[Question] How does commercial/retail leasing works in Saigon?

orangecake wrote:

Hi everyone!

I would like to open a "tiny" shop selling baked goodies and was wondering if retail/commercial leasing is similar to the states? Here in the US, the landlord will require you to sign a 2-10 year contract (the longer the contract, the cheaper the monthly rent).

Are there any short term options, such as month-by-month or 6 month leasing option in Vietnam? Any additional information you can share (such as risks) would be greatly appreciated.

Thanks in advance!

-Z

Not sure about the lease terms, but the monthly payment to local authorities' beer fund is valid for as long as you own the business, though.

Either pay up, or be harassed by the people who are supposed to protect you.

What's "leasing"?  That's a sarcastic question because people don't honor them.  Renters stay as long as they want and whenever they feel like it, they just pick up and leave.  There is no recourse for breaking a lease.  You don't have a "credit score" and there's no way to tell if a renter has broken leases on their last engagement.

This happens on the individual level as well as the corporate level.  Recently, some Korean companies broke their leases in Industrial parks and just quietly snuck away.  They also didn't pay their employees.

So you should just sign whatever the owner wants as long as the monthly payment is agreeable for you. 

To answer your question, Retail/commercial leasing is not similar to the States.

dtcali wrote:

Not sure about the lease terms, but the monthly payment to local authorities' beer fund is valid for as long as you own the business, though.

This is a hidden tax of doing business. 

Good luck in your bakery business.  You should sell baked pies since some expats have cravings for pies. 

https://www.expat.com/forum/viewtopic.php?id=284229

Do you know if there are formal leasing contract exist between the landlord and business owner?

If I was a local and if my bakery is doing good, can the landlord suddenly shut down my business? Or are there laws/contract agreement that can protect me?

Thanks

Of course there has legal contracts between the landlord and the tenant. If you are local or foreigner, most of the landlord who wish to get the rent punctually encourage your business. The remaining 'exceptional cases' filled with jealous may cause trouble even though you pay rent correctly
Some times law need to be silent here in front of money!

orangecake wrote:

Do you know if there are formal leasing contract exist between the landlord and business owner?

If I was a local and if my bakery is doing good, can the landlord suddenly shut down my business? Or are there laws/contract agreement that can protect me?

Thanks

Leasing contracts can be 1,2,3 years long and usually with the following general terms and conditions.

1. 3 month rent deposit (some landlords may only require 1 or two months)
2. if you terminate the contract earlier than your contract expiration date, you will loose your deposit. If its your landlord decision to termniate the contract early, she/he will have to return your deposit double.

NOTE: there are lots of cases where landlord see your business blooming and come back to ask for more. In this case, if you dont want to pay a higher rent they will kick you out easily and simply pay back twice your deposit then get other tenant in. This case happen a lot in VN. Lots of business owners experienced similar proplem and they receive rent increase request very regularly. If they choose to stay they may not be profitable and if they decide to stay they will loose all the money they have used to decorate the facility plus transition expenses.

Nevertheless, there are still lots of business owners those can manage to stay in one spot for long time and they are still doing well. In Vietnamese culture, having a sucessful business does not depend purely on good business plan, locations, or/and operation but also luck involved in the way . I wish you lots of luck.

Mandy

everyone, thanks for your feedback!

@ Mandy, I really appreciate your response and providing me with your detailed insight. This is exactly what I was looking for. You just saved me hours and hours of research. Thank you and thank you!