How to Import Goods From Vietnam

How to Import Goods From Vietnam
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How to Import Goods From Vietnam?

Importing goods and services from Vietnam to the United States reached a total of $80.1 billion in 2020. Vietnam is the 10th largest goods trading partner of the US, making this bilateral relationship attractive all businesses that recognize opportunities within the Vietnamese market. Nonetheless, the intricacies of international shipping can present challenges. If these challenges are not handled with care and expertise, they can result in monetary setbacks and distract from essential business functions.

This is where the role of a digital freight forwarder becomes crucial. They play a vital role as a reliable partner that are looking to navigate the complex landscape of international shipping. 

In the following guide, we will examine the comprehensive process of importing goods from Vietnam to the United States and Canada. Whether you’re a beginner or novice in the field of importing or seeking to improve your current practices, this article offers essential insights to assist you in successfully navigating the import process.

Setting up and Understanding Your Import Strategy is the First Step

When exploring the process of importing goods from Vietnam to the United States, understanding the key stakeholders involved is vital to ensuring a seamless and successful operation:

  • Buyer/Importer: This is where you come in. An entrepreneur interested in importing goods from Vietnam for distribution in the US or Canada. 
  • Seller/Vietnamese Supplier: This refers to the Vietnamese manufacturer or vendor responsible for creating the goods you plan to import, ranging from textiles, clothing, and electronics to various other commodities.
  • Vietnamese Customs (for exporting): This official entity supervises and regulates the exportation of goods from Vietnam, ensuring alignment with all pertinent laws and guidelines.
  • US or Canadian Customs: These governmental agencies oversee the importation of goods into the United States or Canada, enforcing compliance with all relevant laws and standards.
  • Digital Freight Forwarder: That’s us. As your digital freight forwarder, we integrate all logistics services, including transportation, customs clearance, and documentation, into a unified package. By taking advantage of digital freight forwarders, you simplify your shipping procedures so you can concentrate on growing your business.

For small and medium-sized businesses, optimizing your shipping process can be simplified by efficiently managing the involved parties. Employing a freight forwarder as a reliable ally can facilitate this management, freeing you to concentrate on your core competencies—identifying prospects, expanding, and running your company.

Understanding the Import Market for Goods From Vietnam

Vietnam has become a significant player in the global marketplace, offering a diverse range of high-quality, competitively-priced products. 

Vietnam, historically rooted in agriculture, has transformed into a significant exporter in the global market. With its strategic location and competitive labor costs, Vietnam has cultivated diverse export relationships, especially with major economies like the United States, China, Japan, and South Korea. As of 2022, the country’s exports reached a remarkable value of $371.37 billion. Key export destinations predominantly include the United States, the EU, and China. Other significant partners include Japan, South Korea, and ASEAN (The Association of Southeast Asian Nations). These exports encompass a wide range of products, from electronics and machinery to textiles and agricultural products, reflecting Vietnam’s multifaceted economic landscape.

On an annual basis, Vietnam hosts the Vietnam International Trade Fair, which is known to be the biggest trade fair in Vietnam. This expo serves as a platform for both domestic and international businesses to showcase their products, services, and innovations. This expo is a testament to Vietnam’s commitment to global trade integration and the nation’s ever-growing role as a significant player in the ASEAN economic community.

The country’s industrial landscape has seen a remarkable transformation, making it an attractive hub for manufacturing and export. However, understanding the nuances of this market is crucial for businesses looking to import goods from Vietnam.

  • The Vietnamese industry has evolved from small-scale manufacturing to a rapidly growing sector, largely due to the Doi Moi economic reforms of the late 1980s.
  • The country’s rich natural resources and cost-effective labor have further accelerated its industrial ascent.
  • Despite advancements in sustainable practices and material certification, the industry faces challenges such as raw material shortages and the need for improved technological and design skills.
  • The manufacturing landscape in Vietnam is diverse, producing a wide array of products from various materials, with a particular emphasis on wooden goods.
  • The industry’s capacity for customization offers businesses the opportunity to request bespoke products tailored to specific designs, materials, and dimensions.
  • A comprehensive understanding of the Vietnamese market can guide businesses in making informed decisions about what products to import and the most effective methods for doing so.

Make Sure Your Supplier Comply with Vietnam’s Export Regulations and Compliance

When considering imports from Vietnam to the United States or Canada, it’s commonly the duty of your Vietnamese supplier to secure export licenses and manage export protocols.

As the importer or buyer, your primary task is to establish the appropriate incoterms, which define the responsibilities of each involved party.

Below is a concise summary of the compliance and rules that your Vietnamese associates need to observe.

Customs Declaration

When your Vietnamese associate exports products from Vietnam to the United States or Canada, they must submit a detailed customs declaration. This declaration should encompass the following points:

  • Consignor and Consignee: Details of the exporter (seller) in Vietnam and the importer (buyer) in the destination country.
  • Description of Goods: A clear and precise description of the items being shipped, including their material composition if relevant.
  • Value of Goods: The overall cost or value of imported goods, usually used to determine customs duties and taxes.
  • Country of Origin: This refers to Vietnam, where the products were manufactured or produced.
  • Tariff Classification: Harmonized System (HS) codes are used to categorize the goods for customs duty considerations.
  • Purpose of Shipment: Whether the items are for sale, as samples, or for personal use, among other reasons.
  • Shipping Details: Specifics about the transportation method, like the vessel or flight number and the port or airport of entry.

Though the precise details required might differ based on the type of the products and particular regulations of the receiving country, these are standard components typically present in a customs declaration when importing from Vietnam. It’s always wise to seek advice from a customs broker or specialist to ensure complete compliance.

Export License (Vietnamese Supplier)

Importing goods from Vietnam requires compliance with specific regulations and the acquisition of the necessary licenses and permits. Here’s a general list of licenses and permits required when sourcing goods from Vietnam:

  • Business License: Verifying that the local business you are dealing with has a valid license is a crucial step to evaluating its legitimacy.
  • Export License: In Vietnam, a separate export license isn’t required to export goods. However, if the goods are restricted or controlled, an export permit from the relevant governmental authorities will be necessary to export those items out of the country legally.
  • Trading Company: In Vietnam, forming a trading company is a standard procedure for engaging in export activities.

Once the needed licenses and permits are secured, a Vietnamese seller must be cognizant of the tax implications linked to exporting. Here’s what they might face:

  • Value Added Tax (VAT): In Vietnam, exported goods often enjoy a 0% VAT rate, allowing the exporter to reclaim any VAT paid on goods and services associated with the exported items.

Negotiating Contracts and Incoterms with the Vietnamese Seller

When importing goods from Vietnam to Canada or the United States, the negotiation of contracts and understanding of the terms of shipment with the Vietnamese supplier is a critical step. This phase is fundamental for the shipping process, as the right agreements can significantly impact the ease and cost of importing goods from Vietnam.

Among the essential elements of these contracts are Incoterms (International Commercial Terms), which are standard terms of commerce provided by the International Chamber of Commerce (ICC). These terms are commonly used in international trade to clarify the responsibilities, costs, and risks associated with the delivery of goods from sellers to buyers.

Here is a list of common Incoterms that businesses should familiarize themselves with when importing goods from Vietnam to the United States:

  • EXW (Ex Works)
  • FCA (Free Carrier)
  • CPT (Carriage Paid To)
  • CIP (Carriage and Insurance Paid To)
  • DAP (Delivered At Place)
  • DPU (Delivered At Place Unloaded)
  • DDP (Delivered Duty Paid)
  • FAS (Free Alongside Ship)
  • FOB (Free On Board): 
  • CFR (Cost and Freight)
  • CIF (Cost, Insurance, and Freight)

More Incoterm details can be found here

Here is a simple example to illustrate how incoterms impact your import operation. For instance, in the case of the EX Works (EXW) Incoterm, the seller’s responsibility is limited to providing the goods at their own location. From that point on, the buyer takes on all transport-related responsibilities and expenses. On the other hand, with the Free on Board (FOB) Incoterm, the seller will be responsible for getting the goods onto the shipping vessel and handling export clearance. After the goods are loaded on board, the buyer is responsible for all subsequent risks and costs.

As shown in the example, it is vital to understand and select the appropriate Incoterms for an import process to be successful. It helps in defining clear roles and responsibilities, minimizing misunderstandings, and ensuring that both parties are aligned with the expectations and obligations related to the shipping and handling of the goods.

Choosing Your Shipping Options and Handling Logistics

Navigating the intricacies of importing goods from Vietnam necessitates a systematic assessment of transport choices combined with efficient logistics planning. When determining the most suitable shipping method, it’s crucial to weigh factors such as budget, the volume and weight of your merchandise, and your desired delivery timeframe.

While air freight offers a rapid solution for transporting goods from Vietnam, sea freight often emerges as the favored option for businesses dealing with large shipments or those not bound by tight delivery schedules.

In the realm of ocean freight, businesses typically face two choices: Full Container Load (FCL) and Less Than Container Load (LCL). Both have their strengths and weaknesses. FCL is ideal for extensive shipments, permitting businesses to dedicate an entire container to their goods. On the other hand, LCL consolidates your shipment with others, sharing a single container space.

Delivery intricacies, such as port-to-door, port-to-port, and door-to-door, should also be factored into your considerations. Engaging a freight forwarder to oversee this multifaceted task streamlines your logistics and negates the need to juggle multiple vendors.

Additionally, it’s imperative to ensure your shipment benefits from cargo insurance, offering protection against potential in-transit damages or losses.

Lastly, handling shipping documentation, such as the Bill of Lading, is indispensable for smooth shipping operations.

How Freight Forwarders Streamline Your Shipping Operations

Utilizing freight forwarders can greatly optimize your shipping processes, particularly when dealing with the complexities of international commerce related to Vietnam.

  • Researching: Freight forwarders offer a comprehensive suite of shipping solutions and additional services for Vietnam, including customs clearance, financing for SMBs, and secure payment methods. Their deep-rooted relationships with carriers and other service providers grant them a distinctive advantage, allowing for superior negotiation and optimization capabilities compared to SMBs handling operations independently.
  • Execution: Freight forwarders take charge of logistics, managing the complete shipping process to ensure the secure delivery of your goods from Vietnam.
  • Insurance and Advanced Tracking: These experts often provide cargo insurance to protect your commodities during their journey. Moreover, they deploy advanced tracking systems, enabling you to monitor your shipment’s progress and be promptly informed of any unexpected developments.

Import Regulations and Customs Duties When Importing Goods from Vietnam

For Both Countries:

  • Quotas and Limitations: Certain goods imported from Vietnam might face entry restrictions or quotas when arriving in the US and Canada. To determine the impacted items, refer to the US Customs and Border Protection website for US-specific guidelines and the Canada Border Services Agency website for rules applicable in Canada.
  • Tariff Categorization: Every item imported from Vietnam into the US and Canada needs to be accurately identified using the Harmonized System code. This categorization helps establish the relevant duty rate and any potential import limitations.
  • Product Labeling and Standards: Both countries require specific labeling for certain goods (e.g., textiles, electronics). Meeting these standards ensures product safety and consumer protection.

For the United States:

  • Customs Bond: Importers to the USA typically need a customs bond, a guarantee to US Customs and Border Protection that the importer will adhere to all laws and regulations.
  • Regulatory Body Obligations: Entities like the USDA or FDA may require supplementary checks or certifications for certain items.

For Canada:

  • Import Control List (ICL): The ICL identifies goods that are subject to import controls. If your product is on this list, you’ll need a permit to import it into Canada.
  • Customs Self Assessment (CSA): The CSA program streamlines the customs declaration process for pre-approved importers, carriers, and registered drivers.
  • Canadian Customs Bond: The Canada Border Services Agency (CBSA) mandates importers in certain circumstances to obtain a customs bond, sometimes referred to as form D120, to bring merchandise into Canada. This bond serves as a guarantee to the government of Canada, ensuring that importers comply with all applicable laws and regulations, including the payment of all import fees, taxes, and requirements imposed on the importer.
  • Business Number (BN): In order to import goods into Canada, whether as a company or an individual, one must obtain a Business Number (BN) for an import/export account, which is issued by the Canada Revenue Agency (CRA).

Documents and Other Considerations When Importing to the USA and Canada

Importing to USA and Canada

  • Bill of Lading (BOL): A contract between the owner of the goods and the transporter. Provided by the carrier, it describes the type, quantity, and destination of the products being shipped.
  • Commercial Invoice (CI): Contains details about the product, vendor, purchaser, and transaction.
  • Packing List (PL): Describes the packaging, contents, and weight of the shipment.
  • Certificate of Origin: Confirms in which country the goods have been produced, manufactured, or processed. It’s essential for determining the duties and tariffs applicable.

Importing to the US:

  • Importer Safety Submission (ISF): Often referred to as “10+2”, this filing must be electronically submitted to Customs and Border Protection before the cargo is shipped to enhance security measures.
  • ACE Import Manifest Documentation: Managed by US Customs and Border Protection (CBP), this system mandates that those importing, as well as carriers and freight agents, provide CBP with manifest specifics before cargo arrives. This approach allows the government body to conduct risk evaluations and streamline the customs approval process.

Importing to Canada:

  • Canada Customs Invoice (CI1): Required to verify the value, size, quantity, and nature of the shipment, and the CCI specifically meets the specifications of Canada’s customs regulations.
  • Import Documentation: Imported products are listed in this document, which is submitted by the importer. This document assists customs officials in overseeing and regulating the import process.
  • ACI eManifest: Canada’s Advanced Commercial Information (ACI) eManifest runs under the jurisdiction of the Canada Border Services Agency (CBSA). This electronic submission system mandates carriers, importers, and freight forwarders to provide pre-arrival cargo details. With the ACI eManifest, authorities in Canada are able to assess the risks associated with shipments entering Canada, thereby speeding up customs clearance.

Adhering to the comprehensive set of regulations and compliance standards is vital when importing goods from Vietnam into the US and Canada. A thorough understanding and correct application of these rules are essential for lawful imports and ensuring the safety of the consumers.

How a Freight Forwarder Can Help Streamline Import Regulations and Customs Duties Process

Managing the intricacies of import regulations and customs duties can be a daunting task. This is where freight forwarders come into play, acting as indispensable partners in the import process. They take charge of customs duties in accordance with applicable laws and regulations. By handling these complex operations, freight forwarders enable SMBs to concentrate on their essential business functions. This professional assistance alleviates the pressures associated with international shipping, making the process more accessible and less stressful for businesses.

Ship4wd is Your Trusted Partner for Importing Goods from Vietnam

Navigating the intricacies of importing goods from Vietnam can be a challenge. That’s where Ship4wd steps in as a trusted partner for SMBs, supporting you through every step along the way. With a rich track record of facilitating imports from Vietnam, we work hand-in-hand with our clients, guaranteeing every process is handled with precision.

Ship4wd, with its focus on SMBs, places paramount importance on exceptional customer service. We serve as your all-encompassing solution, managing every detail of your shipment, freeing you to concentrate on what matters most: growing and running your business.

Additionally, Ship4wd offers added services like cargo protection and comprehensive financing solutions, ensuring your importing experience is smooth and stress-free.

How to Get Started with Ship4wd

Are you looking for ways to simplify your importing process from Vietnam? We’re here to assist you every step of the way. Be it importing to the US, Canada, or other international locations, tap into our platform for immediate global shipping quotes. Our dedicated digital platform provides global shipping solutions backed by 24/7 professional customer support, guaranteeing efficient management of your Vietnamese imports.

When it comes to the nuances involved in importing goods from Vietnam, Ship4wd stands ready to assist. Sign up with Ship4wd today, and let us handle all of your logistical shipping needs while you focus on scaling your business.

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