Can I buy directly from a Vietnamese Factory? 5 things to know.

Most of us are used to exporting from China. However, you may not (yet) be familiar with the requirements for importers and buyers looking to export products from Vietnam. That’s why we wrote this guide, hope it can help you!

Let’s look at the requirements I need to know before exporting and buying products manufactured in Vietnam. This guide will answer these following questions:

· Can I buy directly from a Factory based in Vietnam?
· Or do I need to work with a Trading company to export my products?
· Do factory need an export license in Vietnam?
· Which products manufactured in Vietnam cannot be exported?
· Is there any tax applicable on Export?
· What are the rough sea freight shipping cost to the US and EU?

The decree NO.69/2018/ND-CP (15.05.2018) regulates foreign trades with Vietnam, including exports. Full English version is available on the WTO website with PDF directly downloadable here.

Do factory need an export license to ship goods out of Vietnam?

Factories are allowed to export their goods as long as:
· They follow export requirements (cf question 2)
· Products manufactured are not banned for exports (cf question 3)

No. Factories do not need an export license.

This requirement is true for Chinese factories, they need this export license (sometimes also named “Export permit”), issued by China’s Ministry of Foreign Trade and Economic Cooperation, to send their products overseas.

This is not the case in Vietnam. There is not such thing as an export license required to export products. Making it easier for buyers and importers like yourself.

As mentioned in the chapter 1, article 3: “Freedom to Export and Import” of the decree: “A Vietnamese trader which is not a foreign-invested business entity may export, import and carry out other relevant activities without any dependence on its registered business lines except for the goods under the lists of prohibited exports and/or imports.”

What information will be required for the export?

Below is the list of documents required to export products out of Vietnam for sea freight. As you can see, it is fairly standard. The factory is in charge or preparing those documents prior to the export.

· Purchase and sales contract
· Commercial Invoice
· Custom declaration form to export goods
· Detailed packing list
· Bill of lading
· Export permit for goods requiring an export permit (cf question 3)

Which products are banned for exports by Vietnam?

Regular consumer goods are all allowed for exports.

The complete list of products that are banned for exports can be find in the Decree №69/2018/ND-CP Appendix I (page 47). Some of those products include weapons, explosives, national antiques but also sawn timber from domestic natural forests and some chemicals.

Some products also require some special export license or compliance with some specific legal regulations. You can find the complete list in the Appendix III, V, VI and VII of the decree previously quoted. For example, some specific chemicals, endangered wild animals, Medicines put under special control and more.

As you can see with the few examples we just quoted, those limits on export and requirement for a special export license only apply to sensitive goods (often for obvious reasons). Consumer goods that you can find on Vietnam Reach are predominantly not concerned by these export restrictions.

If you have any doubt, we advise you to ask your supplier about its credentials and export records, for example by sharing name of some customers.

This ease of export is also one of the advantages of Vietnam. One of the reasons (among many others) that can explain Vietnam new status as a major manufacturing in Asia.

What taxes are applicable on export?

0% tax rate for products exported overseas (with few exceptions as mentioned below).

Vietnam is an export-oriented economy, part of the WTO since 2007. The vast majority of products exported from Vietnam are exempt from any tax (0% rate). As such, consumer goods products that you can find on Vietnam Reach are exempt from export tax.

Taxes applied to exports are only applied to a few specific items such as some minerals and natural resources. Depending on the product these export taxes can reach up to 45 percent of the total value.

One of the noticeable exceptions to the rule is a possible 5% tax on steel billets exported from Vietnam. This measure is still a draft, aimed at stabilizing the domestic price of steel products. We will update the article if it is confirmed.

What is the rough cost of shipping from Vietnam?

These are rough prices based on what we experienced, what exporters are currently experiencing and some latest quotes from Maersk as of 2021.

From Ho Chi Minh City to the West coast of the US:

From Ho Chi Minh City to the East coast of the US:

From Ho Chi Minh City to the Western Europe:

As you can see, price of shipping is close to what you would pay from China.

Conclusion

What you need to remember from our article:

· Factories manufacturing in Vietnam do not need an export license (unlike China).
· Factory will handle documents required for export.
· No ban on the exports of consumer goods out of Vietnam.
· 0% export rate on the overwhelming majority of products.
· Shipping cost similar to China.

We hope this guide was useful for you! Those were the questions we are very often asked by buyers planning to export from Vietnam.

Start now by browsing Vietnam Reach, see our listing of factories, see their products and start contacting them!