With a population of more than 99.22 (as of 2022), Vietnam is an enticing market for foreigner trading companies looking to expand their business or invest. The country is host to consumers that are particularly interested in international or imported items, like healthcare products, food and drinks, children’s toys, and other items.
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Moreover, the imports to Vietnam had risen to a record high of USD 28.3 billion in May 2021, compared with a value of USD 27.8 billion in the previous month according to CeicData. Thus, many businesses continue to rely heavily on imported goods from other countries.
Even though the import and trade market gives promising potential for investors, you must have a thorough grasp of Vietnamese import regulations, particularly the country’s import license, before diving in.
This article explains why you should import to Vietnam, how to import products to Vietnam, what commodities are allowed to be imported, and how to start your import company in the country.
Reasons To Import To Vietnam
Vietnam has firmly established itself as one of Asia’s most thriving and resilient economies, providing importers with a plethora of commercial opportunities. The country is populated with young, tech-savvy consumers and has the region’s fastest-growing middle-class population. Here are some of the most compelling reasons to import to Vietnam:
Trade Agreements with Other Countries
Vietnam has opened its doors to foreign direct investment and has transformed to compete with the global markets. It is a member of the World Trade Organization (WTO) and has established a number of international ties through free trade agreements with several nations.
Furthermore, Vietnam is a member of the Trans-Pacific Partnership (TPP), allowing the country to further modernize and move ahead with globalization. With the country’s willingness to restructure state-owned firms, allow workers freedom of association, and implement tighter environmental standards, Vietnam would undoubtedly benefit the most out of the 12 TPP member nations by opening its market to global companies.
In addition, due to free trade agreements, the majority of items imported into Vietnam will be duty-free. For instance, the recent EVFTA (EU-Vietnam Free Trade Agreement) permits EU nations to import products into Vietnam with no customs taxes.
Thriving Middle Class
As previously stated, Vietnam’s middle class is rapidly expanding and more than half of the country’s overall consumption is attributed to the growing middle class, as it ranks 9th on the Global Retail Development Index. In fact, in 2021, the country’s middle class reached 56 million people.
Consumer confidence here is among the strongest in Asia, with 90% of Ho Chi Minh City (HCMC) people belonging to the middle class. HCMC has stores selling branded and high-end items, showing that the city has the purchasing power to allow global brands to enter the market.
What To Import To Vietnam
Vietnam imported USD 233.3 billion value in goods from all over the world in 2017. Imports surged by 33.3% in just one year, from 2016 to 2017. With such a large number of imports, Vietnam accounted for 1.5% of total world imports, which totaled USD 16.1 trillion in 2017. As a result, with a population of nearly 96 million people, the country’s imports in 2017 were USD 233.3 billion, implying that each Vietnamese citizen spent USD 2,400 on imported goods per year. The onset of the pandemic had an impact on imports, however, by the end of 2020, the country’s imports amounted to USD 262.7 billion.
The following list of items displays the country’s most expensive imports in terms of dollar value, with the proportion in brackets indicating the percentage of total import value:
- Electrical equipment and machinery: USD 60.7 billion (26%)
- Machinery and high-tech devices including computers: USD 25.4 billion (10.9%)
- Mineral fuels including oil: USD 10.5 billion (4.5%)
- Iron and steel: USD 10.1 billion (4.3%)
- Medical and technical devices and apparatus: USD 9.2 billion (3.9%)
- Fishery products: USD 6.2 billion (2.6%)
- Vehicles and automobiles: USD 5.7 billion (2.4%)
- Cotton: USD 4.2 billion (1.8%)
According to statistics, fish and fisheries products have seen the greatest rise in imports in Vietnam, with a 465% increase from 2016 to 2017.
Prohibited Goods To Be Imported To Vietnam
Certain commodities, whether commercial or non-commercial, are forbidden from being imported into Vietnam by Decree No.187/2013/ND-CP. The following goods are prohibited:
- Ammunition, weapons, explosives, and military-technical equipment
- Publications in this category are not allowed to be circulated or distributed in Vietnam
- Skylights, various firecrackers, and other devices or equipment that may cause the road speed measuring instruments to malfunction
- Automobiles and gadgets are examples of second-hand items
- Tobacco and cigars are two types of tobacco
- Oils from petroleum
- Radio equipment, as well as equipment that emits radio waves, that does not conform with the Radio Frequency Law
- Postal stamps in the restricted exhibition, trade, propagation, and commercial categories as outlined by the Postal Law
- Vietnam prohibits the distribution and circulation of cultural works in certain categories
- Refrigerating equipment that uses C.F.C. (chlorofluorocarbon), as well as waste and scrap
- Appendix III of the Rotterdam Convention lists chemicals.
- In Vietnam, the use of plant protection chemicals is illegal.
- Asbestos-containing raw materials and products in the amphibole category
How To Import To Vietnam
Companies must register and form a legal company in Vietnam to import their products into the country. To commence any import activities, the concerned company must be registered as a trading corporation under the legislation.
Setting up a Trading Company in Vietnam
Setting up a trading firm in Vietnam takes around three months assuming you have obtained and filed all required paperwork, such as a business registration certificate, an investment license, and an import license. There is no minimum capital requirement for establishing a trading business in Vietnam, but the company must report all income and costs as required by law.
Engaging Importer of Record in Vietnam
Most companies do not need an import license. Many foreigners interested in importing to Vietnam prefer the importer of record service, also known as the under-name import service since it helps minimize taxes and eliminates the time-consuming process of forming a trading business and product registration. As a result, it enables firms to begin importing goods into Vietnam practically instantly. However, around 8% of products require an import license. For more details, you can leave your information below and get consultation from us.
How Can Cekindo Help
Cekindo will assist you during the whole process of importing goods to Vietnam, registering a company, product registration, or providing under-name import services. Talk to us now to discuss the most suitable solution for your import business.