Vietnam launched its first economic reforms in the 1980s, and since that time its economy has been growing at unstoppable pace. Now, in 2019, Vietnam became of the most dynamic economies in Asia offering unlimited business opportunities, including import and export.
In this article, we focus on Australian entrepreneurs who intend to export their products from the country and import them to Vietnam. Here, we not only cover the import requirements but also discuss the compliance when exporting from Australia.
An In-Depth Look into the Vietnamese Economy
The Vietnamese economy is predicted to become one of the fastest growing global economies in the upcoming years, and the government is working hard to make it happen.
Australian investors would benefit several international memberships and trading partnerships that Vietnam negotiated. Apart from being a member of ASEAN, WTO, China-ASEAN Free Trade Agreement (FTA), Vietnam has signed a number of FTAs with other countries such as Australia, Japan, India, Korea, and New Zealand.
Know the Regulations when Exporting from Australia
To make sure that trading process between Australia and Vietnam is successful, you should be aware of regulations related to both Australia and Vietnam with duty taxes and clearance set by the Department of Home Affairs being one of the most critical points to consider.
Export Control Act of Australia
The Export Control Act of Australia mandates Australia’s Department of Agriculture and Water Resources as the primary body regulating the export of agricultural goods.
In Australia, all agricultural products such as egg products, dairy, fish products, vegetables, fruit, seeds, grains, live animals, hay, meat products, straw, organic produce, and plant products are required to comply with quality standards and parameters before they can be even exported from the country.
Saying that Australian exporters of the commodities stated above must fill in the EX26 Export Registration Form which includes the following information:
- Animal slaughtering in Australia
- Fish capturing in Australia
- Goods handling and loading onto vehicles and freight
- Goods treatment
- Goods processing, packing, and storage
- Livestock quarantine
Australians Customs Requirements for Export
Noticeably, not all goods are allowed for export from Australia. The Department of Home Affairs must clear your products, and those that belong to categories stated in the list of prohibited items (can be found on official website of Australian Border Force (ABF)) will be denied from international trading.
Understand Customs Requirements for Exporting to Vietnam
Similarly to Australia, trading in Vietnam is regulated, and all goods that are imported to the country must go through clearance at the border. Further requirements and all imports are stipulated by 2015 Law on Customs and by additional circulars as well as decrees.
Required Documents for Import
An Australian trading firm is required to submit a customs import declaration within 30 days from the date of the actual import. This document can be submitted via an electronic system known as VNACCS/VCIS (Vietnam Automated Cargo and Port Consolidated System/Vietnam Customs Information System).
This system also enables importers to submit further required documents such as inspection reports, a commercial invoice, a certificate of origin and value declarations of goods.
Annex 1 of Decree No.187/2013/ND-CP stipulates items that are forbidden to be imported to Vietnam such as military weapons, firecrackers, explosive materials, narcotics, second-hand consumer goods, and right-hand drive motor vehicles.
Export and Import Duties for Australian Exporters
In Vietnam, Harmonized Commodity System (HS) is used commonly, and imported and exported goods are subjects to duties. However, some exemptions apply. Those are goods that are
- exported from a non-tariff zone
- in transit
- imported from Australia into one of the non-tariff areas in Vietnam for being used in this area only
Import Duties in Vietnam
Depending on the category of products and their value, certain costs might appear and increase the overall price of the goods. These are often related to clearance, goods and service tax (GST) and other charges.
In general, Vietnamese import duties categorise goods into three main groups as follows:
- preferential rates
- special preferential rates
- ordinary rates
These rates are based on the origin of products that is stated in the Certificate of Origin.
Thanks to the trade agreement with Australia, import duties for Australians belong to the special preferential rate category. However, all the duties must be paid before goods are sent to Vietnam.
Related article An In-Depth Look into Import and Export Regulations in Vietnam
Do You Need a Company for Trading from Australia to Vietnam?
Based on the Export Control Act of Australia, Australian companies that intend to export their products to Vietnam are obliged to set up and legally register a legal entity in Vietnam.
This legal entity must be incorporated as a trading company for export and import activities.
Set up a Trading Company in Vietnam for Import and Export Activities
A process of the establishment of a trading company in Vietnam takes approximately three months from submitting required documents. The application dossier includes an investment license, business registration certificate, and import license.
Interestingly, there is no required minimum capital.
Undername Import Service in Vietnam
The undername import services is a perfect alternative for all foreigners considering importing products to Vietnam. On the contrary to the cumbersome and time-consuming process of setting up a trading company, this enables entrepreneurs to start importing immediately.
Engaging an undername import provider such as Cekindo means no need to set up a company in Vietnam or even obtaining an import license. Moreover, you as an importer are not liable for taxes as the consignees are the ones who are responsible.
Cekindo will assist you during the whole process of importing goods to Vietnam, registering a company or providing undername import services. We will take care of all the process and paperwork, and communicate with all parties involved. Contact us now to get a free quotation on your business plan in Vietnam.