2019 Guide to Import to Vietnam

With average annual GDP growth of more than 6% over the past two decades, Vietnam is among the fastest-growing economies in the world. However, despite becoming a more open economy, import to Vietnam is still highly regulated by the government. In this article, we are going to explain some of the key elements you need […]

With average annual GDP growth of more than 6% over the past two decades, Vietnam is among the fastest-growing economies in the world. However, despite becoming a more open economy, import to Vietnam is still highly regulated by the government.

In this article, we are going to explain some of the key elements you need to know when planning to import to Vietnam.

This article was originally published in August 2017 and last updated in April 2019.

Why import to Vietnam?

Quickly developing infrastructure

According to the Asian Development Bank, Vietnam invests nearly 6% of its GDP on infrastructure development which is almost double compared to other emerging markets in Southeast Asia.

Quickly developing infrastructure is alluring foreign investors to set up manufacturing companies which, in turn, encourages the import/export sector.

import to Vietnam

Source: Bloomberg

Trade agreements and openness to foreign direct investment

Over the past 30 years, Vietnam has been reforming and transforming itself into a globally minded economy. Vietnam has become a member of the WTO and is also a part of numerous international partnerships, including free trade agreements with partners both within and outside the region.

Additionally, Vietnam offers several tax incentives to foreign investors. For example, investors who contribute to specific geographical regions or sectors of particular interest, such as high-tech or health care, can enjoy some tax benefits.

Growing middle class

Vietnam’s middle class is growing at a rapid speed. Market research firm Nielsen has even estimated that Vietnam’s middle class will rise to 44 million consumers by 2020, compared to 8 million in 2012, making Vietnam a nation with one of the fastest-growing middle classes in the world.

Vietnam’s middle class is already thought to be responsible for more than 50% of the country’s total consumption. We see companies like Chanel, Versace, and Armani opening stores in Saigon.

These companies execute extensive market research before entering the market, indicating that Vietnam has enough of potential purchasing power to attract foreign brands.

And rightfully so, since Vietnam ranks 6th in AT Kearney’s latest Global Retail Development Index (GRDI).

Find out more: Top 11 Reasons to Invest in Vietnam

Understanding Vietnam import regulations

Licenses for importing to Vietnam

To import to Vietnam, you need to obtain an investment license and a business registration certificate from the Department of Planning and Investment (DPI).

There is no separate import license in Vietnam – the investment license already allows you to import or export products. You also don’t need additional licenses if you are planning to wholesale your goods to businesses.

However, if you want to sell your products directly to consumers in Vietnam, you need a trading license. It will take 6-12 weeks to obtain a trading license, and you can apply for it after the incorporation and once you have paid the capital contribution in full.

Keep in mind that you need to know the products you are planning to import before applying for your investment license. If your company wants to import additional products in the future, you must also change the investment license.

Product registration in Vietnam

To import certain products to Vietnam, government level of approval is necessary, and you cannot import these products unless they are registered. For example, cosmetic products must first be registered with the Drug Administration of Vietnam before any trading can take place.

Read more on how to import and register cosmetic products in Vietnam

Other products that are subject to registration are, for example:

  • drugs and food supplements
  • processed products from vegetables, fruit, grain
  • wine and cigarettes
  • essential oils, perfumes, cosmetics
  • milk and dairy products, eggs, honey, and other animal-derived products

Importing those products is possible, but it requires additional steps. Emerhub handles both the incorporation and product registration process. Reach out to us for a consultation at [email protected].

Import taxes in Vietnam

Most goods imported to Vietnam are subject to duty. Imported products are subject to import tax and value-added tax (0%, 5%, or 10%). Tax rates vary depending on the type of product.

For example, consumer goods, especially luxury goods are usually subject to higher tax rates than machinery, raw materials or equipment used in production.

However, Vietnam is a member of the ASEAN Free Trade Area and intraregional import taxes for certain products range from 0-5%, including products such as:

  • livestock
  • meat and fish
  • fruit and vegetables
  • medicaments and pharmaceutical goods
  • agricultural machinery

To demonstrate the import tax calculation, we have provided some simple formulas and illustrative examples in our previous article on how to calculate import tax and duty in Vietnam (import duty calculator included).

Prohibited products

Circular No. 34/2013/TT-BCT of the Ministry of Industry and Trade brings out a list of products that foreign capital companies cannot export from, or import into, Vietnam.

For example, some of the products that you cannot import to Vietnam include:

  • cigars
  • tobacco
  • petroleum oils
  • newspapers and journals
  • second-hand items (including electronics and automotive)

How to import to Vietnam?

To import to Vietnam, you must have a legal entity registered in Vietnam. Therefore, you have two options for importing to Vietnam.

Option 1: Set up a trading company in Vietnam

In general, it takes one month to register a company in Vietnam. If you also want to engage in retail sales and sell the products that you import to Vietnam to direct consumers, you also need a trading license which takes 6-12 weeks to acquire.

However, note that you can already start importing your products once your company is registered, but the trading license is still in process.

import to Vietnam

In general, there is no minimum capital requirement for setting up a trading company in Vietnam. However, the capital you inject must comply with your planned expenses.

Emerhub can assist you in establishing a company in Vietnam. We will take care of all the paperwork and communicate with the authorities on your behalf.

More on the requirements in our previous article on how to set up a trading company in Vietnam.

Option 2: Import to Vietnam using an importer of record

If you don’t want to set up a legal entity in Vietnam or wish to test the market by importing a few shipments, you can use an importer of record instead.

What is an importer of record (IOR)?

Importing to Vietnam using an importer of record means that you don’t have to acquire any import licenses or set up a company in Vietnam. Furthermore, with an IOR you can start importing immediately.

Among other benefits of using the importer of record service, you are also exempt from tax liabilities since we will cover the taxes.

 

import to Vietnam

Using a nominee registrar

As already mentioned, some imported products require registration.

Emerhub can also act as your nominee registrar. In that case, Emerhub will make the announcement/registration of the product and share with the importer for the customs clearance.

Contact us via [email protected] or leave your details in the form below for a complimentary consultation. With our experience in the market, we are happy to help you import your products to Vietnam.

Popular products to import into Vietnam

Many sectors rely heavily on imported goods. For example, Vietnam imports over 90% of its medical equipment as well as cosmetic products.

Over the previous years, Vietnam’s top imports have been, for example:

  • Computers, electrical machinery, and equipment
  • Telephones, mobile phones, and parts
  • Iron and steel
  • Mineral fuels
  • Optical, technical, medical apparatus

At the same time, we see a shift in the Vietnamese market structure, taking the lead as a manufacturing country due to increasingly more skilled and cheaper labor force compared to China. Additionally, this increases the demand for raw material, technical and electrical machinery.

Read more:

Vietnam’s biggest trade partners

According to the General Department of Vietnam Customs, Vietnam’s main import partners in 2018 were:

Country

Value in US$

(percentage of total imports)

1. China

106.7 billion (22.2%)

2. South Korea

65.7 billion (13.7%)

3. United States

60.3 billion (12.6%)

4. Japan

37.8 billion (7.9%)

5. Thailand

17.3 billion (3.6%)

6. Taiwan

16.3 billion (3.4%)

7. Malaysia

11.5 billion (2.4%)

8. Germany

10.7 billion (2.2%)

9. India

10.7 billion (2.2%)

10. Hong Kong

9.5 billion (2%)

Products with the most complicated import regulations

While some products, such as medical devices, can be imported to Vietnam quite easily, others can be listed as complicated products. 

For example, products such as:

  • cosmetics
  • telecommunication items
  • animal feed
  • health supplements

These are goods which either require additional licenses or for which the Ministry of Trade only gives out a limited amount of import licenses.

Obtaining necessary licenses for these products is not impossible, but, in some cases getting your hands on the license or outstanding local distributor may turn out to be more expensive, time-consuming and complicated than originally anticipated.

However, stricter regulations also make the competition weaker, and Emerhub can handle the process of product registration on your behalf.

Ready to start importing to Vietnam?

Leave your details in the form below for a complimentary consultation. Our consultants are happy to help you import your products to Vietnam.

Since 2011, Emerhub has helped over 500 companies of all sizes enter Southeast Asian markets.

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