Foreign investors should know import and export regulations and procedures of Vietnam when doing trade in Vietnam or setting up a trading company in Vietnam.
Vietnam joined the World Trade Organization (WTO) in 11 January 2007, so WTO membership has provided Vietnam an anchor to the global market and reinforced the domestic economic reform process. Moreover, Vietnam is a member of the Association of South East Asian Nations (ASEAN) and a signatory to the ASEAN Free Trade Agreement (FTA), which aims to reduce tariff and non-tariff barriers to trade between member states.
Vietnam has engaged into some bilateral and multilateral FTAs. As Vietnam continues to live up to its commitments to further reduce import tariffs, this will lead to deeper economic integration with the world, boost foreign investments.
Some reductions in import tariffs have already come into effect since January 2018 (such as 0% import tariff for car, motorbike, vehicle components under the ASEAN FTA) and there are further commitments to progressively reduce tariffs to 0% by 2022 for a range of other commodities. For instance, under the Vietnam – South Korea FTA, a range of commodities with import tax rates ranging from 10-20% will also see a gradual reduction to 0% by 2022.
Import duty rates are classified into 03 categories: Ordinary rates, preferential rates, and special preferential rates. Preferential rates are applicable to imported goods from countries that have most-favored-nation status with Vietnam; meanwhile, special preferential rates are applicable to imported goods from countries that have a special preferential trade agreement with Vietnam.
Vietnam has concluded three important agreements, including: (i) ASEAN-Hong Kong FTA; (ii) the European Union (EU) FTA; and (ii) the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP). In addition, Vietnam is under negotiation of other agreements, including the Regional Comprehensive Economic Partnership (RCEP) and the FTAs with the European Free Trade Association (EFTA).
Foreign investors are exempted from import duties on goods imported for their own use which cannot be procured locally, including: machinery, vehicles, components and spare parts for machinery and equipment, raw materials, inputs for manufacturing, and construction materials that cannot be produced domestically.
However, Vietnam also prohibits importation of equipment and technologies which are more than 10 years old and certain products, including weaponry, ammunition, explosive materials, military technical equipment, firecrackers, second-hand consumer goods, types of publications, and cultural products in the category prohibited from dissemination and circulation in Vietnam, right-hand-drive cars, materials and transport facilities, chemicals, plan protection agents prohibited from use in Vietnam, scrap and waste, refrigerating equipment using C.F.C., products, raw material containing asbestos of the group of amphibole, chemicals on the list of prohibited chemicals.