Planning to import to Vietnam but not sure where to start? These in-depth Vietnam import regulations explained can be your saving guideline.
Vietnam import duties and license overview
In 2022, Vietnam’s economy grew by 8.02%, the fastest annual rate in 25 years since 1997. Strong retail sales and exports propelled this growth, but a global slowdown is predicted to weigh on the economy.
Analysts attribute this growth to strong government initiatives to attract more foreign investment and modernize infrastructure. Vietnam can be an attractive destination for investors looking to outsource production and take advantage of favorable tariffs and labor costs.
Despite its remarkable growth, import to Vietnam is still highly regulated by the government. Note that Vietnam import duties are levied on most goods to protect domestic producers and limit the inflow of certain products. However, there are government strategies in place to attract foreign investment and facilitate imports.
It is essential to learn about regulations for imported goods, special tax incentives, duty-free import quotas, and exemptions from import duties on specific goods. By understanding the details of Vietnam’s import duty system, investors can ensure that their investments are protected and maximize profits.
To import to Vietnam, there are two crucial documents you need to obtain: an investment license and a business registration certificate from the Department of Planning and Investment (DPI). The process of getting these two documents can take up to 3 months.
As with the investment license, you can import and export products to and from Vietnam with it – no need for a separate import license. The same goes for wholesaling your goods to businesses, you don’t need any additional licenses besides the investment license. It is a total perk for businesses seeking a simple and easily-access market.
But be noted that if your target is to sell goods directly to end consumers in Vietnam, you will need to get a trading license. This license can take 6 to 12 weeks to obtain, and you can apply for it after the incorporation and once you have paid the capital contribution in full.
List your products and look for related information on Vietnam import regulations before applying for your investment license. If you wish to import additional products in the future, you will also have to change the current investment license.
Vietnam import licensing procedure
To be eligible for operating import businesses in Vietnam, foreign investors must register for an import license with the Department of Planning and Investment (DPI) of Vietnam.
Furthermore, investors need to obtain an Investment Certificate. For firms that have been doing business for a while, it is advisable to adjust their Investment Certificate if they want to engage in import activities.
- Investment Registration Certificate (IRC) – up to 3 weeks
- Business Registration Certificate (BRC) – approximately 1 week with the capital contribution paid in full within 90 days from receiving the BRC
- Trading license – up to 12 weeks, only needed if retail sales are involved
Want to delve more into each certificate and how to apply for it? Take a look at our article on Essential Business Registration Certificates in Vietnam for Foreigners for further reference.
And that’s pretty much it! However, there are certain goods that foreign-based firms are permitted to import into Vietnam according to Circular 34/2013/TT-BCT. But we will get to these later.
Import taxes in Vietnam
Understanding the tax system in Vietnam, especially Vietnam import duties are crucial to every new business player before joining this potential market. Let’s get to know some general information about them.
According to Import and Export Tax Law, the Object and Non-Object of Taxation can be defined as below:
Object of taxation. Except for merchandise that is not objected to import & export taxation, these goods below are the object of taxation:
- Cargo and goods are imported and exported through the Vietnam border
- Domestic goods are brought into non-tariff barriers and goods from non-tariff into the domestic market
Non-Object of taxation. Goods in these specific cases are not an object of taxation:
- Goods in transit or being transported across Vietnam’s border gates or borders
- Goods transferred through border gates as provided for by the Government
- Humanitarian aid, non-refundable aid
- Goods imported from foreign countries into non-tariff zones for use in non-tariff zones only, and goods transported from one non-tariff zone to another
- Goods being petroleum portions paid to the State in value as natural resource tax when exported
As the import policies stated, most merchandise transfers into Vietnam are subject to duty. Tax rates vary on the type of goods you want to import. Consumer goods, especially luxury products such as cars, alcohol, and cigarettes may face much higher import duties than industrial materials, equipment, and machinery that are utilized in manufacturing.
The calculation formula for Vietnam’s Import Tax Duty
Import Tax Duties = Import tax + VAT (if any) + SCT (if any) + EPT (if any)
VAT: Value-added tax
SCT: Special Consumption Tax
EPT: Environmental Protection Tax
Do note that each import tax duty is derived by applying a tax rate to the new value base including import value and all previous tax duties. The sequence for the above taxes comes as: import tax >> SCT >> EPT >> VAT.
You can look for the import tax rate of individual goods based on their HS code (Harmonized system codes). This code also reveals if import goods are liable for other tax duties like VAT, SCT, or EPT.
As stipulated in the Import-Export law, the import tax rate is categorized into three different schemes:
Preferential tax rates: apply to import goods from countries, groups of countries, or territories with which Vietnam has the most-favored-nation treatment in trade relations (aka MFN).
Special preferential tax rates: apply to import goods from countries, groups of countries, or territories having signed an agreement on special import tax preferences with Vietnam. As of April 2020, Vietnam has concluded 13 unilateral and multilateral Free Trade Agreements, namely Vietnam – EU (EVFTA), and ASEAN – AEC.
Ordinary tax rates: apply to all other remaining cases. Decision 45/2017/QD-TTG set out a common rate of 5% for all items belonging to this scheme. If imported goods do not lie in the list, the ordinary rate will equal 150% of the preferential tax rate of such items.
If you want to import USD 100,000 worth of lacquers into Vietnam, your import tax is:
[$100,000 x 15% (Import tax)] + 0 (no SCT nor EPT for lacquer) + [$100,000 + $100,000 x 15% (Import tax)] x 10% (VAT) = $26,500
Important notice: As claimed by the Vietnam import regulations, with each specific good, there are specific tax rates.
Import Tax exemption in Vietnam
According to Article 16 of Law No. 107/2016/QH13 on export and import duty, many other products are also on the tax exemption list:
- Materials, supplies, and components used for manufacturing
- Goods temporarily imported for re-exports
- Raw materials and components which cannot be domestically produced
- Machinery and equipment that are fixed assets of an entity that is eligible for incentives
- And so on.
The Circular No. 34/2013/TT-BCT of the Ministry of Industry and Trade lists merchandise that is prohibited from import into Vietnam:
- Petroleum oils and oils obtained from bituminous minerals
- Newspapers, journals, and periodicals
- Discs, tapes, and other recorded media
- Second-hand items (including electronics and automotive)
Getting to know the Vietnam import regulations and obtaining a requisite license for your business on your own is not entirely impossible. However, in some cases getting your hands on the license or competing with local distributors can be a big-ticket, time-consuming, and more problematic than local firms.
But the good news is the stricter the regulations, the more opportunities you have to exploit in a new market. Let BBCIncorp handle the exhausting process of registration on your behalf.
Get in touch with us via email@example.com or talk with our team through the chatbox for more helpful information!
Disclaimer: While BBCIncorp strives to make the information on this website as timely and accurate as possible, the information itself is for reference purposes only. You should not substitute the information provided in this article for competent legal advice. Feel free to contact BBCIncorp’s customer services for advice on your specific cases.
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