Today on Friday notes we follow up on our discussion regarding Tax Structuring In Vietnam and SE Asia. Granger Whitelaw Is joined by Jack Nguyen, partner at Mazars Vietnam, as we profile his company and the multiple Integrated services they offer for small companies & global leaders as well. We hope you enjoy the show!
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Below is a transcript of the episode, edited for readability.
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Granger Whitelaw: Good morning. This is Granger Whitelaw with The Lotus Talks Friday morning. I hope you all had a fabulous week. It’s been a really busy week here in Vietnam for searching and all of Southeast Asia. the Corona virus seems to be surrounding us all daily, taking up so much Mindshare, of everybody. it’s really becoming taxing on a lot of people are in this week, Vietnam started to tighten the borders even more than they had, limiting flights, to an extreme level coming from any infected areas. If you are looking at traveling, please check ahead of time to make sure that where you are going and where you’re coming back from our clear for travel. You don’t want to get stuck out of the country, or unable to return without being quarantined. And just a little bit of, thoughtful, research ahead of time – call the consulate general if you need, if you’re American — or your Embassies and get information and so you can really be prepared. it’s a major issue now as people are trying to, continue doing their business. And Vietnam certainly is trying to keep their people safe, and all of us safe. So, it’s just about communication, clear communication working together, which is not always so easy.
Granger Whitelaw: So with that, I want to talk to you, about a company who I think is doing a great job, advising people on the subject we talked about Monday, which was tax structure for businesses in Vietnam and Southeast Asia. And today we have returning with us, Jack Nguyen, who is a partner at Mazars and Jack, thanks for coming today.
Jack Nguyen: Thank you Granger for having me here. And it’s a pleasure coming back again.
Granger Whitelaw: absolutely. Do you have a good week?
Jack Nguyen: I did a busy week. It’s funny how the, how the week goes by is very fast and it’s already Friday,
Granger Whitelaw: right? Yeah. Screams by .. somewhere I saw you, I saw you at an AmCham event for a VBF.
Jack Nguyen: Yeah, that’s right. That was a good event.
Granger Whitelaw: And you stole my battery charger. Borrowed,
Jack Nguyen: borrowed. I believe I did. Return it
Granger Whitelaw: so you can keep doing your work for your clients at Mazars, you were working.
Jack Nguyen: That’s right. That’s right – always working.
Granger Whitelaw: So,really enjoyed our talk on Monday, it was, it was shared and viewed by thousands of people. I saw a bunch of the stats on it. I know that you certainly shared on LinkedIn, they had tons of followers and some great feedback. Really, tax structuring, for businesses and individuals in Vietnam. And Southeast Asia is a very important subject. So on Friday notes we like to profile a company that is doing that, well and also giving back to the community, which you guys do. So I just want to kind of like go over some overview and then you can fill in the blanks for us. Possibly. Now you guys specialize in audit, accountancy, advisory. So advisory’s a big term.
Jack Nguyen: That’s right. That’s right. And advisory can range anywhere from, you know, supporting merchant acquisition transaction. We would do, offer due diligence services, whether it’s legal or tax or financial
Granger Whitelaw: You do legal M&A advisory work?
Jack Nguyen: Yeah, we do. We do some, legal advisory work
Granger Whitelaw: in house – at Mazars?
Jack Nguyen: Yeah. Okay.
Granger Whitelaw: So you do legal as well as the accounting and the finance, structuring.
Jack Nguyen: Yeah. The legal, legal not so much. just more administrative work that DD that we do. but definitely tax and financial due diligence. We would do that. we may also represent, you know, buy-side transaction or sell side transaction, on an M & A deal, for consulting that that’s just a wide array of services that we can help a company businesses with, whether it’s putting it intricate control, putting in their ERP system or put in better business processes. You know, those are some of the services that we can help our clients in.
Granger Whitelaw: Transfer pricing issues and IFRS, and international duty and tax issue customer.
Jack Nguyen: that’s right. All those tax related advices.
Granger Whitelaw: Important stuff – at VBF I think Mark Gillen was talking about, some of the successes that they’ve seen an tax is a really hard one, right. To get, consensus from the government on right. Cause the government wants more taxes from the companies and the companies want to pay, pay less. But, he was, he was saying that, there were some good successes that they had seen. And, and even though it was a little bit of a change, it was a big change that affected business in a positive way. So working with the government, is important here.
Jack Nguyen: Yeah. Yeah. And like Mark said, you’re not going to see a big, complete change over right away, but it’s a process. It’s a step, a step change. And, and I’ve talked to Mark before and I’ve given them some advices and you know, we’ve worked with the government, sometimes there’s frustration, but they do definitely, listen to us, to the advisors and they do, you know, put in the changes in small steps.
Granger Whitelaw: Yeah. He was, I think he was mentioning a limiting deduction limit of interest as a ratio of EBITDA. Right. and how it deals with a related or unrelated party expenses and you know, clarify that with the government. And I mean, you know, guys, it can be sound like boring stuff, but it’s not, if you’re here and you’re manufacturing your exporting
Jack Nguyen: and our clients appreciate that. I mean, you know, any way that we can help them redo tax or reduce the bureaucracy, I mean the, they’ll, they’ll appreciate that.
Granger Whitelaw: And then Mazars – So you were a partner there, you interface as a company with the government or you interface through VBF or AMCHAM and other organizations
Jack Nguyen: yeah. I mean, I, I’m involved with AmCham, VBF. I attend their two meetings a year. you know, just trying to, I guess, lobby on behalf of our clients. Some of the issues that they faced
Granger Whitelaw: Represent
Jack Nguyen: represent is a better word. we’ve got to be careful using the word lobby. and, and, and our, you know, our clients, you know, sometimes they face, issues, issues, frustrations dealing with tax authorities. But, you know, I mean, you know, there’s ways to help them,
Granger Whitelaw: help guide them. That’s what you’re there for. Right. That’s why we’re talking about this. Yeah. So you have 40, almost 41,000 professionals at Mazars in 91 countries and territories. Is that correct?
Jack Nguyen: That’s correct! And Mazars history, came out of world war two, an individual by the name of Robert Mazar started a small firm. And since then, you know, it grew in France, I think in France Mazar is the most recognized accounting firm, in the country. And then we started expanding throughout Europe and then Asia,
Granger Whitelaw: It was founded Paris?
Jack Nguyen: Yeah, that’s correct. and, and now, you know, we’re, we used to be referred to as a French firm. Now we’re truly a global firm where we have presence in 91, countries with more than a thousand partners worldwide. It’s amazing.
Granger Whitelaw: Its amazing – I mean, you really gives you the ability to go from, from small to medium size enterprises all the way up to global infrastructure. and how does that work from a, a communication standpoint I gotta imagine that having an organization that big, you have resources you can reach out to and anywhere and get expertise on a supply chain or other issues with the cross-border issues. And
Jack Nguyen: yeah. Yeah, for sure. The best thing about Mazars, which is different from a lot of the big international accounting firms, is that we’re one independent integrated firm, meaning that a partner in Vietnam, has the same, partnership as with partners in France, partner in the US, whereas other firms are independent, local member firm of a worldwide brand, for example. So because we’re integrated,
Granger Whitelaw: You’re integrated, yeah, – integration is a key thing for you guys, correct?
Jack Nguyen: That’s correct. So all, all the partners are part of the global partnership. and, and the beauty with that is that our resources, our information, our intelligence, our all share within all the, all the countries. And so, you know, we have a database, templates, best practices that we look at, that we use. you know, that we can refer to.
Granger Whitelaw: Now there’s this, there’s Mazars North America Alliance. I was reading about, it’s an agreement between Mazars and five leading firms in the United States and Canada. comprising of BKD, Dixon Hughes, Goodman, M & P Moss Adams and Plante Moran. So I actually, I’m probably bastardizing that name Plante Moran. The Alliance really expands the presence in North America, right Yes, yes. And, and, and brings you in some other expertise. Do you ever tap into that, Alliance?
Jack Nguyen: Yeah, definitely. I mean the, we enter into the Alliance with these North American firms last year and the reason behind that, that’s right. It’s a year old. The reason behind that is that in North America we don’t have as much a presence as we’d like to. whereas our clients are answering the North American market, they want to use the Mazar brand. so with this Alliance, with these firms, so we are allied with, we can use the resources that they have to serve our clients entering the North American market.
Granger Whitelaw: Yeah. That brings you another 16,000, certified professionals. Yeah.
Jack Nguyen: That we have access to.
Granger Whitelaw: That’s just always, to me. That’s so complex to me. I mean, I’m just a little guy, right I don’t know. I just try to make the microphone sound good. But, but when you get into these, you know, global companies with 40,000 employees , and then you enter into a partnership like that where you have professional services firms and how you communicate how you firewall information on clients, the confidentiality. I mean, it’s gotta be really complex and, and I, I wouldn’t even know how you would begin to do that. Right I mean, you don’t want to have conflicts of interest. I know legal firms conflict checks are a big thing. Yeah. And, and how do you do that How do you really manage that process
Jack Nguyen: Yeah, I mean, I mean, we have a system, globally, where we check for, for a client and for independence, for conflicts. for example, we bring in a new client. We have to go through a KYC process and independent check. Yeah. Yeah. An independent check, to see whether we can serve this client or not. I mean, we are this client’s auditor, they’re in another country. Then we can’t do, you know, other cities provide other services for them.
Granger Whitelaw: So you can, you could, if they were getting audited in Singapore, you couldn’t do their audit here,
Jack Nguyen: we can do the audit here, we justcannot provide other services for them.
Granger Whitelaw: Oh, other services, right. So wherever there, the client is the key headquartered kind of thing. That’s right. That becomes an account manager, if you will, effectively, but you can do local services. Correct. Correct. Yep. That’s cool. And you need that local, that local, intelligence and experience too, right. Because these countries are so diverse. Yeah.
Jack Nguyen: And each country have their own, systems, laws, regulations.
Granger Whitelaw: What are the things I was curious about Jack is, you know, you have the international tax law, right Yeah. Accounting practice, sorry. Yeah. International accounting practice. And then you have gaap, right In general accounting practice, which we use the United States. That’s right. And I believe every country in the world is on one or the other, with the exception of Vietnam, which has its own tax structure. Is that,
Jack Nguyen: yeah. It. So most of the countries in the world now are, have adopted or, or will be adopting what’s called IFRS, international financial reporting standards. so that’s one standard. globally, the U S have their own U S gaap. the generally accepted accounting principle and I don’t know what the latest is on when they will adopt a IFRS, but in big Nam, they have what’s called VAS Vietnam accounting system. But I know that the, the ministry of finance, has a roadmap for adopting FRS in the next few years. so companies, local companies are starting to gear up and prepare for that, conversion.
Granger Whitelaw: Yeah, I’ve heard that they were certainly looking at to do that so that they could more easily, especially for FDI companies investenting here, they can more easily communicate and attacks or counting standards. Standards. Yeah. Yeah. It’s interesting. It’s just so complex yet you don’t think about it, right. I mean, people are like, gosh, I have to call my accountant and I need to get this done. But the amount of work you have to study to know this stuff must be amazing.
Jack Nguyen: Yeah, that’s right. And that’s why firms like us exist to help the clients. you know, we, you know,
Granger Whitelaw: a huge value. That’s right. Cause I was talking to a, I won’t say who it was, a senior partner at a big law firm here. And he said to me, man – you know, I, I get kind of an elbow from the Vietnamese clients. Sometimes my rates are, you know, really high, much higher than local. Yeah. And, law firms, and, and maybe it’s the same with some of the international accounting firms. And you know, the reality is though, the experience and the depth and breadth of value that you bring is, worthy of every dollar. Right. And then you can’t be shortsighted when you hire a professional services firm, a yours or law firm. You want the best.
Jack Nguyen: Yeah. And that’s right. Our auditors are, you know, from managers and up, need to be qualified professionally in their qualified with a ACC, which is a professional account as a nation from the UK, so, you know, these people have gone through extensive training experience working with international accounting standards. so that’s what, you know, clients are paying for when they come to us and know companies need to make sure they’re compliant.
Granger Whitelaw: If you got a company in terms of M&A from Singapore or Hong Kong or investing in Vietnam or you know, or reverse, you know how to do that properly within the Vietnamese legal system and the accounting system. Yeah. How to do that within the banking system because you have to set up special accounts. You have to make sure that you transfer the capital correctly, take it in, take it out, protected properly. That’s right. Law firms cant do that with you and your services firm like yourself.
Jack Nguyen: That’s right. We, we, you know, we can definitely guide our clients through those hurdles.
Granger Whitelaw: Any, any funny stories you want to share or any, any crazy transaction that you can remember or changes that affected you and your, your in your 10 years or so here?
Jack Nguyen: Yeah, I mean, I’ve been in Vietnam, collectively. I mean, I’ve been here, this is my second tour. I was here in late nineties, you know, a young auditor coming, too big now from North America. And you know, I’ve done some audits here and some of the stuff I’ve seen here, I’ve never seen it before in my career. I mean, in terms of proper bookkeeping and financial reporting. And then anyway, that’s where there was understandable. So really,
Granger Whitelaw: yeah, I’ve heard audits here are just….
Jack Nguyen: yeah, so since some of the audit reports I had to write, I’ve never written before, so I really had to refer back to my books in university to, to write up these, some of these qualifications.
Granger Whitelaw: Wow. Crazy. Come along. I literally can go on for months here, right. The audits and, but we all get into the all of that too much. But, well, listen, Hey, thanks so much. I mean, there’s so much to talk about and we could probably have multiple sessions on this. you know, I would love to talk to you about, some other, more topical specific subjects if you would like to come back. And I think we should talk about, one big thing I see here in Vietnam is succession planning.
Jack Nguyen: Yeah, sure. we can certainly talk about that and I’ll be happy to come back and talk.
Granger Whitelaw: Let’s do that. Can we do that We’ll do that next week. Maybe a Monday. We’ll start a little early and I’ll buy you coffee.
Jack Nguyen: Sounds good. Thanks. Granger
Granger Whitelaw: . Thanks Jack. Everybody out there. I hope you have a great weekend. hopefully you, you’ve heard a lot about matures and, and please reach out to Jack when and from if you have any issues with any of these items we’ve talked about or others, I’m sure he’d be happy to answer them for you. have a wonderful weekend. Please. You know, stay safe, stay healthy. hug your kids. How do your wife love your friends up a lot And, we’ll be back Monday to talk to you some more. This is Granger Whitelaw for The Lotus talks. Thanks so much.
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