How to start an Export-Import business in or with Vietnam?

Vietnam is emerging as a manufacturing leader in past few years as compared to other developing country. The abundance of cheap, young and skilled labour and feasible business environment are the main driving factors.

The country is touted as the low-cost manufacturer with competitive labour costs. Vietnam’s labour costs are half as much as China’s labour costs. The supportive government policies make it a good choice for many businesses all across the globe shifting their base to Vietnam.

Many global countries are starting their business in Vietnam because of its low labour cost, young and potential labour force. The country’s average wage cost is more competitive than many neighbouring countries like China.

Over the past few decades the Vietnamese economy has experienced a boom and starting a business in Vietnam is new and less tough than other countries. Also, the investors are not facing harsh competition while trying to incorporate innovative or risky ideas with their business.

The country has competitive business environment with extensive open trade structure. Because of its affordable labour costs and socio economic development plans, the nation enjoys a key position in the industrial production and IT sectors.

As per the Global Import Export Data of Vietnam, the country was the major beneficiary of enhanced trade ties. Vietnam is a biggest trade partner with United States and it has held a USD 81 billion trade surplus with the country.

US goods exports to Vietnam in 2020 were USD 10 billion, slightly decreased from USD 10.9 in 2019 and an increase of 270% as compared to 2010. As per Vietnam Import Data, goods worth USD 331.58 billion were imported to Vietnam in 2021.

The top imports of Vietnam are electronic products, machinery, equipment, tools, computers, spare parts and components and instruments. The main import partners of the country are China, Japan, South Korea, United States, Taipei, Indonesia and India.

Similarly, as per Vietnam Export Data, the exports value of the country was nearly $3.5 billion, making the country the ninth largest export destination for the United States. The main exports of Vietnam are telephones, mobile phones, rice, crude oil, electronic products, textiles and coffee. The main exporters of the country are the United States, China, South Korea, Hong Kong and Japan.

Vietnam is the burgeoning and the lucrative investment marketing for global investors. In Vietnam, foreign owned company has the right to import and export goods as per the laws and international treaties to which Vietnam is a member.

1. Freedom to export and import: As per the clause 2 Article 5 of foreign trade management law of 2017, the freedom to export and import shall be exercised as –

a. The right to export and import shall be exercised as per the regulations of the law and international treaties to which Vietnam is a member.

b. By making a trade declaration, a trader can buy goods in Vietnam and export to foreign countries to carry out and take the responsibilities for the procedure related to export.

c. The business may import goods from foreign countries to Vietnam and sell them to those who have the rights to distribute such goods in Vietnam by making an import declaration to abide by the import formalities.

2. Goods permitted for international trade: Vietnam allows the global companies to indulge in the foreign trade all the goods in the market as long as they meet the requirements of law and international treaties. All those goods included in the list of prohibited exports and imports are not allowed to be traded in Vietnam. Goods that fall in the national defence and security are not allowed to be exported. Other goods that are not permitted for international trade in Vietnam are goods that damage environment, affect social order and safety, good customs, habits, high risks of obtaining pests, threaten food security, and that infringe intellectual property rights. The prohibition of imports is imposed as per international treaties to countries to which Vietnam is a member.

3. Goods requiring export or import license: Foreign businesses in Vietnam should pay attention to goods requiring export or import license are to be exported or imported under given conditions as per Article 65 of Foreign Trade Management Law 2017. As the companies have to handle import and export procedures at custom office and also carry out the administrative process at state agencies. Import and export goods need license issued by the state agency to carry out the export and import activities. For foreign trade of goods as per Article 65 of Foreign Trade Management Law, the businesses shall have its goods inspected by competent authorities.

4. Set-up of import export company: The businesses that plan to set up import export company in Vietnam has to follow these steps

a. Apply for investment registration certificate

b. Apply for business registration certificate

c. Open company bank account and investment capital account

d. Complete initial tax and accounting procedures.

Vietnam is the top destinations for companies with global aspirations. It has one of the most attractive investment locations in Asia for foreign investors.

Report this Page