Since the late 1980s when Vietnam launched its first economic reforms, the economy has been growing rapidly and has now become one of the most dynamic economies in Asia. This article serves as an in-depth overview for Australian entrepreneurs who would like to join this growing economy and want to understand the process of exporting products from Australia to Vietnam.
Understanding the Vietnamese Economy
Vietnam has welcomed various international investments and trading partners. Not only has the country obtained membership in ASEAN, the WTO, and China-ASEAN Free Trade Agreement, but it has also negotiated a number of FTAs with several other countries. Some FTAs include Australia, China, Japan, India, Korea, and New Zealand.
Many markets are still unexploited in Vietnam, and the country is forecast to be one of the top 10 fastest growing economies in the world in the next few decades.
Export Regulations You Need to Know
Exporting products to Vietnam can help your business access new markets and increase your competitiveness by reducing local dependence on the local Australian market. To ensure your trading operations are successful, you will need to be informed and updated on government regulations in both Australia and Vietnam.
Export Control Act
Based on the Export Control Act of Australia, the export of agricultural goods to Vietnam is controlled and regulated by Australia’s Department of Agriculture and Water Resources. To comply with all importing regulations in Vietnam, 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 will need to fulfill set quality standards and parameters before they can be exported legally.
It means that if your business exports any of the commodities stated above, you will need to fill out the EX26 Export Registration Form. The registration form includes the following details:
- 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
Customs Requirements for Export from Australia
In Australia, the Department of Home Affairs must clear your products for export. Some goods may be banned from being exported from Australia. The list of prohibited items for export from Australia can be found on the official website of Australian Border Force (ABF).
Customs Requirements to Import to Vietnam
Just like Australia, Vietnam has its own regulations when it comes to the export and import of goods. In general, all goods imported into Vietnam must be cleared through the border. Depending on the category and value of the products, companies that export and import from Australia to Vietnam may have additional costs. These costs include customs duty, clearance fees, goods, and services tax (GST) as well as other taxes set out by the Vietnamese government. According to the Customs of Vietnam, all imports into Vietnam are controlled by 2015 Law on Customs, as well as other circulars and decrees that can be found on their official website.
An Australian trading company must submit a customs import declaration within 30 days, and this can be done through the electronic data processing system, known as VNACCS/VCIS (Vietnam Automated Cargo and Port Consolidated System/Vietnam Customs Information System). Other supporting documents that can be submitted via VNACCS/VCIS consist of inspection reports, a commercial invoice, a certificate of origin and value declarations of goods.
Based on Annex 1 of Decree No.187/2013/ND-CP, some items are not allowed to be imported into Vietnam. These prohibited items include military weapons, firecrackers, explosive materials, narcotics, second-hand consumer goods, and right-hand drive motor vehicles.
Export and Import Duties for Australian Exporters
The Harmonized Commodity (HS) System is used in Vietnam, and most imported or exported goods have duties. However, some exemptions apply. For examples, goods exported abroad from a non-tariff zone, goods in transit, or goods imported from Australia into non-tariff areas in Vietnam for use in non-tariff areas only.
Import Duties in Vietnam
The rates of import duties are based on the origin of goods stated in the certificate of origin. In general, there are three categories – preferential rates, special preferential rates, and ordinary rates. Thanks to the special trade arrangement with ASEAN member states, import duties for Australian exporters fall in the special preferential rate. All import duties must be paid in advance before the receipt of goods in Vietnam.
How to Export from Australia to Vietnam?
Under the Export Control Act of Australia, companies in Australia that want to export their goods need to have an entity that is formed and legally registered in Vietnam. In other words, you must set up a trading company in Vietnam to be able to trade.
Other than filling export and import forms, there are many different practices set out by the authority you must comply with. It is highly recommended to seek professional advice to ensure that your export from Australia to Vietnam meets the requirements in order to avoid delays and fines.
Set up a Trading Company in Vietnam
With all the required documentation by the authorities, setting up a trading company for Australian in Vietnam will take approximately three months. No minimum capital is required for setting up a trading company in Vietnam. Required documents for setting up a trading company in Vietnam include an investment license, business registration certificate, and import license.
Engage Undername Import Service in Vietnam
If setting up a trading company in Vietnam seems consuming or if you would like to start importing immediately, there is an alternative to do so, engage with a company such as Cekindo. When engaging such a company, Australian firms are not required to set up a trading company or obtain any import licenses in Vietnam. The best part is that companies are not liable for taxes as the consignees are the ones who bear the responsibility.
To export from Australia to Vietnam, you must make sure that you have complied with all exporting and importing requirements and regulations. Most importantly, you need to have a concrete plan in place with a deep understanding of market trends and associated risks.
Using a local company in Indonesia can help to establish your trading company, or engage an import service for successful trade between Australia and Vietnam. This type of company will take care of all the processes and paperwork with all parties involved – streamlining your operations. For further information on the Australia business environment, reach out to Biz Latin Hub today for personalized support.