope, this simply got his paperwork noticed and when you set up your company in Saigon, then operate exclusively out of a city that is half the country away, someone is going to think (correctly in this case) that you aren't telling the truth about your company at all.
This is where he fucked himself. In an effort to save money on setting the company up, he ended up getting totally busted and now his company is going to be forcibly shut down. The thing is, the Vietnamese government is actually pretty kind and will listen to reason... but once you betray them, they basically don't want anything to do with you anymore.
Try as you may to plead your case and say "saaaww-wee!" it isn't going to work. I don't know the reasons why the setup amount is 3x in Da Nang what it is in Saigon, and I would imagine if I were to find out that I would think it is rather stupid, but that is the way that it is.
He decided to do something that so many people who are expats here decide to do, and that is to think that he is so much smarter than the government officials and that they will not catch me because they are too stupid to do so.
Well, he is singing a different tune now. Not only has his business license been revoked, but any attempt he makes at trying to establish another one is almost certainly going to also be revoked. Once you go on the Vietnam "naughty" list, you don't really get to come off of it.
He has also been processed with an "exit visa" and let me tell you, these are not awesome at all. The only time you need an exit visa is if you have been previously blocked from leaving the country because of some sort of legal dispute. The immigration officials at the airport will not permit you to board a plane. I would assume the same would be true at land crossings.
Once my friend uses this exit visa, there is an almost certain chance that he will be blacklisted for years from ever returning, even just for a visit. He also has had his $10,000 investment confiscated, which doesn't really matter because the existence of this capitol wasn't bonded (he didn't have to keep it somewhere) and that money is gone. Instead of the government trying to squeeze money out of him that he either legitimately doesn't have or is hiding really well, they have instead fined him 80,000,000 VND for the infraction (this is around $3200). He will not be permitted to leave the country until this fine has been paid.
So here's the lesson people: You are not smarter than the entire Vietnamese government and if you mess with them, they will not put you in jail, they will just show you the door of the country and then lock it on the way out.
I don't expect I will ever see this friend of mine again and hopefully his story will be something that others can take to heart. Just play by the rules. They are very reasonable rules, after all.
