Import and export rights of FDI enterprises are important factors that help promote trade and investment in Vietnam. With clear legal regulations, FDI enterprises are permitted to import, export and distribute goods. This article will summarize the legal conditions, permitted goods and important notes when exercising these rights.
1. Overview of FDI Enterprises
a. Definition:
Currently, Vietnamese law has not provided a definition of FDI enterprises, but we can understand FDI enterprises through exploring related definitions.
FDI enterprises (Foreign Direct Investment) are understood as enterprises with foreign direct investment capital.
However, the Investment Law 2020 does not directly mention this type of enterprise but only provides a general definition as follows: “Economic organizations with foreign investment capital are economic organizations that have foreign investors as members or shareholders.”
Where “Economic organization is an organization established and operating under Vietnamese law, including enterprises, cooperatives, cooperative unions and other organizations conducting investment and business activities.”
And “Foreign investor is an individual with foreign nationality, organization established under foreign law conducting investment and business activities in Vietnam.”
(According to Article 3.22 Investment Law 2020)
b. Characteristics of FDI enterprises in Vietnam:
Each enterprise has its own characteristics. Accordingly, FDI enterprises have the following characteristics:
Investment forms:
- Enterprises established with 100% foreign investor capital
- Investment through capital contribution, share purchase, capital contribution purchase
- Business investment cooperation in the form of BCC contracts
(According to Article 21 Investment Law 2020)
Enterprise forms:
- Single-member limited liability company
- Multi-member limited liability company (2 or more members)
- Joint stock company
- Partnership company
Purpose of operation: Cooperate with Vietnamese economic organizations and expand multinational business markets.
>>>> Related article: What is an EPE processing enterprise?
2. Definition of Export Rights and Import Rights
Export Rights: The right to purchase goods in Vietnam for export, including the right to be named on export goods declarations to implement and be responsible for procedures related to export.
Import Rights: The right to import goods from foreign countries into Vietnam to sell to merchants who have the right to distribute such goods in Vietnam, including the right to be named on import goods declarations to implement and be responsible for procedures related to import.
(According to Article 3.2, Article 3.3 Decree 09/2018/ND-CP)
3. Types of Goods that FDI Enterprises Have the Right to Import and Export
According to Article 5.2.a of the Foreign Trade Management Law 2017, FDI enterprises have the right to freely conduct import and export business according to Vietnamese law and international treaties to which Vietnam is a member. Specifically:
Goods allowed for export: Not included in the list of prohibited exports or not permitted for export (Appendix I Circular No. 34/2013/TT-BCT)
APPENDIX NO. 01
LIST OF GOODS NOT PERMITTED FOR EXPORT (Issued with Circular No. 34/2013/TT-BCT dated December 24, 2013 of the Ministry of Industry and Trade)
| HS Code | Description of Goods |
|---|---|
| Petroleum oils and oils obtained from bituminous minerals, crude | |
| 2709.00.10 | – Crude petroleum oils |
| 2709.00.20 | – Condensate |
| 2709.00.90 | – Other |
Goods allowed for import: Not included in the list of prohibited imports or not permitted for import (Appendix II Circular No. 34/2013/TT-BCT)
APPENDIX NO. 02
LIST OF GOODS NOT PERMITTED FOR IMPORT (Issued with Circular No. 34/2013/TT-BCT dated December 24, 2013 of the Ministry of Industry and Trade)
| HS Code | Description of Goods |
|---|---|
| Cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes | |
| 2402.10.00 | – Cigars, cheroots and cigarillos, containing tobacco |
| 2402.20 | – Cigarettes containing tobacco: |
| 2402.20.10 | – Beedies |
| 2402.20.20 | – Cigarettes containing cloves |
| 2402.20.90 | – Other |
| 2402.90 | – Other: |
| 2402.90.10 | – Cigars, cheroots and cigarillos of tobacco substitutes |
| 2402.90.20 | – Cigarettes of tobacco substitutes |
| Other manufactured tobacco and manufactured tobacco substitutes; “homogenised” or “reconstituted” tobacco; tobacco extracts and essences | |
| 2403 | – Smoking tobacco, whether or not containing tobacco substitutes in any proportion |
| 2403.11.00 | – Water pipe tobacco specified in Subheading Note 1 to this Chapter |
| 2403.19 | – Other: |
| – – – Put up for retail sale: | |
| 2403.19.11 | – – – – Ang Hoon |
| 2403.19.19 | – – – – Other |
| 2403.19.20 | – – – Other manufactured tobacco for the manufacture of cigarettes |
| 2403.19.90 | – – – Other |
| Petroleum oils and oils obtained from bituminous minerals, other than crude; preparations not elsewhere specified or included, containing by weight 70% or more of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations; waste oils | |
| 2710.12 | – – Light oils and preparations: |
| – – – Motor spirit (gasoline): | |
| 2710.12.11 | – – – – RON 97 and higher, leaded |
| 2710.12.12 | – – – – RON 97 and higher, unleaded |
| 2710.12.13 | – – – – RON 90 and higher but less than RON 97, leaded |
| 2710.12.14 | – – – – RON 90 and higher but less than RON 97, unleaded |
| 2710.12.15 | – – – – Other, leaded |
| 2710.12.16 | – – – – Other, unleaded |
| 2710.12.20 | – – – Aviation spirit, other than that for use as fuel in aircraft jet engines |
| 2710.12.30 | – – – Tetrapropylene |
| 2710.12.40 | – – – White spirit |
| 2710.12.50 | – – – Solvents with low aromatic content below 1% by weight |
| 2710.12.60 | – – – Other light solvents |
| 2710.12.70 | – – – Naphtha, reformate and other preparations for blending motor spirit |
| 2710.12.80 | – – – Other alpha olefins |
| 2710.12.90 | – – – Other |
| 2710.19 | – – Other: |
| 2710.19.20 | – – – Crude oil with light fractions removed |
| 2710.19.30 | – – – Raw materials for carbon black production |
| – – – Lubricating oils and greases: | |
| 2710.19.41 | – – – – Refined mineral oils for lubricating oil production |
| 2710.19.42 | – – – – Aircraft lubricating oils |
| 2710.19.43 | – – – – Other lubricating oils |
| 2710.19.44 | – – – – Lubricating greases |
| 2710.19.50 | – – – Hydraulic brake fluids |
| 2710.19.60 | – – – Transformer oils and oils for circuit breakers |
| – – – Diesel fuel; fuel oils: | |
| 2710.19.71 | – – – – Automotive diesel fuel |
| 2710.19.72 | – – – – Other diesel fuel |
| 2710.19.79 | – – – – Fuel oils |
| 2710.19.81 | – – – Aircraft jet fuel with flash point of 23°C and above |
| 2710.19.82 | – – – Aircraft jet fuel with flash point below 23°C |
| Newspapers, journals and periodicals, whether or not illustrated or containing advertising material | |
| 4902.10.00 | – Appearing at least four times a week |
| 4902.90 | – Other: |
| 4902.90.10 | – – Journals and periodicals of an educational, technical, scientific, historical or cultural nature |
| 4902.90.90 | – – Other |
| Discs, tapes and other media for the recording of sound or of other phenomena, including matrices and masters for the production of discs, but excluding products of Chapter 37 | |
| 8523.21.90 | – – – Other |
| 8523.29.21 | – – – – – Video tapes |
| 8523.29.29 | – – – – – Other |
| 8523.29.41 | – – – – – Computer tapes |
| 8523.29.42 | – – – – – For cinematographic films |
| 8523.29.43 | – – – – – Other video tapes |
| 8523.29.49 | – – – – – Other |
| 8523.29.61 | – – – – – For reproducing representations of instructions, data, sound, and image, recorded in a binary form and capable of being manipulated or providing interactivity to a user, by means of an automatic data processing machine; storage media, formatted (recorded) |
| 8523.29.62 | – – – – – For cinematographic films |
| 8523.29.63 | – – – – – Other video tapes |
| 8523.29.69 | – – – – – Other |
| 8523.29.81 | – – – – – Suitable for use with computers |
| 8523.29.82 | – – – – – Other |
| 8523.29.83 | – – – – Other, for reproducing representations of instructions, data, sound, and image, recorded in a binary form and capable of being manipulated or providing interactivity to a user, by means of an automatic data processing machine; storage media, formatted (recorded) |
| 8523.29.84 | – – – – – Other, for cinematographic films |
| 8523.29.89 | – – – – – Other |
| 8523.29.93 | – – – – – – Suitable for use with computers |
| Other aircraft (for example, helicopters, aeroplanes); spacecraft (including satellites) and suborbital and spacecraft launch vehicles | |
| – Helicopters: | |
| 8802.11.00 | – – Of an unladen weight not exceeding 2,000 kg |
| 8802.12.00 | – – Of an unladen weight exceeding 2,000 kg |
| 8802.20 | – Other aircraft and other aircraft, of an unladen weight not exceeding 2,000 kg: |
| 8802.20.10 | – – Aeroplanes |
| 8802.20.90 | – – Other |
| 8802.30 | – Aeroplanes and other aircraft, of an unladen weight exceeding 2,000 kg but not exceeding 15,000 kg: |
| 8802.30.10 | – – Aeroplanes |
| Parts of goods of heading 88.01 or 88.02 | |
| 8803.10.00 | – Propellers and rotors and parts thereof |
| 8803.20.00 | – Under-carriages and parts thereof |
| 8803.30.00 | – Other parts of aeroplanes or helicopters |
| 8803.90 | – Other: |
| 8803.90.10 | – – Of telecommunications satellites |
| 8803.90.20 | – – Of balloons, gliders or kites |
| 8803.90.90 | – – Other |
(According to Article 2.1, Article 2.2 Circular No. 34/2013/TT-BCT)
4. Conditions for Goods that FDI Enterprises Import and Export
a. Export goods:
- Export goods must not be included in the list of prohibited export goods; list of temporarily suspended export goods; list of goods not permitted for export under international treaties to which Vietnam is a member.
- Economic organizations with foreign investment capital must have permits or meet sufficient conditions as prescribed for export goods included in the list of export goods subject to permits and conditions.
b. Import goods:
- Import goods must not be included in the list of prohibited import goods; list of temporarily suspended import goods; list of goods not permitted for import under international treaties to which Vietnam is a member.
- Economic organizations with foreign investment capital must have permits or meet sufficient conditions as prescribed for import goods included in the list of import goods subject to permits and conditions.
(According to Article 7 Decree 09/2018/ND-CP)
5. Conditions for FDI Enterprises to be Granted Business Licenses to Conduct Export and Import Activities in Vietnam
a. Subject conditions:
Foreign investors from countries/territories participating in international treaties to which Vietnam is a member with commitments to open markets for goods trading activities and activities directly related to goods trading:
- Meet market access conditions under international treaties to which Vietnam is a member
- Have financial plans to implement activities for which business license is requested
- Have no overdue tax debts in case of establishment in Vietnam for 1 year or more
b. In case the investor’s country has no treaty with Vietnam:
- Have financial plans to implement activities for which business license is requested
- Have no overdue tax debts in case of establishment in Vietnam for 1 year or more
- Comply with specialized legal regulations
- Align with the competitiveness level of domestic enterprises in the same field of operation
- Meet the capacity to create employment for domestic workers
- Meet the capacity and level of contribution to the state budget
Object conditions: Business goods and services must align with Vietnam’s market opening commitments and comply with Vietnamese law.
Scope of operation conditions: Must align with Vietnam’s market opening commitments and comply with Vietnamese law.
6. Important Notes When FDI Enterprises Exercise Import and Export Rights
Rights and Obligations:
- Rights: FDI enterprises are permitted to export and import goods according to Vietnamese law and international treaties that Vietnam participates in.
- Obligations: Ensure compliance with regulations on customs, taxes, quality assurance of goods, origin of goods, etc.
Customs procedures: Ensure proper implementation of processes and submission of necessary documents.
Goods regulations: Carefully check the list of prohibited or restricted import/export goods to avoid violations.
Import and export rights of FDI enterprises in Vietnam bring many business opportunities but also come with strict conditions and regulations. Understanding legal regulations, the list of permitted business goods and related procedures will help FDI enterprises operate effectively and contribute positively to Vietnam’s economic development.
References:
- Foreign Trade Management Law 2017 Link
- Investment Law 2020 Link
- Decree 09/2018/ND-CP Link
- Circular 34/2013/TT-BCT Link
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