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2022 Vietnamese New Year: How Should Foreign Businesses Prepare

  • Vietnamese Lunar New Year, or Tet, is the most important public holiday in the country.
  • The longest holiday of the year marks a time of increased travel resulting in the closure of businesses, with planned events, and festivities during the holiday period.
  • Vietnam Briefing provides a general overview of the New Year Holiday including what businesses should expect and be aware of.

Vietnamese Lunar New Year (Tet or Tet Nguyen Dan in Vietnamese) is the most important traditional holiday in Vietnam and also marks the longest public holiday in the country with up to ten consecutive work-free days. 

The most important aspect of the Lunar New Year in Vietnam is the emphasis on the old traditions and family relations. For most Vietnamese, visiting their parents over the holidays is crucial; weeks before the holiday, flight and train ticket prices sharply increase, as people leave the major hubs of Hanoi, Ho Chi Minh City, and Da Nang towards their hometowns. 

Tet is the Vietnamese version of the Lunar New Year in mainland China, Hong Kong, and Taiwan but is also influential in areas with major Chinese diasporas, such as Singapore. Several other Asian countries, including South Korea and Vietnam, celebrate their own lunar new year holidays as well.

The date of the festival is dictated by the Lunisolar calendar and can therefore fall anywhere between January 21 and February 20. This year, the transition from the year of the Buffalo to the year of the Tiger will begin on February 1, though preparations begin already after the western new year and before. In 2022, the holiday begins from January 29 (Saturday) and lasts until February 6 (Sunday).

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Though Tet shares the same origins with the Chinese New Year, it is celebrated with unique Vietnamese characteristics that distinguish it from forms of the festival anywhere else. One example is the preparation and consumption of distinctive traditional foods with their own symbolic value (glutinous rice cake, braised pork dishes, pickled vegetables, and candied fruits among many others).

In celebration of the Vietnamese Lunar New Year, families will be cleaning and decorating their houses to prepare for the Ong Cong Ong Tao (Kitchen Guardians’ Day) ceremony on the 23rd day of the last month of the lunar year. This is usually the time of the year for family gatherings as families will prepare a feast to worship the three kitchen guardians and ask for a full kitchen for the rest of the year.

Red envelopes, or ‘Li Xi’ in Vietnamese, are commonly given to children, younger colleagues, and supporting staff during the Lunar New Year Period. The significance of these red packets is the red envelopes themselves, which are seen to symbolize energy, happiness, and good luck. Therefore, when a red envelope is given, this is seen as sending good wishes, happiness, and luck to the receiver.

Tet traditions and bonuses for businesses in Vietnam

One aspect especially business owners and also foreign employers should be aware of is the custom of paying a Tet bonus to each staff, which can be as much as a monthly salary or more.

During the 2021 Lunar New Year, over 30,000 businesses nationwide reported Tet bonuses with an average amount of VND 6.36 million (US$280), down 5 percent compared to the previous year due to the economic downturn caused by the pandemic.

According to a study by the HCMC Department of Labor Invalids and Social Affairs, the average Tet bonus was reported to be VND 8.8 million (US$386.76) this year, the same as that of 2021.

Despite the bonus not being a legal obligation, it can facilitate employee satisfaction and retention. More than a few foreign employers have seen their valued staff leave after the holidays due to the lack of a Tet bonus. Considering that the Lunar New Year is the high season for recruiting and job change, the bonus should be used to both motivate and retain employees. 

Without an obligated rate, it should be determined based on business results and the employees’ work performance. Though employees are entitled to a holiday break, some businesses might require or offer them to work during this time depending on the nature of the work or special requirements. This is more frequent for foreign businesses than local counterparts.

Disclaimer: The above infographic is for reference and displays data before the global pandemic. The pandemic situation with extensive supply chain disruptions and lockdowns might dim the expectations of employees this year.

However, to do this, employers must pay them at least three times the normal wages. In addition to cash, enterprises can reward employees in other forms. In fact, many businesses give Lunar New Year incentives to employees in the form of train tickets to return to their hometowns as well as valuable and expensive objects such as household appliances and motorbikes (which is ubiquitous to Vietnam).

Besides that, especially in business, it is customary to send gifts (normally imported delicacies or wine) to top partners or clients as a wish of good relationships in the upcoming year). Usually, people prefer buying a pack of gifts that include different kinds of food such as cookies, chocolates, fruit baskets, wine, soft drinks, and other treats.

This variety is intended to symbolize the wishes for a fruitful, prosperous, and successful new year. In 2020, according to a report from Statista, the three most popular gifts for business partners were spirits, wine, and local delicacies.

This tradition might appear problematic to foreign businesspeople from western countries, as giving gifts is often seen as a form of bribery and is highly regulated in various compliance regulations. However, the difference in custom and culture is worth to be considered and should be communicated to headquarters overseas in order to create an understanding of the local business culture that may require exceptions.

Any company doing business in Vietnam should be prepared to adopt local practices over this festive period. 

Business closures

Even though in 2022, Tet falls on February 1, businesses and factories in Vietnam will be closed for nine days, from January 29 to February 6. This includes five days promulgated by the Labor Code for the Tet holiday and the other four on the weekend for the 2022 Lunar New Year.

Banks and schools will also be closed during this time. To avoid delayed production and backlogs that can culminate up to one to two weeks before the holiday, factories should process orders according to their priorities and partner relationships.

It is advised that both manufacturers and buyers pay utmost attention to the ordering process. If the buyers place their orders early, problems with rushed production before and after the new year can be minimized.

Within the first week after the holiday, most businesses will slowly start reopening and planning their production, however, others might take longer to get ready for full operations.

Mass migration

Usually, millions of migrant workers in major cities will return to their hometowns to celebrate Lunar New Year with their families. This results in much-crowded airports, bus, and train stations prior to the holiday and during which, quieter and emptier streets in the cities. Domestic travel volume is likely to burst, especially the South-North route before-and North-South after the holiday. This is because many people from the North are moving to Southern cities for work.

However, this year may be a bit different. Within the past months, due to the pandemic, many workers were forced to return to their hometowns following business closures and a reduction in the labor workforce. It is likely that these employees will not return to the cities until after Tet. In addition, the discovery of the community transmission of the Omicron variant may deter people from traveling.

As of writing this article, the government has not imposed any stringent travel restriction measures, however, local provinces or cities may impose quarantine regulations and testing requirements for people traveling during the holiday. Local media has reported that some people have traveled earlier to complete their quarantine period before the holiday begins.

Therefore, before traveling or planning cross-region events, it is advisable to confirm COVID-19 testing and quarantine requirements with the local authority, hotels, and airlines in your destination city.

Potential delays after Vietnamese Lunar New Year

During the Lunar New Year period, the Vietnamese ports and port warehouses will be closed while the terminals continue to work full-time and are open for incoming vessels. The days before the festival, the ports work overtime and try to load all export cargo to unload all import shipments in time before the business closure.

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After the holiday, the ports will be back to full capacity when they resume work. However, they might have to deal with heavy congestion at the terminals. Businesses should expect delays created by the week-long closure. It usually takes longer in the North than in the South for the timelines to get back to normal. This may further add to supply chain delays.

Foreign businesses with supply chains in Vietnam are advised to stay in touch with their suppliers who may face labor shortages and ensure that products are able to be shipped on time. While the festival comes to a close, it often takes some time for things to fully return to normal again.

Public advisories

Both Hanoi and Ho Chi Minh City governments have announced that they will limit mass gatherings and have canceled the fireworks show which usually takes place during the Tet holiday.

Some provinces and localities have also encouraged employees to stay in place and not to go to their hometowns to help prevent the spread of the pandemic. However, the government has stopped checking testing and vaccination papers at airports for domestic travel unless travelers come from a very high-risk area or come from neighborhoods placed under medical isolation.

Holiday spending and stay at home economy

Due to the significant impact caused to the economy by lockdowns and job losses in 2021, holiday spending may be curtailed this year but some other business opportunities such as the stay-at-home economy may emerge.

Many Vietnamese have put health as a priority and have decided not to travel for fear of spreading the disease to their family. In addition, due to job losses, many people have decided to curtail spending money and buying gifts, that the Lunar New Year bonus was used for before the pandemic.

Holiday Greetings

The traditional greeting to wish your clients a happy new year is “Chuc Mung Nam Moi. It is customary to at least send a physical card or e-card to partner offices if the partnership does not require a gift.

In this spirit, the Dezan Shira & Associates Vietnam team wishes you a prosperous, successful, and healthy new year of the Tiger!