Doing Business

Vietnam Market Entry Strategy: Export

Nora Setiawan

April 26, 2021

Doing Business

Vietnam Market Entry Strategy: Export

Nora Setiawan

April 26, 2021

Vietnam’s market is growing quickly and will see the biggest growth in the future. The foreign investors have been attracted to the market and have set up companies within Vietnam. Thus, it is important to gain a strong understanding of the country’s export regulations and procedures. Plus, the country has a lot of young population who are always hungry for foreign products, along with digitalization that has resulted in exporting opportunities for foreign companies. If you want to know more, you should read this article until its end, because it will provide you with in-depth information about exporting in Vietnam.

READ MORE: Viettonkin Consulting service to help you set up your exporting company

Vietnam Export

Export Licensing Procedures

Vietnam does not require a company to have an export license to set up a trading company which resell imported and exported goods there. However, a foreign investor has to register with the Department of Planning and Investment (DPI) to conduct export business.

In addition, foreign investors who wish to engage in export activities in Vietnam are required to obtain an Investment Certificate. The companies that wish to expand their current business operations to engage in export activities must follow the procedures for adjusting their Investment Certificates.

According to Circular 34/2013/TT-BCT, there are certain goods that foreign companies are not allowed to export from Vietnam. Goods banned for export include petroleum oil, and they cannot import cigars, tobacco, petroleum oils, newspapers and journals, and aircraft as well.

Certain goods require the company to obtain export permits from the government, as per Appendix II of Decree 187/2013/ND-CP. These are:

  • Goods subject to export control in accordance with international treaties to which Vietnam is a contracting party.
  • Goods exported within quotas set by foreign countries.
  • Chemicals, explosive pre-substances and industrial explosives.

Furthermore, all exports have to comply with the government regulations on quarantine, food safety, and quality standards. They also have to be inspected by the government agencies before clearing customs.

Duties Applied to Export

Most exported goods across the borders of Vietnam, or pass between the domestic market and a non-tariff zone, are subject to export duties. However, there is an exception, if it is goods in transit and goods exported abroad from a non-tariff zone, and goods passing from one non-tariff zone to another.

Moreover, most goods and services being exported are exempt from tax. Export duties which are ranging from 0% to 45% and computed on free-on-board (FOB) price are only charged on a few items. The goods are mainly natural resources, such as minerals, forest products, and scrap metal. There are items which are not produced domestically can enjoy lower rates of import duties, or even a 0% tax rate. These consumer goods are machinery, equipment, materials and supplies.

Nonetheless, export duties are needed upon registration of customs declarations with the customs offices. Export duties have to be paid within 30 days of registration of customs declarations.

Vietnam also appoints several different types of duties on the import and export of goods. If you wish to find more information on a range of goods, you can visit the website of Vietnam Customs.

Trade Fairs for Exporters

As we know, Vietnam is now one of the fastest-growing countries in the world, and selling the products in an Asian market can be challenging. Therefore, you must build up local networking and get familiar with the market. You can also analyze the market trends and have a deep understanding about the competition for your successful business.

There is a great way of expanding the connection and network by visiting these local trade fairs. Here are the lists:

1. Vietnam Foodexpo

It focuses on food products and is one of the biggest in Vietnam. The exhibition attracts more than 300 exhibitors from 19 countries worldwide, also covering more than 10.000 square meters.

It is held in the Saigon Exhibition & Convention Center (SECC), the biggest modern Exhibition & Convention Center in the South of Vietnam. This exhibition covers the product categories, such as, fruit and vegetables, seafood, drinks, tea and coffee, food ingredients, fine food, and food technology.

2. Vietnam international Trade Fair

It is one of the biggest fairs held in Ho Chi Minh City in December each year. There are 1.000 booths and an area covering 15.000 square meters. The event attracts the exhibitors from countries, such as, India, Taiwan, Korea, Hong Kong, Indonesia, Russia, The United States (US), China, Spain, Italy, and Germany.

Almost 1.000 companies from 20 countries displayed the common products at the event, including electrical appliances, cosmetics, processed food, drinks, kitchen appliances, beauty and health care.

Export Shipping To Vietnam

After visiting these fairs, you may ask yourself how you ship the products to Vietnam. Here are 2 options that you need to keep them in your mind:

1. Direct Shipping

It can be used if the country of manufacture is close to Vietnam, like China or Korea. You can also offer short shipping times and low logistics costs.

On the other hand, if you sell from Europe or the US, you should look into a more long-term solution.

According to Vietaircargo, air freight takes around 8-10 days from the US to Vietnam, including the time of transportation from the place of purchase to the place of receipt. Airfreight is generally expensive over long distances, for instance:

  • 1 lbs (0.45 kg): USD 14.99
  • 2 lbs (0.9 kg): USD 28.99
  • 3 lbs (1.35): USD 40.99

2. Order Fulfillment

The demand for short shipping times and swift returns, plenty of third-party logistics companies have appeared both locally in Vietnam and overseas.

One of the biggest e-Commerce, Lazada, encourages its sellers to use Fulfillment-By-Lazada (FBL), which is managed by Timeslogistics in Hong Kong.

There are advantages of using a fulfillment center in Vietnam, such as, costs are around one-third compared to China, but the costs in China are still 50% lower, compared to Hong Kong.

In addition, the delivery times from Vietnam into other Southeast Asia countries are generally shorter.

In conclusion, these are all about exporting products to Vietnam. You must pay attention to the regulations and procedures, thus you will not be facing the difficulties in the future. Additionally, you have to know the local market, be active at local trade fairs, and to calculate the shipping costs, so your business can get more benefits as the time passes by. 

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