A contract in a thin-enforcement market is worth what it costs the other side to ignore it. That price is set by the court, not by the drafting, and in most of Southeast Asia the court sets it low.
Vietnam makes the point cleanly. Its legal system does not treat a distribution agreement as its own kind of contract at all, so the arrangement lives across the Commercial Law, the Civil Code and the Competition Law, assembled from parts never designed to fit together.1
More to the point: when the deal ends, Vietnamese law awards nothing automatically. A European distributor terminated after building a market has a statutory claim. A Vietnamese one has whatever the paper says, and whatever a court will make of it.
So the clause is the wrong place to look.
Phạm Thị Hương Giang, who works as Jang Kều, ran the Vietnam operation of an American flavour and fragrance house from 2003.2 Her arrangement was half the profit for building the market, and she built it: a Hanoi branch inside a year, a Bangkok expansion scoped by the second.
Then the market worked. “Once the market became successful, the owner replaced me with a salaried director so they could keep all the profits.”
The better solution was to work as an independent business partner under a clear business cooperation agreement, rather than as an employee.
Put to her that the fix was a stronger employment contract, she said no, and gave the sharper answer: “The better solution was to work as an independent business partner under a clear business cooperation agreement, rather than as an employee.”
That correction is the whole essay.
A contract in a thin-enforcement market is worth what it costs the other side to ignore it.
The protection was never going to come from the wording, because the wording had nothing behind it. It came from moving to a seat where removing her cost the other side something real.
Consider what actually changes. An employee who builds a market can be replaced for the price of a salary, and the customers, the stock and the supply contract all stay where they were. A principal who builds the same market holds the purchase orders in her own company’s name, carries the inventory on her own balance sheet, and can point every customer at a different supplier by Friday.
The counterparty’s cost of removing her moves from one hire to a rebuild.
She did exactly that. Her own distribution company, her own choice of suppliers, direct principal-to-distributor contracts, and eventually a Singapore holding structure over the whole thing, selling ingredients into food, cosmetics and pharmaceutical manufacturers across Asia.3
The position is not free, and pretending otherwise would be the easy version of this argument.
A principal funds the stock. She carries the credit risk on customers who pay late, the currency risk on imports, and the dead inventory when a formulation gets reformulated. An employee on a profit share carries none of that, which is exactly why the profit share looks so attractive on the day it is offered.
That is the real trade: the profit share is a call option with no capital at risk and no enforcement behind it, and the principal’s seat is capital at risk with enforcement built into the goods themselves.
The rule has a limit worth naming. A principal with one supplier has moved the dependency rather than removed it, and a supplier who terminates her is in the same position her old employer was, holding the brand while she holds the customers. The protection scales with how many principals she carries.
Which points at the practical version. In a market where the paperwork will not hold, the question to ask of any arrangement is not what the agreement promises, but what the other side would have to rebuild on the Monday after they removed you.
If the answer is a salary, the paper does not matter.
Footnotes
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Distribution agreements in Vietnam are governed by a patchwork of the Commercial Law, Civil Code and Competition Law, with no dedicated statute and no automatic compensation on termination. ↩
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Interview conducted for CÈ by the CÈ AI interviewer, 19 August 2026; quotes lightly normalised for print, wording untouched, transcripts on file. ↩
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GroupG Asia Pacific, founded in Singapore in 2012, supplies flavours, fragrances, stabilisers and cultures to manufacturers in Asia and runs offices in Ho Chi Minh City and Hanoi. ↩