How To Export From Vietnam To The EU // Regulations, Taxes, and Tariffs when importing to the European Union
Vietnam, the Southeast Asian powerhouse, has roared onto the global stage as a manufacturing and export marvel. Its bustling factories, agile workforce, and growing trade partnerships present a compelling opportunity for businesses eyeing access to the vast European Union market. But navigating the intricacies of exporting from Vietnam to the EU can feel like wrangling a mythical dragon – intricate, powerful, and potentially rewarding.
This guide delves into the dragon's lair, dissecting the complexities of exporting Vietnamese goods to the EU clearly and practically. We'll equip you with the knowledge and tools to chart your course through trade agreements, regulatory hurdles, and logistical challenges. Whether you're a seasoned exporter or a fledgling entrepreneur, this article will illuminate the path to unlocking the vast potential of the EU market for your Vietnamese products.
So, prepare to unleash your inner explorer, sharpen your entrepreneurial claws, and join us as we embark on a journey through the intricate dance of exporting from Vietnam to the EU. The dragon's treasure awaits; you can claim your share of its riches with the right tools and knowledge.
This introduction offers a catchy and informative overview of the article's purpose and audience. It uses metaphors and strong verbs to engage the reader and pique their curiosity. Feel free to adapt it further to your specific product or angle on the subject.
How To Export From Vietnam To The EU
The newly introduced “Investment Protection Agreement” between the EU and Vietnam aims to remove most import and export taxes on goods. It was signed by the European Commission and the Vietnamese government and ratified by the largest economies in Europe. As a result, the EU instantly eliminated most taxes on Vietnamese goods, while Vietnam eliminated taxes on 65% of EU-originated goods. This guide will explain the basics of shipping between the European Union and Vietnam, including average costs and regulations. Read more about taxes and regulations.
Key Numbers For EU-Vietnam Trade:
Vietnam is the 17th largest exporter of goods in the European Union. It is the 2nd largest exporter to the EU from the ASEAN block.
The EU exports high-tech products, aircraft, cars, and industrial machinery to Vietnam.
Vietnam’s largest exports to the European Union are electronics and textiles.
EU investors invest €5-10B annually in Vietnamese manufacturing by opening branches or collaborating with existing Vietnamese manufacturers.
Shipping Costs From Vietnam To The EU
The average shipping cost from Vietnam to the European Union varies by the shipping mode, the shipment size, and the season. The Coronavirus pandemic increased the average shipping cost (similar to China), but shipping costs remain relatively affordable for most businesses. Vietnam has well-established links between ports on its Pacific Coast and major European ports such as Hamburg and Rotterdam. The following is an average cost breakdown:
€2,000-3,000 for a dedicated 40’ container.
€1,000-2,000 for a dedicated 20’ container.
€500-1,000 for an LCL shipment (mixed with other goods).
€500-1,000 express air shipping (100 kg).
The shipping options are either by ocean freight (25-35 days) or air freight (3-5 days). Shipping by rail is possible but logistically complex and not profitable. In addition, shipping costs can increase in peak season, which is October, November, and December. This is when the shopping season is in full swing, and the demand for goods increases significantly.
The consensus on shipping between Vietnam and the EU is that sea freight is the most profitable shipping method. The routes are reliable, the cost is affordable, and you can move the biggest amount of goods. Airfreight is much faster, but you might struggle to remain profitable if you ship by air long-term. Sea shipping takes four weeks to reach EU ports (ex., Germany and the Netherlands). Customs clearance in Vietnam is very fast if you deal with the right supplier. We can help you with that.
Vietnam Free Trade Agreement With EU
The European Union (EU) and Vietnam signed a landmark Free Trade Agreement (EVFTA) in 2019, officially entering into force in August 2020. This comprehensive agreement has opened doors for extensive trade between the two regions, fostering economic growth and creating exciting business opportunities.
Breaking Down Barriers: Key Benefits of the EVFTA
Tariff Reduction: The EVFTA promises to gradually eliminate 99% of tariffs on goods traded between the EU and Vietnam. This translates to significant business cost savings and increased competitiveness for Vietnamese exports in the European market.
Streamlined Regulations: The agreement simplifies customs procedures and harmonizes technical regulations, making it easier for Vietnamese goods to comply with EU standards and access the market.
Enhanced Investment Protection: The EVFTA includes provisions for protecting foreign investments, providing greater certainty and confidence for European businesses operating in Vietnam.
Boosting Services and Public Procurement: The agreement opens Vietnam’s market for EU service providers in telecommunications, transport, and environmental services. It also grants EU companies greater access to Vietnamese public procurement tenders.
Unlocking Vietnam’s Potential for European Businesses
With its young and skilled workforce, growing middle class, and strategic location in Southeast Asia, Vietnam presents a lucrative market for European companies. The EVFTA has made it easier and more attractive for European businesses to:
Export goods to Vietnam: With tariffs being phased out, European manufacturers and exporters can now compete more effectively in the Vietnamese market.
Invest in Vietnam: The streamlined regulations and investment protection provisions of the EVFTA encourage European companies to set up production facilities or joint ventures in Vietnam.
Source goods from Vietnam: European businesses can leverage Vietnam’s competitive production costs and access to raw materials to source high-quality goods at competitive prices.
Challenges and Considerations
While the EVFTA offers significant benefits, it’s important to acknowledge some challenges:
Small and Medium-Sized Enterprises (SMEs): Smaller businesses may face difficulties navigating the complexities of the agreement and adapting to its requirements.
Non-Tariff Barriers: While tariffs are being reduced, non-tariff barriers such as technical regulations and product standards can still pose challenges for Vietnamese exporters.
Sustainability Concerns: Concerns exist about the environmental impact of increased trade and production, particularly in Vietnam’s garment industry.
The EVFTA: A Stepping Stone to a Stronger Partnership
Despite these challenges, the EVFTA represents a significant step forward in EU-Vietnam relations. It is a testament to both parties’ commitment to free trade and economic cooperation. The agreement is expected to generate substantial economic benefits for both regions, creating jobs, boosting investment, and promoting sustainable development.
As the EVFTA continues to be implemented, businesses on both sides will have the opportunity to adapt and seize the exciting opportunities it presents. By working together, the EU and Vietnam can build a stronger and mutually beneficial economic partnership for the future.
In conclusion, the EU-Vietnam Free Trade Agreement is a game-changer for businesses on both sides. It has opened doors to increased trade, investment, and economic growth, paving the way for a more prosperous partnership between the EU and Vietnam.
I hope this information is helpful. Please let me know if you have any other questions.
Importing Vietnamese Goods In The EU (Tariffs)
The EU will eliminate most tariffs on goods originating from Vietnam in EU states, and once they clear through one port, the goods can be sold tax-free in other areas of the European Union. Therefore, if we analyze tariffs before the free trade agreement took place, the following are the averages you can expect:
0% (tax-free) for electronics // Goods such as laptops, headphones, smartphones, motherboards, and others are tax-free.
0-3% for furniture //Vietnam’s furniture industry is growing significantly, and the EU is one of the biggest importers. Furniture goods enjoy a very low tax rate.
10-12% for textiles // Fashion-related items such as t-shirts and sweatshirts enjoy 10% tax rates on average.
Customs clearance matters when you import goods at your port, and you must ensure you prepare the right documentation. The supplier and forwarder must provide detailed documentation because mistakes can be costly, and EU customs can reject your goods. Reach out to us if you want to deal with the best suppliers.
Documentation For Importing In The EU
To import Vietnamese goods into the EU, you must provide detailed documentation regardless of the product you’re importing. Most suppliers can work with freight forwarders and help you obtain those documents. The following documents are necessary:
Supplier invoices.
Certificate of origin.
Packaging list.
Letter of credit/payment terms/bank invoices (showing the merchandise’s value).
Bill of lading for all ocean freight.
Airway bill for all air freight.
Other documents: Licenses might be required for particular items such as pharmaceuticals, chemicals, etc.
The EU Customs officials in the country you’re importing will request these documents to greenlight your shipment and allow you to pay your duties. Consult us to find the best suppliers with experience shipping to the European Union. We work with the top suppliers in the country, and we can help you with the whole process.
How To Look Up Regulations For Importing To The EU From Vietnam
Ready to import to the EU from Vietnam? This guide will help you get started. The EU and Vietnam signed an FTA (Free Trade Agreement) 2020 to remove 70-100% of all import tariffs in both regions. As a result, Vietnamese manufacturers can easily place their goods on the European market and enjoy privileges similar to EU member states. The EU aims to liberalize most tariffs on Vietnamese products by the mid-2020s, and many of these are already in force. Vietnam likewise removes taxes on many European products, making it easy for European manufacturers to move parts to their Vietnamese factories.
The FTA between Vietnam and the EU is the second FTA in the ASEAN region after Singapore signed its trade agreement. This is one of the most historic free trade agreements in recent years, and Vietnam is the 4th Asian country to sign a trade agreement with the EU after Singapore, Japan, and South Korea. All manufacturers who wish to export to the EU will benefit from the FTA. The tariffs on most popular goods are already 0%, and you only have to pay the local VAT in the EU member state you’re importing. In addition, it’s easier to import to the EU than the US because you don’t have to abide by labeling requirements.
The most important facts about importing from Vietnam to the EU:
EU tariffs are some of the world’s lowest, and the EU lowered tariffs on Vietnamese goods to 0% for many popular products, such as electronics.
The EU market will remove almost all taxes on Vietnamese goods within five years (except local VAT taxes).
The EU market relies heavily on developing countries to import goods such as textiles and electronics.
The EU is one of the world’s largest importers of electronics. The European market consumes more LCDs than the US, Canada, and Japan combined.
The EU is a great export destination for all Vietnamese manufacturers looking to export raw materials and intermediary goods to help manufacture in Europe. For instance, Vietnamese wood is in high demand in Europe.
Top Resources For EU Regulations
The following are some of the most important resources for import regulations in the European Union:
Système Intégré de Gestion de Licenses
The Système Intégré de Gestion de Licenses (SIGL) is the most important database for regulations that applies on a Federal level in the European Union, and all member states follow. This translates to “Integrated System For Managing Exports And Import Licenses.” It is applied in the EU for some of the largest import items, such as textiles, footwear, wood, and steel/metals.
Visit the SIGL website to find the latest updates on regulations that apply to all third countries (non-member states). Ensure you comply with SIGL regulations in your area to get your product imported on EU soil.
Textile Regulations In The EU
The textile directives of the SIGL system deal with import authorizations for all textiles imported into the EU. In certain years, the textile industry in the EU can have restrictions such as quotas on textiles being imported from certain countries. When writing, there aren’t any restrictions or quotas imposed on Vietnam.
The new textile regulations (EU 2015/936) of the European Parliament and the Council dictate specific import rules for textiles imported from countries that are not included in bilateral agreements with the EU. This does NOT apply to Vietnam because it has an FTA with the European Union.
Wood Regulations In The EU
· Read more: https://webgate.ec.europa.eu/siglbo/public/reports/wood
The European Union imports millions of tons of wood for manufacturing in the domestic sector, specifically the furniture industry. Most wood in the EU is imported from Russia, but billions of euros worth of wood and furniture arrive from Vietnam.
The latest EU Commission Regulation from June 2012 dictates the quotas on exporting wood from certain countries to the European Union. However, Vietnam is currently not subject to any restrictions regarding wood imports.
Metal Regulations In The EU
The European Union groups steel and aluminum into one category and imposes a surveillance regime for all steel in the EU. Customs in the European Union will likely check your shipment to find out if it meets minimum safety standards.
The latest EU Commission Regulation from 2017 introduces new regulation surveillance for steel products originating in certain countries. In addition, there is special regulation for aluminum products originating in third countries (non-member states).
How To Get Preferential Treatment In The EU
Vietnamese goods enjoy preferential treatment in the European Union. However, they must abide by the import regulations of the EU listed above. The new FTA between Vietnam and the EU will expedite importing of most goods in Vietnam. Likewise, European manufacturers can place their products on the Vietnamese market. The following criteria apply:
The product must originate in Vietnam. You need to present evidence the product was made in Vietnam, such as invoices, contracts, and other details. The “Made in Vietnam” sticker is optional for the EU (unlike the US, where it’s mandatory). Make sure you prepare origin documentation for each piece you import.
· The product meets requirements set by individual regulators. For example, it meets textile manufacturing standards determined by SIGL.
EUR.1 Certificate Of Origin
An EUR.1 certificate must accompany all shipments in Vietnam destined for the European Union. This paper certifies the product’s origin in Vietnam through a declaration of origin. Unfortunately, Vietnam hasn’t exercised the ability to use self-certification. Note that this only applies to shipments with a total value of over €6,000. If the value of your merchandise is lower than €6,000, you won’t need the EUR.1 certificate to certify the origin.
The EU uses a REX certification system, accepted in Vietnam when importing European items. The Vietnamese side is expected to apply that system soon. The bottom line is that importing from Vietnam to the European Union is easy, and as long as your products comply with the EU’s safety standards, you can clear your goods at the European port.
How To Find Taxes And Duties For Importing To The EU
The European Union signed a free trade agreement with Vietnam in June 2020 to remove import taxes on Vietnamese goods over the next ten years, while Vietnam will liberalize most import taxes on EU goods (except for a few products).
Vietnamese exporters benefit greatly from this new trade deal, and it’s one of the few privileged nations that enjoy low tariffs for their goods. The FTA went into force in August 2020, and within seven years, the EU is expected to drop tariffs on all Vietnamese goods altogether. This guide will showcase resources for exporting from Vietnam to the EU, HS codes, VAT import taxes, and price examples.
Top Resources For Exporting From Vietnam To The EU
The following are the top resources you need to calculate how much you’ll pay in tariffs for individual goods:
HS Code Search: https://www.tariffnumber.com/
Access2Markets EU Calculator: https://trade.ec.europa.eu/access-to-markets/en/home
TARIC (The integrated Tariff of the European Union): https://ec.europa.eu/taxation_customs/business/calculation-customs-duties/what-is-common-customs-tariff/taric_en
Pro Tip: Use the HS code search to discover your product code. For example, a laptop would have an HS code of “847130”. Then, you can plug this HS code into the EU tariff calculator and find out how much you’ll owe when importing from Vietnam to your EU country of choice.
Best Items To Import From Vietnam To The EU
The best items to export from Vietnam to the European Union have dismantled tariffs, making your exports more profitable. The EU will grant certain preferential treatment for Vietnamese goods such as textiles - most of which will be duty-free within 5-7 years. In addition, the EU dropped duties on certain exports, such as rice. So, if you’re exporting rice from Vietnam to any European country, you’ll only have to pay the local VAT. The EU instantly dropped tariffs for food exports such as garlic, mushrooms, sugar, sweet corn, surimi, and tuna. Shrimps and non-canned tuna are expected to be tariff-free within three years.
The FTA aims to eliminate tariffs between the European Union and Vietnam. This will stretch across several key industries. For one, the EU will lower taxes on sensitive Vietnamese industries such as fisheries (trout, salmon, lobster, tuna, etc.) and lower tariffs on textiles (t-shirts, sweatshirts, and others). In addition, Vietnam agreed to lower tariffs on European pharmaceuticals, cars, and chemicals. Other industries benefiting from the FTA are motorcycles, vehicle parts, wines, sprints, cars, chicken, and alcohol. The only industries Vietnam will maintain full tariffs on (for exports from the EU) are refined sugar, salts, and eggs.
If you’re establishing a manufacturing business in Vietnam solely for exporting to the European market, your profits will likely increase due to the lower tariffs. Vietnamese goods are now a special category listed under the TARIC (Integrated Tariff of the European Union) system. If you research import duties, you’ll find Vietnam is not subject to most tariffs. However, to import from Vietnam at lower rates, you need proof the goods originated in Vietnam, and we can help you get in touch with suppliers who can provide evidence and adequate marking.
Examples Of Products Shipped From Vietnam To The EU
Below, we’ve laid out some examples of tariffs you can expect on different goods originating in Vietnam once they arrive in the EU. We work with European manufacturers and export everything from textiles to electronics and ceramics. Different categories of items are subject to different taxes. In general, the base tariffs fluctuate between 0-10% on average, and you also have a VAT surcharge paid locally, totaling 15-20% of the value of the items. This brings the total to 20-25% on average for most goods.
The HS code combined with the EU’s “Access2Markets” tool allows us to research products and determine exactly how much we’ll owe in import tariffs for every European country. The main thing you need is the HS code and the destination country. Use the “HS Code Search” tool in the resources above or directly input your item + HS code on Google to find the code. For example, once we input “Laptop HS Code,” the international HS code is 847130. For the examples below, we use different categories of items to estimate import taxes:
Laptop (HS code 847130 - from Vietnam to Germany): 0% tariff.
Microphone (HS code 8518100090 - from Vietnam to Germany): 0% tariff.
Tree (HS code 06022080 - from Vietnam to Germany): 8.30% third-country duty.
Cup (HS code 6912002191 - from Vietnam to Germany): 5% third-country duty.
VAT Import Taxes in the EU
The FTA between the EU and Vietnam does not mean you won’t have extra charges even when your tariffs are 0%. For example, each member state in the EU imposes its VAT charge for exported items. The VAT differs in every member state but averages 15-20%. To calculate how much VAT tax you’ll owe, find the total value of the item and then calculate the percentage based on the country you’re importing to.
For instance, in Germany, the standard VAT rate is 19%, which one must pay before the goods are cleared at the port of entry. The only exception for VAT tax is when the value of the package is under €20, but most orders being shipped are far beyond that threshold. So if you’re shipping €20,000 worth of goods to Germany from Vietnam and the average VAT is 19%, you’ll have to set aside €4,000 for VAT alone. It’s also possible to obtain lower VAT rates for certain products.
Here’s a list of VAT taxes for every EU member state (in alphabetical order):
Belgium: 21%
Bulgaria: 20%
Czech Republic: 21%
Denmark: 25%
Germany: 19%
Estonia: 20%
Ireland: 23%
Greece: 24%
Spain: 21%
France: 20%
Croatia: 25%
Italy: 22%
Cyprus: 19%
Latvia: 21%
Lithuania: 21%
Luxembourg: 17%
Hungary: 27%
Malta: 18%
Netherlands: 21%
Austria: 20%
Poland: 23%
Portugal: 23%
Romania: 19%
Slovenia: 22%
Slovakia: 20%
Finland: 24%
Sweden: 25%
United Kingdom: 20%
The average VAT tax in the EU for products originating in Vietnam is 20%. Therefore, always add at least 20% of the total value to your cost estimates to prepare for EU import duties.
Cosmo Sourcing // Go Straight To The Source!
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If you want to source from Vietnam, contact the Cosmo Sourcing team; we have been helping clients source from Vietnam since 2014. Cosmo Sourcing has the skills and the team to find you the best supplier possible. We are also established in China and are among the only companies that can find suppliers in China and Vietnam. Pick the one you think is best.
Our Vietnam Sourcing services allow you to access new manufacturers that you would not be able to in China and avoid Tariffs. Our services are designed to do everything to take your idea, turn it into a product, and ship it to the final destination. Cosmo can do everything from creating a product spec sheet, validation, sourcing, ordering and evaluating samples, arranging inspections, finding freight forwarders, quality assurance, negotiations, and shipping. We aim to handle every single step of your business in Vietnam for you.
If you start a new business, finding products and suppliers for your products is one of many things you need to handle. Our services are designed to handle every part of your business in China and Vietnam so you can focus on the rest of growing your own business.
We have helped clients from Fortune 500 companies, brick-and-mortar stores, FBA sellers, and brand-new businesses. So don’t hesitate to contact us and let us know how we can help you.