A Guide to Import Procedures in Vietnam

Shipping to Vietnam
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Vietnam is rapidly emerging as a major global hub for manufacturing and investment, thanks to its participation in 17 free trade agreements and strategic partnerships with 32 key partners, including the United States, Russia, and China. Furthermore, Vietnam’s stable political environment and liberal policies attract substantial foreign direct investment. These factors have propelled Vietnam’s manufacturing economy in recent years, driving the demand for imported raw materials for production and consumption.

In addition, Vietnam’s strategic location facilitates efficient logistics, making it an attractive destination for global trade. As the demand for imported goods continues to rise and more foreign investors enter the market, understanding Vietnam’s import procedures and customs policies is becoming critical.

Vietnam trading business
Vietnam is becoming an import and trading hub of the world.
Registration, business entity, and license requirements

Under Vietnamese law, companies do not need separate licenses for each export and import activity. Foreign investors wanting to engage in export, import, and domestic distribution only need to establish a trading company. A trading company is a non-conditional business, has no minimum capital, and allows 100% foreign ownership. Once established, the trading company can immediately engage in wholesale activities, wholesale involves selling the company’s products to another company (B2B).

In cases where the importer wants to sell products directly to Vietnamese consumers, so-called retail activities (B2C), the company must obtain a Retail License to conduct retail activities in Vietnam. The process of establishing a trading company usually takes 4-6 weeks, while obtaining the Retail License can take from 1 to 3 months.

In reality, many companies wishing to import goods into Vietnam, but not wanting to set up a local business entity, can utilize Importer of Record (IOR) services. This alternative is suitable for businesses with tight delivery schedules, seeking to test the market feasibility, or those who only occasionally import goods. The IOR services handle all documentation, customs, taxes, and transportation requirements efficiently.

Vietnam Customs Clearance

All goods imported or exported in Viet Nam are subject to the Viet Nam customs clearance standards, which effectively check the quality, specifications, quantity, and volume of the goods. Among these, certain imported goods are subject to inspection.

For instance, food supplements such as Whey, BCAA, and multivitamin tablets must undergo product quality declarations before being imported into Vietnam. Additionally, each shipment must pass a food safety and hygiene inspection prior to entry. Importers are required to provide documentation proving the origin of the products, along with packaging labels declaring product composition, usage instructions, dosage, and expiration date (all in Vietnamese).

Customs documents required in Vietnam

Importing companies must provide documentation, including a business registration certificate (BRC) and an investment registration certificate (IRC) with the export/import business code for authorities. Depending on the imported product, customs authorities may require additional documents.

Some of the necessary documents for importing goods include:

  • 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 through seaports);
  • Technical standard/health certificate; and
  • Terminal handling receipts.

Import shipments typically take one to three days to complete for full container loads (FCL) and less-than-container loads (LCL). According to Vietnamese Customs, companies that frequently import identical goods can use a single customs declaration form if the goods are listed under the same purchase and sales contract and are delivered within the contract’s delivery time.

Priority customs treatment

Companies seeking to reduce customs compliance costs can apply for priority customs treatment. Qualified companies benefit from several advantages that significantly lower customs compliance expenses and expedite clearance times.

Benefits of Priority Customs Treatment

If your company is qualified for the priority customs treatment, you will be able to enjoy the following benefits pertaining to customs compliance and costs:

  • Goods are exempted from physical inspection
  • Goods are exempted from the supplementary documents examination
  • Able to submit incomplete customs declarations. Complete customs declarations are required to be done in 30 days
  • Priority access for tax procedures
Requirements for Priority Customs Treatment

To qualify for Priority Customs Treatment, a company must meet certain conditions:

  • Comply with customs and taxation laws from the date of priority application for a period of two years.
  • Adhere to accounting and auditing regulations and Vietnamese Accounting Standards (VAS).
  • Maintain systems and processes for managing, monitoring, and controlling import and export supply chains.
  • Meet specific export and import turnover requirements, an annual turnover of US$100 million for importing.
Taxes and import duties

Vietnam imposes taxes on most imported products. Importers are subject to various taxes, including Value Added Tax (VAT), import tax, and Special Consumption Tax (SCT) on certain goods.

Value Added Tax (VAT)

Value Added Tax (VAT) is an indirect tax applied to the added value of goods and services. When importing goods, businesses are also required to pay VAT. The standard VAT rate is generally 10%, though certain goods may be subject to different rates.

Common VAT rate for products in Vietnam Goods Subject to Tax
0% Exported goods, goods sold to overseas/non-tariff areas and consumed outside Vietnam/in the non-tariff areas, goods processed for export or in-country export (subject to conditions), goods sold to duty-free shops.
5% Clean water, teaching aids, books, unprocessed foodstuffs, medicine and medical equipment, husbandry feed, various agricultural products, rubber latex, sugar and its by-products, and social housing.
10% Goods not specified as not subject to VAT exemption, or subject to the 0% or 5% rate.

 

Import Tax

Import tax is levied on goods imported into Vietnam. The rate of import tax depends on the HS code (Harmonized System) of the goods, the origin of the goods, and the trade agreements that Vietnam has signed.

  • HS Code: Each type of goods has a unique HS code. The more detailed the HS code, the more accurately the tax rate can be determined.
  • Origin of Goods: The origin of the goods affects the tax rate. Goods imported from countries with tax incentives enjoy preferential tax rates.
  • Trade Agreements: Trade agreements that Vietnam has signed also influence the import tax rate.

Moreover, the import tax rates are divided into three categories based on the origin of goods: preferential rates, special preferential rates, and ordinary rates.

Preferential rates: apply to imported goods from countries that hold Most Favoured Nation (MFN) status, also known as normal trade relations, with Vietnam.

Special preferential rates: apply to imported goods from countries that have a special preferential trade agreement or a free trade agreement (FTA) with Vietnam.

The ordinary rate: The standard rate is applied when goods are imported from countries that do not offer preferential treatment. This rate is equal to 150% of the preferential rates.

Special Consumption Tax (SCT)

Special Consumption Tax (SCT) is imposed on specific imported goods such as alcohol, beer, cigarettes, and petroleum products. The purpose of this tax is to curb the consumption of luxury goods and items that are harmful to health and the environment.

SCT rates range from 7% to 150% depending on the type of goods imported into Vietnam. For instance, alcoholic beverages and beer are subject to a 65% tax rate, while cars with larger engine capacities face higher SCT rates, up to a maximum of 150% for vehicles with engine sizes over 6,000 cm3.

Besides the common taxes mentioned above, importers may also incur additional taxes depending on the product:

  • Environmental Protection Tax: Applied to products likely to cause environmental pollution, calculated based on the pollutant content in the product.
  • Anti-Dumping Tax: Imposed on imported goods sold at prices lower than the normal market price in the exporting country, causing harm to domestic production.
Streamline your import processes with Importer of Record (IOR) services

Customs procedures are a complex and constantly changing process in Vietnam that requires extensive knowledge of import regulations. Additionally, setting up a business entity in Vietnam for handling import and transportation processes significantly increases operational costs, requiring substantial investment of both time and money.

In this context, Importer of Record (IOR) services emerge as an ideal alternative. These services are especially suited for businesses constrained by time, looking to test the market feasibility, infrequently exporting to Vietnam, or simply not yet ready to invest in establishing a local business entity while still achieving effective importation of their products.

An Importer of Record (IOR) is a legal entity responsible for ensuring that imported goods comply with all customs regulations and import laws of the destination country. The IOR is recorded on all entry documents and is responsible for the shipment if it does not comply with the destination country’s import laws and regulations.

Typically, IOR service providers are specialized third-party entities selected by exporters or importers to handle the import process of goods. The IOR’s main responsibilities include handling all necessary documentation, ensuring legal compliance, paying duties and taxes, managing the customs clearance process, and delivering the products to the final destination.

Your Trusted Local IOR Partner

At VNBG, we have a branch called VNBG ACCESS that specializes in providing top-tier Importer of Records (IOR). We are proud to serve as the local partner for some of the world’s leading IOR companies. These global giants may lack a local team or establishment in Vietnam, but that’s where we come in. As their trusted local partner, we bridge the gap, providing the on-ground expertise and market knowledge necessary to navigate the complexities of the Vietnamese market.

Our deep understanding of local practices, combined with our experience working with major international firms, positions us uniquely to meet the needs of foreign companies seeking a reliable IOR partner in Vietnam.

VNBG ACCESS is not just an IOR service provider but a comprehensive outsourcing partner capable of handling your import needs with precision and efficiency. In addition to our IOR services, we offer a wide range of logistics and import-export support services such as sourcing, warehousing, and freight forwarding. We ensure that your business operations in Vietnam are as smooth and cost-effective as possible, leveraging our local expertise and international experience.

Interested in partnering with us for a seamless IOR service in Vietnam? Contact us and schedule a meeting with our expert today.

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Micheal Dinh

Marketing Manager

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