Table of Contents
Introduction
The US-China trade war has triggered a global supply chain shift, prompting many UK businesses to relocate production from mainland China to Southeast Asia. Vietnam’s proximity to supply chains, coupled with low tariffs from multiple Free Trade Agreements (FTAs) and abundant labour resources, has made it a top choice for investment. In 2023, bilateral trade between the UK and Vietnam reached USD 17.86 billion, making Vietnam the UK’s 11th largest trading partner.
Whether you’re new to the market or an experienced player, UK companies aiming to export to Vietnam must thoroughly understand the country’s import and export regulations and procedures. This guide compiles key regulations to consider before starting trade in Vietnam, serving as a concise reference for businesses.
Disclaimer: Import and export regulations in various countries may be updated periodically, which could lead to discrepancies with the information below. Therefore, businesses are advised to collaborate with freight forwarding companies, such as SL Global Logistics. Their expert team stays up to date with global import and export regulations, providing timely and accurate advice.
Preliminary Steps
Vietnam – Import and Export Licensing Procedures
Vietnam does not require companies to obtain a standalone import/export licence to engage in such activities. For investors looking to conduct import/export operations and domestic goods distribution, the most common approach is to establish a trading company. This option has no minimum capital requirement, making it a cost-effective setup.
However, if an importer wishes to sell imported products to Vietnamese consumers, an additional trading licence is required. Setting up a trading company typically takes around three months, while obtaining a trading licence may require an additional one to three months. In practice, UK companies looking to import goods into Vietnam without establishing a local entity can partner with international freight forwarders, leveraging their agent networks to facilitate the process. This approach helps test the market quickly while minimising upfront investment.
Vietnam – Prohibited Items
Under Circular No. 34/2013/TT-BCT, certain goods are prohibited from being exported or imported by foreign-invested enterprises. Prohibited exports include petroleum. Goods banned from import into Vietnam include cigars, tobacco, petroleum, newspapers, magazines, and aircraft.
Per Decree No. 187/2013/ND-CP (Appendix II), the following goods require specific import/export permits from the government:
- Goods restricted for export under international treaties to which Vietnam is a party.
- Goods subject to export quotas set by foreign countries.
- Goods restricted for import under international treaties to which Vietnam is a party.
- Chemicals, explosive precursors, and industrial explosives.
All imports and exports must comply with relevant quarantine, food safety, and quality standards, with inspections by government agencies completed before customs clearance. Importers must also submit customs documentation, including the customs declaration form as outlined in Appendix II of Circular No. 38/2015/TT-BTC. Customs declarations are submitted electronically via the customs website.
Choosing the Right Freight Forwarder
International supply chain logistics are critical for any company looking to sell goods overseas. However, the process is complex and errors can disrupt the entire supply chain. To achieve efficiency, businesses often partner with international freight forwarders to ensure goods arrive safely and on time. In today’s rapidly changing global trade environment, a forwarder’s ability to adapt to shifting trade patterns is crucial.
Beyond devising optimal transport solutions, a reliable freight forwarder can manage various aspects of cross-border logistics to achieve door-to-door supply chain efficiency. These include:
- First-mile transport: Moving goods from the merchant’s warehouse to an airport or port.
- Export customs clearance.
- International freight transport.
- Import customs clearance.
- Last-mile delivery.
We’ve outlined six key considerations for selecting a freight forwarder for businesses to reference.
Vietnam-Specific Transport Options
Goods shipped from the UK to Vietnam typically use the following methods:
Air Freight
For many e-commerce businesses, air freight is the preferred method due to its speed and reliability. International cargo usually enters Vietnam via Ho Chi Minh City’s Tan Son Nhat International Airport (SGN) or Hanoi’s Noi Bai International Airport (HAN).
Sea Freight
Sea freight is cheaper than air freight but slower. Businesses should consider delivery deadlines and transport modes before choosing this option. We’ve compiled a guide on Vietnam’s sea freight – covering four major international ports – for businesses to reference.
In summary, both air and sea freight are vital for international cargo transport, each with its own advantages and drawbacks. Determining the most suitable transport solution is a decision every trading company must make independently. For quick insights, businesses can refer to our article – Sea Freight vs Air Freight: Pros and Cons at a Glance.
Vietnam – Customs Procedures
All goods imported or exported in Vietnam must comply with the country’s customs clearance standards to ensure quality, specifications, quantity, and volume meet requirements. Some goods face stricter clearance processes. For example, imported pharmaceuticals must undergo testing and include documentation detailing usage, dosage, and expiry dates (written in Vietnamese), which must also appear on or within the product packaging.
Customs Clearance Documents Required in Vietnam
Companies importing or exporting goods must submit a documentation file to customs to clear their shipments. At a minimum, this includes the company’s business registration certificate and import/export business code registration certificate. Depending on the specific import or export scenario, authorities may request additional documents, such as:
Documents required for imported goods:
- Bill of Lading.
- Import Goods Declaration Form.
- Import Permit (for restricted goods).
- Certificate of Origin.
- Cargo Release Order.
- Commercial Invoice.
- Customs Import Declaration Form.
- Inspection Report.
- Packing List.
- Delivery Order (for goods imported via seaports).
- Technical/Health Certificate.
- Terminal Handling Receipt.
Documents required for exported goods:
- Electronic Export Declaration Form (E-Form HQ/2015/XK).
- Bill of Lading.
- Contract.
- Certificate of Origin.
- Commercial Invoice.
- Customs Export Declaration Form.
- Export Permit.
- Packing List.
- Technical/Health Certificate.
Export shipments can typically be cleared on the same day, while import shipments for full container loads (FCL) and less-than-container loads (LCL) usually take one to three days. Under Vietnamese customs regulations, companies regularly importing or exporting the same goods within a specified period, under the same sales contract, and delivered within the contract’s stipulated timeframe, may use a single customs declaration for related procedures.
Vietnam – Import and Export Duties
Import Duties
Vietnam levies taxes on nearly all types of imported products, including import duties, value-added tax (VAT), and special consumption tax (SCT) for certain goods. Import duty rates depend on the type of goods and their origin. For instance, consumer goods and luxury items face high rates, while machinery, equipment, and raw materials often have lower rates or are exempt.
Import duty rates for products are classified into preferential, special preferential, and standard rates based on origin:
- Preferential Rates: Apply to goods from countries, groups, or regions with most-favoured-nation (MFN) status in trade with Vietnam.
- Special Preferential Rates: Apply to goods from countries, groups, or regions offering Vietnam special preferential import tax rates, primarily ASEAN nations under the Common Effective Preferential Tariff (CEPT), such as Singapore, Brunei, Indonesia, Malaysia, the Philippines, and Thailand.
- Standard Rates: Apply to goods from countries, groups, or regions not eligible for Vietnam’s MFN import tax rates. Standard rates are up to 70% higher than preferential rates set by the government.
Export Duties
Most goods and services exported from Vietnam are exempt from duties. Export duties (ranging from 0% to 45%, calculated on Free on Board (FOB) value) apply only to select goods, primarily natural resources like minerals, forest products, and scrap metal.
However, many goods are subject to VAT. Additionally, under the Special Consumption Tax (SCT) Law, exporters purchasing SCT-taxable goods for export but selling them domestically must pay SCT. An export tax declaration must be submitted when registering the customs declaration, though payment can be made within 30 days of registration.
Duty-Exempt Goods
In certain cases, imported and exported goods may be exempt from duties, including:
- Goods temporarily imported for re-export or temporarily exported for re-import.
- Goods imported for processing for foreign partners under processing contracts and then exported, or goods exported abroad for processing for Vietnam and then re-imported.
- Goods imported to create fixed assets for projects eligible for investment incentives or funded by Official Development Assistance (ODA).
- Goods imported for petroleum activities.
- Goods imported directly for scientific research and technological development.
Optimising Your Customs Experience
Vietnam’s customs procedures are complex and subject to change with little notice. Beyond checking the official Vietnam Customs website, UK companies exporting to Vietnam can partner with professional international freight forwarders, such as SL Global Logistics.
For SL Global Logistics, international logistics is more than a service – it’s a partnership to connect businesses with the world. As a UK-based expert in Southeast Asian freight forwarding, we offer global logistics solutions. Our one-stop door-to-door services include sea freight, air freight, trucking, warehousing, customs clearance, and cargo insurance. Our mission is to deliver customer satisfaction. In the intricate world of freight forwarding, SL Global Logistics is your trusted guide, carrying the load so you don’t have to. Join us in exploring streamlined international logistics solutions!