“With the changes in policies and regulations, and with a progressing society, Vietnam has gradually become an attractive destination for foreign investors. One of the tasks required for investors to start doing business in Vietnam is setting-up a workplace area. Depending on the financial situation and the needs of the operations, the investor can consider choosing either traditional or shared offices..”
In traditional offices, the biggest advantage is the availability of adequate facilities to serve various needs such as reception and the needs of work life of employees. A well-designed office helps in impressing people visually, increasing brand image, and enhancing the company’s value. In addition, a traditional office also has the advantage of receiving and sending letters, documents, and calls from clients, avoid lateness, lost in delivery.
A traditional office will also help create a more efficient and focused work environment. It also helps in avoiding distractions, and also makes it easy to manage, use, control and allocate office resources (eg phones, printers, stationery etc.) in a uniform and efficient manner.
The construction, repair, and renovation of the office also involves more requirements such as contractor registration, insurance, deposit costs before construction and repairing items that need to comply with standards. In addition, it is difficult to find a small space in the central location for startups with little capital. An inconvenient location, far from the center of the city, can affect the company’s image or make it difficult to find suitable clients. Besides, relationship expansion is relatively limited to companies of the same floor.
The trend of renting shared offices is growing strongly in startups and small and medium enterprises (SMEs). An outstanding advantage of doing so is that investors do not have to pay operating costs such as electricity, internet, and management fees. Common or private working areas are shared by the lessors including furniture and other basic amenities. The lease term of a shared office is also shorter than what is required for a traditional office. Normally, tenants can rent a shared office on short term for 6 months.
In addition, startups at shared offices may have more exchange opportunities and more flexibility in expanding relationships with other startups.
Along with opportunities, when renting a shared office, investors also face challenges such as not having a fixed workplace with customers, and having to book meeting rooms prior to usage. Similarly, meeting equipment such as projectors and screens must also be reserved in advance. Additionally, preparation of hard copies is limited or charged based on the number of printed pages. There is no private space as it is affected by events held jointly for tenants. This could also make it difficult to build the culture of the company. Investors should also note that for some industries, licensing agencies will require an explanation of product storage in business activities. Therefore, in some cases, the shared office will not meet the conditions specified by law. Usually, shared offices are suitable for start-ups, small and medium sized companies with a small number of employees. Some shared office rental partners might have a private area for a company of 5 to 10 members but the cost is similar to renting a traditional office of small size.
Each type of office has its own advantages and disadvantages. To be able to choose the right office model, investors need to consider the size of the company, the type of business, the method of operation, as well as the budget and capital of the business.
Writing time: 03/06/2021
The article is based on the current laws at the time of drafting as noted above and may no longer be appropriate at the time the reader accesses this article due to changes in applicable law and specific cases that the reader wants to apply. Thus, the article is for informational reference only.