Vietnam is emerging as a pivotal player amidst the tech boom, becoming a potential solution to many worldwide technology challenges. According to the Ministry of Industry and Trade, within the first eight months of 2022, Vietnam garnered approximately US$77 billion from the export of phones, computers, electronic products, and spare parts. This achievement underscores Vietnam's capacity to foster a thriving IT industry, generating around US$70 billion in export turnover. The key importers of Vietnamese tech products include the US, the EU, China, and South Korea, together accounting for an impressive turnover of approximately US$27 billion throughout the same period. Amidst this tech boom, Vietnam is emerging as a pivotal player, a potential solution to many worldwide technology challenges.
Vietnam’s rising role in the global tech industry
With geopolitical dynamics and strategies aimed at diversifying global supply chains, Vietnam is positioned favourably. The country has also set its sights on transitioning from low-cost to high-tech manufacturing, especially in recent years, actively attracting high-tech enterprises through various incentives. Continuing to substantially contribute to the global tech manufacturing landscape, it is fast becoming an essential hub in its own right and cultivating a promising high-tech manufacturing ecosystem. Several global tech giants have already expanded operations in Vietnam, with Samsung and Intel, along with Apple’s vendors Foxconn and Luxshare as a few striking examples.
Navigating international shipping regulations
As Vietnam ascends the ranks in the global tech supply chain, it becomes imperative for business owners to comprehend the intricacies of international shipping regulations. When it comes to shipping electronics, including goods with batteries, overseas, adherence to these regulations is not just a formality; it is vital to avoid legal complications and ensure a smooth and swift shipping process.
Therefore, understanding the electronic shipping instructions, particularly for shipping electronics internationally, is essential to unlock the opportunities presented by the technological upsurge. Here are some important guidelines and things to note:
1. Registration, legal entity, and licence permit requirements
There is no requirement for a separate export licence. Investors can establish a trading company, a cost-effective option with no minimum capital contribution.
2. Vietnam export duties
Vietnam is lauded for its policies that support export activities. For instance, companies shipping electronics, spare parts, or equipment should note that Vietnam adheres to the Harmonised System (HS). Exceptions exist for goods in transit, exports from non-tariff zones, transfers between non-tariff zones, and items intended for humanitarian or grant aid purposes.
Duties vary from zero to 45%, based on the Free-On-Board (FOB) price. Companies must declare these duties during customs declaration registration and must pay them within 30 days of registration. Vietnam applies various types of duties depending on trade conditions, and companies can refer to the Vietnam Customs website for more comprehensive information.
3. Customs documentation
Exporters of electrical equipment and other goods exporters must submit a dossier of documents to Vietnam’s customs authorities. The dossier must include the company’s business registration certificate and the export business code registration certificate. Listed below are some documents required for shipping electronics overseas.
- Electronic Export Customs Declaration (E-Form HQ/2015/XK)
- Customs invoice, a document used in international trade, where the exporting party declares the product's value for customs. It contains information like the description and quantity of the goods, their value, the recipient, and the shipping route.
- Air waybill, a document that serves as a receipt issued by an international airline for goods and as proof of the contract of carriage. It is non-negotiable and provides detailed information about the shipment and allows it to be tracked.
- Commercial contract
- Certificate of Origin (COO)
- Commercial shipping invoice
- Customs export declaration form
- Export permit
- Packing list
- Technical standard/health certificate
4. Restricted goods
When shipping electronics from Vietnam, it's crucial to understand and abide by the regulations regarding restricted or prohibited goods. This category includes goods whose exportation is either entirely forbidden or is allowed only under specific conditis.
For instance, weapons, ammunition, explosive materials, and military-technical equipment are restricted from export due to their potential misuse. These items pose serious security risks and are hence barred from export under Vietnamese law.
Similarly, another category of restricted goods pertains to information security. Certain coding machines and cryptographic software programs used for the protection of government secrets are also on the restricted list. The export of such items is closely regulated, owing to their potential to compromise national security if they fall into the wrong hands.
It's essential to note that the list of restricted goods is dynamic and subject to changes based on national and international regulations, treaties, or agreements. Exporters are advised to stay updated with the Ministry of Industry and Trade (MOIT) and other relevant bodies for the most accurate and current information. Failure to comply with these regulations can result in severe penalties, including fines, confiscation of goods, and even criminal charges.
5. Import taxes to consider
When shipping electronic goods, it's crucial to understand that each commodity group may come with its own regulations and restrictions, which can vary based on the import destinations. This means, apart from Vietnam's export taxes, shippers must also consider the import taxes of the destination countries.
For example, when shipping to the United States (US), most electronic goods may not be subject to specific import taxes. However, it's essential to consider the de minimis value. In the US, items valued above US$800 may be subject to duty. The US Harmonised Tariff Schedule provides information about individual taxes for different categories of goods being imported to the US. Note that these import taxes are paid directly to the customs of the destination country.
On the other hand, if you're shipping electronic goods to the European Union (EU), you must account for the value-added tax (VAT). The standard VAT for importing electronic goods into the EU is 20%. The VAT is calculated on the value of the goods at the point of importation, which includes the price of the goods plus any shipping and handling charges. VAT is paid to the customs authorities upon importation, and the authorities issue a VAT receipt, which can be used to claim a VAT refund if the goods are subsequently exported from the EU.
Simultaneously, when exporting from Vietnam, export taxes will vary depending on the category of goods, ranging from 0% to 45%. These taxes are paid directly to the Vietnamese government during customs procedures. Vietnamese customs agents inspect outgoing merchandise to ensure the supplier has paid all taxes and duties.
Being aware of these varying export and import tax regulations can help businesses make better shipping decisions, avoid unexpected costs, and comply with international trade regulations. Always remember to check the respective customs and border protection websites of the destination country to calculate potential taxes in advance.
Protecting your electronic goods
Beyond the paperwork for shipping electronics internationally, packing these electrical items and equipment is another essential logistical facet to consider while shipping electronics overseas. Given their delicate nature, packing these goods for international transit requires special care.
- Assess the nature of your electrical item shipment, whether lightweight electronic spares or heavier, more valuable goods.
- Select suitable external packaging—DHL Express offers a wide range of boxes and envelopes that can protect your goods, whatever their size.
- Internally, cushion your electronic items with protective materials like bubble wrap, foam blocks or chips. Ensure all edges and seams are securely taped.
- Remember to label accurately and indicate if your goods are fragile.
Remember, appropriate packaging lies at the heart of successful overseas electronics shipping.
