Sourcing from Vietnam

 

From searching for suppliers to having products shipped, buyers looking to diversify their sourcing within Vietnam can find step-by-step support in this guide. In a free, downloadable PDF format, each guide provides information on:

Key export statisticstop trading partners and principal exports
Manufacturing centersmajor production centers, special economic zones and export processing zones
Trade servicestrade offices, services and resources
Banking & financemajor commercial banks and loan availability
Paying for your purchasepreferred payment methods
Export documentationstep-by-step export procedure
Settling trade disputestips to avoid and handle trade disputes

View the complete eBook online by clicking the tabs below. You may also download your free PDF copy here.

Key export statisticsManufacturing centersTrade servicesBanking & financePaying for your purchaseExport documentationSettling trade disputesProduct galleryDownload PDF

Sourcing from Vietnam: Key export statistics

This section discusses key industries and products of Vietnam. It is part of the New Sourcing Market’s Sourcing from Vietnam series to empower buyers looking to enter new supplier markets in Asia.

Vietnam has the world’s 55th largest total gross domestic product in 2014, according to World Bank. Its GDP average growth rate was 6.2 percent from 2000 to 2015, reaching an all-time high of 8.5 percent in the fourth quarter of 2007 and a low of 3.1 percent in the first quarter of 2009.

Vietnam has the world’s 55th largest total gross domestic product in 2014, according to World Bank. Its GDP average growth rate was 6.2 percent from 2000 to 2015, reaching an all-time high of 8.5 percent in the fourth quarter of 2007 and a low of 3.1 percent in the first quarter of 2009.

The country’s GDP in 2015 was dominated by the services sector, which comprises approximately 48 percent, followed by manufacturing, which accounts for 39 percent and agriculture trailing at 17 percent, according to The World Factbook. Other main exports include cashew nuts, fresh and processed fruits and vegetables, petroleum oil, plastic, iron and steel, rubber, and precious metals and stones.

Vietnam’s economic growth rate has been among the highest in the world with an average of 7.2 percent a year from 2001 to 2010, according to 2013 report of the US Department of Commerce. In the same period, industrial production had an average of approximately 12 percent a year, reaching an all-time high of 28.4 percent in January of 2010.

Inflation is considered a major risk for the economy with an average rate of 6.8 percent from 1996 until 2016, according to the Trade Economics. All-time high inflation rate was 28.2 percent in August 2008, while the lowest was -2.6 percent in July 2000.

trading partners

Consumer prices in Vietnam rose by 1.3 percent year-on-year in February 2016, following an increase of 0.8 percent in the previous month.

The government has recently shifted policies, moving away from trying to achieve a high growth rate to stabilizing the economy through tighter fiscal and monetary regulations.

Home to the 12th largest labor force in world, Vietnam has a population of 94.3 million with 54.9 million workers as of 2015, according to The World Factbook.

Principal exports

Top 10 philippine principal exports

Sourcing from Vietnam: Manufacturing centers

This section discusses key manufacturing centers in Vietnam. It is part of the Developing Country Sourcing’s Sourcing from Vietnam series to empower buyers looking to enter new supplier markets in Asia.

Vietnam is located in Southeast Asia bordering China, Laos and Cambodia as well as the Gulf of Thailand, Gulf of Tonkin and South China Sea. Vietnam’s total land area of 331,210 sq. km is separated into six regions, 63 provinces and five municipalities, namely Hanoi, Ho Chi Minh City, Can Tho, Da Nang and Hai Phong.

Key economic zones

In 2004, Vietnam was divided into three key economic zones (KEZ) by the government:

The Northern Key Economic Zone: This KEZ is made up of eight municipalities and provinces. The government planned to “leverage the plentiful agricultural manpower for economic growth” here, according to report by Dezan Shira & Associates.

The Central Key Economic Zone: The economic zone is called the “growth nucleus” of the country, and promotes the marine industry. In the future, the zone aims to be more developed in sectors like oil and gas, shipbuilding, coastal tourism, logistics and other high-tech industries.

The Southern Key Economic Zone: This zone is dedicated to the development of commerce, exports, electricity, technology, banking, finance, services, tourism and telecommunications. The South has thus been dubbed “the leader of industrialization and modernization of the whole country,” according to Dezan Shira & Associates.

Industrial and export processing zones

There are 302 industrial zones (IZ) and export-processing zones (EPZ) in Vietnam.

Export processing zones are industrial parks with incentives for foreign investors investing in export-oriented businesses. EPZs were set up to meet the following objectives:

  • Increase foreign exchange earnings
  • Create employment opportunities
  • Upgrade the skills of local manpower
  • Create linkages (essentially backward linkages) by increasing demand for local raw materials, semi-finished goods, or packing materials, and promoting the growth of ancillary industries
  • Encourage technology transfer
  • Develop Vietnam’s regions

incentives

One of Vietnam’s largest cities, Ho Chi Minh, has 24 industrial parks and export-processing zones and a high-tech park located on 3,000 hectares of dedicated land.

Many economic processing zones have their own industrial zone authority that assists buyers with selecting the best industrial or export-processing zone based on their needs.

Ho Chi Minh City Export Processing and Industrial Zones Authority (HEPZA) is an example of one of these authorities. HEPZA currently manages 15 EPZs and IPs in Ho Chi Minh City.

Major production centers

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Sourcing from Vietnam: Trade services

This section discusses trade services in Vietnam. It is part of the Developing Country Sourcing’s Sourcing from the Vietnam series to empower buyers looking to enter new supplier markets in Asia.

Conducting initial research in your home country before going on a buying trip is key when searching for the right supplier.

Conducting initial research in your home country before going on a buying trip is key when searching for the right supplier.

While getting the name of prospective suppliers and their addresses may be easy, determining their reliability as well as checking prices, quality and packaging available can sometimes be a challenge. Even if you hire an agent to handle the purchasing, there is no substitute for examining all aspects of the deal personally to make sure that everything is suitable for your plan and needs.

Vietnam Trade Promotion Agency 

Vietnam Trade Promotion Agency (VIETRADE) is a government organization under the Ministry of Industry that is responsible for state regulation of trade and investment promotion for the development of industry and trade. Some of its main activities include:

Proposing policies and measures for the development of business support activities, national branding programs and investment for development of industry and trade to the government.

  • Providing business information to trade support institutions and enterprises.
  • Conducting market research and analysis in order to formulate national trade promotion policies.
  • Cooperating with international and foreign organizations in trade promotion.
  • Assisting and guiding local industry and trade departments, Vietnam trade support institutions, and oversea trade representative offices in trade and investment promotion.

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Trade publications

A number of magazines, buyers’ guides and websites are published in Vietnam and circulated around the world. These publications and directories are found online and in Vietnamese trade offices and embassies and are designed to give foreign buyers the latest information in Vietnamese products.

Vietnam Chamber of Commerce and Industry Vietnam Chamber of Commerce and Industry (VCCI) is one of the largest trade promotion agencies in the country. VCCI is an independent, non-government and non-profit organization with the mission to “protect and assist business enterprises, to contribute to the socioeconomic development of the country and to promote economic, commercial and technological co-operations between Vietnam and the rest of the world,” according to its website. VCCI is a direct member of the International Chamber of Commerce organization.

VCCI is also involved with the Vietnam Business Forum Magazine (VBF), which publishes four English issues and two bilingual (English-Vietnamese) issues monthly. The magazine releases publications featuring industries, events and diplomatic relations between Vietnam and other countries. VBF als oorganizes several business-matching events to provide a platform for enterprises seeking investment and business opportunities.

The Vietnam Chamber of Commerce and Industry offers an export directory that can be of assistance to potential buyers.

Trade associations

Associations in key export-oriented industries sometimes offer services that can be helpful to buyers. Many are prepared to attend to trade and investment inquiries. They can connect prospective buyers with local manufacturers and arrange buyer- seller meetings. They also conduct market surveys and organize overseas trade missions. Many associations have publications that can be useful to both manufacturers and overseas buyers.

Embassies and trade offices 

Vietnamese embassies in various countries are also commissioned to promote export opportunities in Vietnam.

Most trade offices are attached to the embassies and can assist buyers with finding the right suppliers. Many have displays of

Vietnamese products, library facilities with directories and trade publications and staff to answer inquiries about export products, suppliers and manufacturing center. The staff can also direct you to contacts in Vietnam, including government agencies that assist foreign buyers and trade associations.

Trade association directory

Name of associationPhone numberEmailAddressWebsite
Investment and Trade Promotion Center (ITPC)(84-8) 39104565[email protected]51 Dinh Tien Hoang Street, District 1, Ho Chi Minh city, Vietnamhttp://itpc.gov.vn/
Vietnam Handicraft Exporters Association (Vietcraft)(84-4) 39369284[email protected]1F, 20 Ly Thuong Kiet, Hoan Kiem, Hanoi, Vietnamhttp://www.lifestyle-vietnam.com/
Handicraft and Wood Industry Association of Ho Chi Minh City (HAWA)(84-8) 3526-4020[email protected]185 Ly Chinh Thang - Ward 7 - District 3, Ho Chi Minh City, VietnamHawa.org.vn

Sourcing from Vietnam: Banking & finance

This section discusses trade services in Vietnam. It is part of the Developing Country Sourcing’s Sourcing from the Vietnam series to empower buyers looking to enter new supplier markets in Asia.

Vietnam’s banking system continues to undergo vast reforms since the economy opened up from international isolation in the early 1990s. Although Vietnam is making progress toward developing a modern banking system and financial markets, it still lags behind international standards according to a 2013 report by the U.S. Department of Commerce.

Banking networks and services are expanding in an effort to tap the potential of providing retail banking services to the people in Vietnam. According to the State Bank of Vietnam (SBV), only 20 percent of the population in the country holds a bank account.

State Bank of Vietnam

The State Bank of Vietnam is the main financial regulatory arm of the government. SBV operates under the oversight of the government and is subject to prime ministerial approval or consultation, so it is not considered an independent body. SBV currently supervises:

  • 2 policy banks: the Vietnam Bank of Social Policies and the Vietnam Development Bank
  • 3 joint venture banks: VID Public Bank, Indovina Bank Limited, Vietnam-Russia Joint Venture Bank
  • 28 joint stock commercial banks
  • 5 wholly-owned foreign banks: HSBC, Standard Chartered Bank, ANZ Bank, Hong Leong and Shinhan Vina
  • 50 representative offices of foreign banks
  • 50 branches of foreign banks
  • 16 financial companies
  • 11 financial leasing companies

Banking services

Currently, Vietnam’s banking system includes six simultaneous payment systems including interbank e-payment, interbank e-transfer, clearing system, e-transfer systems of commercial banks, bilateral payment system and SWIFT. The Second Payment System and Bank Modernization Project (PSBM2) has significantly improved the speed and reliability of interbank payments in Vietnam, according to the World Bank. PSBM2 has enabled a majority of banks to now offer eBanking services to customers.

In recent years, payment services in Vietnam have undergone significant changes and development. There are more and more new payment services to meet the diverse demands of customers. A united system connecting ATMs and the POS system has been increasingly perfected, as have card alliances including as Bancnet, VNBC and Smartlink. These provide solid infrastructure to develop a comprehensive and efficient payment system in Vietnam.

International card providers such as Visa, MasterCard, JCB, Union Pay, etc. are also present in Vietnam and proactively cooperate with local banks and e-payment gateways to provide more utility services for card holders.

Current banking outlook 

Vietnam’s banking and finance situation is relatively stable. SBV recently made changes in its monetary policies with the key objectives of controlling inflation, restructuring financial, etc.

PH commercial banks

Its consumer price index (CPI) was less than 5 percent, the lowest in the past 14 years, in 2015. During the first two months of 2016, Vietnam experienced a slightly increased inflation rate of 1 percent due to increased purchasing power for the Lunar New Year holiday. Limited liquidity of financial institutions, imbalance between deposit and mobilizing interest rate and USD appreciation compared to VND are the main drivers of increased loan and saving interest rates. Since the third quarter of 2015, SBV has raised interest rates many times.

With these modifications, SBV aims to mobilize more capital into the economy to meet the credit demand as well as ensuring benefits and safety of the banking and finance system.

Sourcing from Vietnam: Paying for your purchase

This section discusses payment options in the Vietnam. It is part of the Developing Country Sourcing’s Sourcing from the Vietnam series to empower buyers looking to enter new supplier markets in Asia.

Payment methods

Payment methods

Sourcing from Vietnam: Export documentation

When exporting from Vietnam, certain export procedures must be followed. Exported goods must pass customs clearance that checks the quality, quantity, volume of goods and specifications standards according to the Customs Department of Vietnam.

Export procedures

There are common documents required by many countries to export goods. Exporting goods from Vietnam requires the following documents:

  • Customs declaration form for export goods (original)
  • Detailed packing list (original)
  • Export permit for goods requiring export permit (original)
  • Purchase and sale contract or equivalent documents (copy)
  • Other documents as stipulated by law for specific items (copy)

Companies regularly exporting and importing the same exact goods within a given period may use a single customs declaration form for carrying out relevant customs procedures if goods are listed under the same purchase and sales contract and are delivered within the delivery time listed on the purchase contract, according to a report by Dezan Shira & Associates.

Export shipment procedures are typically completed on the same day. Exporting one standard container of goods by sea takes 21 days for obtaining, filling out and submitting all documents, inland transport and handling, customs clearance and inspection, port and terminal handling, not including sea transport time.

The cost to export is $610 per container. This price covers all documentation, inland transport and handling, customs clearance & inspections, port and terminal handling. This number covers official costs only without other incentives.

Export procedures

Labeling regulations

The Ministry of Science and Technology is in charge of the uniform state management of labeling throughout the country. Exported goods only need to be labeled based on the requirements of the importer and the importer’s country and the labels can be written in the language of import country.

Certificate of Origin

A certificate of origin (C/O) is a document issued by an organization from a country or territory of the exporter to indicate the origin of the goods.

The Ministry of Industry and Trade is in charge of drafting, submitting to authorities to issue or issuing under its own authority legal documents to prove the origin of the goods. The Ministry of Industry and Trade also authorizes the Vietnam Chamber of Industry and Commerce and other organizations to issue the certificate of origin.

In order to apply for a Certificate of Origin, the exporter must put together a trade dossier with the following documents:

  1. Signed C/O application form
  2. Certified copy of business registration certificate of trader
  3. Certified copy of certificate tax code registration (if any)
  4. List of units of manufacturing goods (if any) requesting for C/O
  5. The dossier must then be handed in directly or by post to the head office of the C/O issuer.

Sourcing from Vietnam: Settling trade disputes

This section discusses settling trade disputes of Vietnam. It is part of the Developing Country Sourcing’s Sourcing from Vietnam series to empower buyers looking to enter new supplier markets in Asia.

Vietnam is in the midst of a strong development and integration period with an influx of fast growing trade and business. Unfortunately, disputes in business and trade— especially international contracts — areal so significantly increasing in terms of case number and commodities. According to WTO, there have been 503 international trade dispute cases.

The nature of trade disputes is also becoming more diverse and complicated with issues relating to contracts for international sales of goods, service contracts, transport contracts, agent contracts, insurance contracts, among others.

Methods for settling trade disputes

In Vietnam, mediation is preferred to settle disputes. As such, parties in the contract commonly agree to solve any conflicts through negotiation, mediation and conciliation. It is estimated that approximately 50 percentofthetotaleconomic disputes are resolved by conciliation and mediation. If a resolution cannot be reached through mediation, economic tribunals or arbitration is the next option. The majority of trade disputes are solved in the economic tribunal under the people’s court.

In addition to the economic tribunal, there are seven independent Arbitration Centers available in Vietnam for trade dispute settlement. Of Vietnam’s legal & arbitration systems, Vietnam International Arbitration Centre (VIAC) is considered the most trustworthy. It is typically the first choice among the seven centers for resolving disputes.

From 1993 to 2015, the number of disputes resolved by VIAC has increased year by year, reaching nearly 1,000 cases. Of

those cases, 70 percent were disputes in international trade related contracts. However, the total number of cases solvedin arbitration centers accounts for less than 1 percent of totalcases. The court’s revocation of local arbitration awards, decisions to not fully recognized foreign arbitration award and poor awareness of arbitration in settling disputes are among the key factors limiting application of arbitration in international trade issues in Vietnam.

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Legal and arbitration systems

Payment methods

Sourcing from Vietnam: Product gallery

Choose from our gallery of innovative and new products from the Vietnam selected by our export consultants and as featured on the Analyst’s Choice section of GlobalSources.com. For more Vietnamese suppliers and their latest products, visit DevelopingCountrySourcing.com.

Women’s wool coat

L&M Vina Co. Ltd’s model L&M-09 is a classic double-breasted women’s wool coat. It measures 58cm long and 39cm wide. OEM orders are welcome. The minimum order requirement is 1,000 pieces. Main export markets are North America, Europe and Asia.

Kitsilver

Men’s boardshorts in recycled yarn fabric

The model BS-014-5 from QTNP Apparels JSC is a pair of men’s boardshorts made with 80 percent recycled polyester and 20 percent spandex. It has bonded eyelets, drawstring cord, zipper and a key loop at the back pocket. OEM orders are accepted. Delivery is 60 to 90 days.

native hat

Plaid handwoven water hyacinth bathroom set

Bathroom set model OHC16116S5 by Orient Handicraft Co. Ltd from Vietnam includes a laundry basket, towel basket, waste bin, slanted basket and tissue box. Handwoven water hyacinth in plaid of light and dark colors, this basket set helps organize linens, toiletries and other accessories. They can help save freight costs and ensure safety of the products when used as packages.

orbital chair

Underbed trolley water hyacinth basket

Orient Handicraft Co. Ltd has made its basketware model OHC-16120 more convenient to use by attaching four wheels. Made of handwoven water hyacinth in natural color, it saves space in a room, as it is designed to be placed underneath the furniture. It is easy to pull out from under a bed or table.

chair

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