Recent trends in the trade picture in Southeast Asia show that Vietnam is becoming a significant competitor to the robust Chinese economy. On one front the number of orders for goods is shifting from China to Vietnam, and ocean freight forwarders are directing more shipments in and out of Vietnam because cheap labor and a skilled workforce support more manufacturing operations. Another economic benchmark is the number of industries relocating from the prestigious Chinese Pearl River manufacturing delta to Vietnam because of the increased costs and regulations.
Also, with the current trade war between China and the US beginning to slow the Chinese economy, the Vietnamese economy has been stimulated through trade agreements with CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) and the signing of the EU-Vietnam FTA (EU-Vietnam Free Trade Agreement) and the country is steadily becoming more open to international trade and foreign investment.
In regard to this economic growth in Vietnam, there is a good reason why ocean shipping companies now have this Southeast Asian country on their radar, and they are finding ways to enter and succeed in the Vietnamese market. However, like any country experiencing growing pains and increased activity Vietnam has its own requirements for doing business. International sea freight shipping is responding to these changes in a positive way and assisting in this upswing in productivity and trade.
Importing and Exporting
According to Vietnamese regulations, companies wishing to import, or export goods must meet specific requirements and adhere to certain rules. For instance, some things cannot be exported like petroleum products or oil. In addition, they do now allow imports for goods such as cigars, tobacco, newspapers, journals, aircraft, and also petroleum oils.
All the imports and exports with Vietnam require that all standards for quarantine, food standards and overall quality standards comply with the associated government agencies and these must all be inspected by the government before they clear customs.
In addition, the ocean freight forwarder must obtain import and export documents for certain goods as listed in a government decree that clearly defines these items and materials. In general, these include:
- Goods subject to import control in accordance with international treaties to which Vietnam is an operating partner.
- Goods subject to export control in accordance with international treaties to which Vietnam is an operating partner.
- Chemicals, explosive pre-substances, and industrial explosives; and
- Goods exported within quotas set by foreign countries.
Importers are also required to prepare and submit a customs dossier that is a clear description of the contents of the cargo and certification that the cargo meets the standards of the Vietnamese government. This information is readily available to ocean shipping companies that ship to this country. Asiana USA is up to date on all regulations and can guide you through the import and export process.
Duties Levied with Imports and Exports
Most of the goods that are imported or exported in Vietnam and cross over the borders or pass between the domestic market and the non-tariff zone are subject to import and export duties. There are some exceptions to this, and ocean freight forwarders need to be aware that goods in transit, goods exported abroad from a non-tariff zone, goods passing from one non-tariff zone to another, and goods imported from foreign countries into non-tariff areas for use in non-tariff zones are included in these exemptions.
Machinery, materials and supplies, and equipment enjoy lower duty rates due to the need for supporting production, but luxury consumer items may have a higher rate than average. Items not produced within the Vietnamese economy will usually receive better rates depending on the need for commercial use within the country.
The government of Vietnam issues governmental declarations for all goods that are imported or exported. These documents are required once the goods have been registered with the customs office. Import duties must be paid before the cargo can enter the country, and export dues must be paid within 30 days of shipment. The types of duties imposed by the Vietnamese government relates directly to the status of the current market and the demand for the goods on the international market. This calculation can be done on a daily basis, so ocean shipping companies must have updated and accurate information at all times.
Export taxes range from 0 to 45% of the value of the cargo, but only certain items are subject to this tax. In some instances, exporters who sell goods domestically instead of exporting them may also be subject to a tax. This tax information is updated regularly through circulars distributed by the Ministry of Finance to ensure that the shipping activity is keeping pace with the changing markets.
Many goods are exempt from these taxes and include the following:
- Goods temporarily imported for re-export and goods temporarily exported for re-import.
- Goods imported for service to petroleum industries.
- Goods imported for processing other goods that will be exported to foreign countries.
- Goods imported to create fixed assets for in-country investment.
Vietnam is a country whose economy is growing by leaps and bounds. They owe this growth in large part to investors who see the rise in the consumer market and the increase in manufacturing because many businesses are relocating to Vietnam to take advantage of cheaper labor and fewer regulations regarding industry and commerce.
While Vietnam has been highly regarded as a leader in the textile market, the additions of high technology like Samsung and Nokia, and other industries related to the automotive, communications, and medical devices has created a worldwide demand for its products.
Shipping in and out of Vietnam can be complicated unless you have a firm grasp of the strict and detailed regulations that control the import and export of goods. Asiana USA handles a great deal of international sea freight exported from Vietnam destined for world markets. If you have questions about shipping in or out of Vietnam, contact us at Asiana.com or call us at 855-500-1808 for more information.