About CAEXPO
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I. Overview of Vietnam
 
In 2019, Vietnam’s economy continued to show fundamental strength and resilience, supported by robust domestic demand and export-oriented manufacturing. Preliminary data indicate that real GDP grew by about 7 percent in 2019, close to the rate reported in 2018, and one of the fastest growth rates in the region.
 
Though Vietnam has been hit hard by the COVID-19 pandemic, the health impact of the outbreak has not been as severe in Vietnam as in other countries due to proactive measures at the national and subnational levels. The economic growth is expected to slow down to 3-4 percent in 2020 compared 6.5 percent pre-crisis projections.
 
Vietnam enjoys an open business environment. 
 
Significant improved legal environment: Prior to joining WTO, Vietnam revamped much of its legal system, making revisions of major legal frameworks, in order to make the investment environment more transparent.
 
Active global integration: At present, Viet Nam has signed 55 bilateral investment agreements and 58 double taxation agreements with countries and territories. It has economic and trading relations with about 165 countries and territories. Vietnam holds membership in 63 international organizations and over 650 non-governmental organizations.
 
The policy of “multi-lateralization and diversification” in international relations has helped Vietnam to integrate more deeply into the global and regional economies and increase trade and investment ties with nations all over the world. More importantly, Vietnam has improved the enable business friendly environment over time.
 
 
II. Natural Resource
 
Since it began offshore oil exploration in the 1970s, Vietnam has become a net exporter of crude oil, while gas and petroleum reserves, coal reserves, and the harnessing of hydropower electricity provide other readily available sources of power. Minerals located in Vietnam include iron ore, tin, copper, lead, zinc, nickel, manganese, marble, titanium, tungsten, bauxite, graphite, mica, silica sand, and limestone. In addition, Vietnam has played a significant role in the exportation of agricultural products to the world markets as the world’s largest exporter of pepper, second largest exporter of coffee and rice, and third largest exporter of cashews, among other products.
 
 
III. Rules and Regulations on Trade
 
1. Products to be exported–imported under special regulations
 
According to Decree No. 12/2006/ND-CP, dated 23/1/2006, by the Government, the list of products to be exported-imported, under special regulations, include:
 
Export of commodity rice and paddy rice;
Import of oil, gasoline, and other energies;
Import of used cars: Used cars of all kinds to be imported must have been used for no more than 5 years, with this time period starting from the car's production date and then including thru the import date;
Re-export of major import materials that the State guarantees foreign currencies for import;
Import of cigarettes and cigars;
Export-import of products for military and national defense;
Import of timber from countries sharing borders with Vietnam.
 
2. List of commodities banned from export and import
 
Commodities Banned from Export
  DESCRIPTION
1 Arms, ammunition, explosives (except for industrial explosives), military equipment.
(The Ministry of National Defense announces list of commodities and states the HS code as shown in import commodities tariff nomenclature.)
2 Relics, ancient objects, national pre-antiques belonging to people and mass organizations.
(The Ministry of Culture, Sports and Tourism details the implementation, announces list of commodities and states the HS code as shown in export-import commodities tariff nomenclature.)
3 Documents banned from circulation and dissemination in Vietnam
(The Ministry of Culture, Sports and Tourism details the implementation, announces list of commodities and states the HS code as shown in export-import commodities tariff nomenclature.)
4 Round wood, sawn timber from domestic natural forest wood
(The Ministry of Agriculture and Rural Development details the implementation, announces list of commodities and states the HS code as shown in export-import commodities tariff nomenclature.)
5 Wild animals, rare animals and rare plants in the Group IA and IB regulated in Decision 48/2002/ND-CP dated April 22, 2002 of the Government. Wild animals, rare animals, rare plants as regulated in the "red book" under Vietnam's commitments with international organizations.
(The Ministry of Agriculture and Rural Development announces list and states the HS code as shown in export-import commodities tariff nomenclature.)
6 Rare aquatic products.
(The Ministry of Agriculture and Rural Development announces list and states the HS code as shown in export-import commodities tariff nomenclature.)
7 Special encoding machines and encoding software used in the State secret protection
(The Ministry of Industry and Trade and Government Commission for Code details the implementation.)
8 Toxic chemicals (Type I) as regulated in the Chemical Weapon Convention (The Ministry of Industry and Trade announces list and states the HS code as shown in export-import commodities tariff nomenclature.)
 

Commodities Banned from Import
1 Arms, ammunition, explosives (except for industrial explosives), technical military equipment.
(The Ministry of National Defense announces list and states the HS code as shown in export-import commodities tariff nomenclature.)
2 Firecrackers of all kinds, except for signal flares for maritime security detailed by The Ministry of Transportation)
(The Ministry of Security details the implementation, announces list and states the HS code as shown in export-import commodities tariff nomenclature.)
3 Second-hand consumer commodities include the following categories:
- Textile and garment, footware
- Electronics
- Cooling appliances
- Home appliances
- Healthcare equipment
- Interior decoration
- Home appliances made from pottery, glass, metal, plastic, rubber and other materials.
(The Ministry of Industry and Trade details above commodities and states the HS code as shown in export-import commodities tariff nomenclature.)
- Second-hand information technology products
(The Ministry of Information and Communication details commodities and states the HS code as shown in export-import commodities tariff nomenclature.)
4 Kinds of documents banned from circulation and dissemination in Vietnam.
(The Ministry of Culture, Sports and Tourism details the implementation, announces list of commodities and states the HS code as shown in export-import commodities tariff nomenclature.)
5 Right-hand drive vehicles (including in forms of (including converted drive vehicles or disassembled vehicles), except for special purpose vehicles with right-hand drive operating in a small area including such as: crane lorries, breakdown lorries, road sweeper lorries, spraying lorries, rubbish lorries, passenger buses at airports, pick-up trucks, concrete-mixer lorries,  and vans working in parks and golf courses.
6 Second-hand vehicles include:
-  Engine, frame, inner tube, tire, accessories, and suspension of cars, tractors and two wheel and three wheel vehicles
(The Ministry of Transportation announces list and states the HS code as shown in export-import commodities tariff nomenclature.)
-  Under-carriage frames of motorized cars and tractors (including new under-frames with second-hand motion and/or second-hand underframe with new motion);
(The Ministry of Transportation announces list and states the HS code as shown in export-import commodities tariff nomenclature.)
-  Bicycles;
(The Ministry of Industry and Trade announces list and states the HS code as shown in export-import commodities tariff nomenclature.)
-  Motorized two wheel and three wheel vehicles
(The Ministry of Industry and Trade announces list and states the HS code as shown in export-import commodities tariff nomenclature.)
-  Ambulances;
(The Ministry of Industry and Trade announces list and states the HS code as shown in export-import commodities tariff nomenclature.)
-  All types of cars with structures and functions altered from the original design.
7 Residues, waste, cooling equipment using C.F.C
The Ministry of Resource and Environment announces list and states the HS code as shown in export-import commodities tariff nomenclature.)
8 Products, materials containing asbestos of amphibian group.
(The Ministry of Construction announces list and states the HS code as shown in export-import commodities tariff nomenclature.)
9 Poisons in Table I regulated thru the Convention on Nuclear Weapons
(The Ministry of Industry and Trade announces list and states the HS code as shown in export-import commodities tariff nomenclature.)
 
 
 
IV. Import-export tax
 
1. Export tax
 
Exports are promoted in Vietnam. Therefore taxes are only levied on certain commodities, mainly natural resources such as minerals and forest products. Export taxes range from 0 to 45%.
 
2. Import tax
 
Almost every import product is subject to tax. Consumer products and luxury goods are highly taxed while machinery, equipment, raw materials, and capital goods for industrial production locally unavailable benefit from low taxes or even tax exemption.
 
Tax rates applicable to import goods include 3 categories:

Preferential tax rates are applicable to import goods originating from countries, groups of countries or territories, which apply the most favored nation treatment in their trade relations with Vietnam;
 
Special preferential tax rates are applicable to import goods originating from countries, groups of countries or territories, which apply special preferences on import tax to Vietnam. Currently it is mainly applicable to ASEAN nations under common preferential tariffs (CEPT).
+ASEAN Free Trade Area (AFTA) with Common Effective Preferential Trading Tariff - CEPT: Vietnam committed to cancelling import duties applicable to goods in the non-exclusive list in 2015; gradually move goods from temporarily exclusive, sensitive and highly sensitive lists to the non-exclusive one (on 1/1/2013). AFTA does not apply tax reduction and exemption policies to goods on the common exclusive list.
+ASEAN-China Free Trade Area with the ASEAN-China Free Trade Agreement: Import duties applicable to goods from China to Vietnam and vice versa will gradually reduce. Import duties applicable to normal goods will be almost cancelled in 2015. Import duties applicable to sensitive goods will reduce to 0-5% in 2020. Import duties applicable to highly sensitive goods will not exceed 18% in 2018.
 
Normal tax rates are applicable to import goods originating from countries, groups of countries or territories, which do not apply the most favored nation treatment or special preferences on import tax to Vietnam. The ordinary tax rates shall not be 70% higher than the preferential tax rates of the same goods items specified by the Government.
 
3. Objects not liable to tax
 
Goods in the following cases shall not be liable for import tax or export tax:
 
Goods in transit or being transported across Vietnam's borders; goods transferred through borders as provided for by the Government;
Humanitarian aid, non-refundable aid;
Goods exported from non-tariff zones to foreign countries, 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; and
Goods being petroleum portions paid to the State in value as natural resource tax when exported.
 
4. Tax exemption
 
Import goods or export goods shall be exempt from import tax or export tax in the following cases:
 
Goods temporarily imported for re-export or temporarily exported for re-import for participation in exhibitions, trade fairs or goods' display; machinery, equipment and working devices temporarily imported for re-export or temporarily exported for re-import in service of work within a certain time period;
 
Goods being movable assets according to the Government's regulations;
 
Import and export goods of Vietnam-based foreign organizations or individuals entitled to diplomatic privileges or immunities within the norms prescribed by the Government in accordance with treaties to which the Socialist Republic of Vietnam is a contracting party;
 
Goods imported for processing for foreign partners then exported or goods exported to foreign countries for processing for Vietnam then re-imported under processing contracts;
 
Import and export goods within the duty-free luggage quotas of persons on entry or exit under the Government's regulations;
 
Goods imported to create fixed assets of projects entitled to investment incentives or investment projects funded with official development assistance (ODA) capital sources;
 
Goods imported in service of petroleum activities;
 
Goods imported for direct use in activities of scientific research and technological development, including machinery, equipment, spare parts, supplies and means of transport, which cannot be produced at home, technologies which cannot be created at home; scientific documents, books and newspapers;
 
Raw materials, supplies and accessories imported for production activities of investment projects on the list of domains where investment is particularly encouraged or the list of geographical areas meeting with exceptional socio-economic difficulties shall be exempt from import tax for five years after the commencement of production;
 
Goods produced, processed, recycled or assembled in non-tariff zones without the use of raw materials and accessories imported from foreign countries, when being imported into the domestic market; for cases of using raw materials and accessories imported from foreign countries, when goods are imported into the domestic market, only import tax on imported raw materials and supplies constituting these goods must be paid; and
 
Other specific cases decided by the Prime Minister.
 
 
V. Doing-business Notes
 
1. Make a deep research on Vietnam’s market and know customer’s need. Vietnamese customers need high-quality products and low-price products.
 
2. Carry out the strategy of success through quality and eliminate counterfeit and shoddy products.
 
3. Attach great importance to brand building and after-sales service. 
 
4. Select cooperative partners carefully and strengthen risk management. There is fewer risk to cooperate with state-owned company, which plays an important role in various industries and has guarantee in fund.
 
5. Adopt a stable method to pay. Businessman can pay by the letter of credit settlement and avoid the terms out of line with international practices in the terms of this credit. 
 
6. Caution is needed on the payment. Vietnamese companies get used to communicating via email, leading to commerce information stealing by Hackers and loss of payment. Paper contract instead of that of electronic version should be checked before payment. When importing goods by means of border trade, you should prevent the damage of changing the way of customs inspection by port administration of Vietnam. 
 
7. Strengthen the awareness of intellectual property protection and emphasize conservation of trademark and patent. 
 
 
Reference: 1. Chinese Ministry of Commerce Department of Outward Investment and Economic Cooperation
2. World Bank Group
3. Ministry of Planning and Investment Foreign Investment Agency
4. Vietnam Trade Promotion Agency – VIETRADE
2020-10-24 17:58:56