Vietnam is among the world’s biggest coffee exporters. In 2022, Vietnam exported coffee to the tune of 1.78 million tons second in volume only to Brazil. This brought the burgeoning Southeast Asian nation either US$3.2 billion or US$4 billion, depending on who you ask. Either way, it’s a huge amount of coffee and there is clearly a huge demand for it.

In this light, there is a huge opportunity in buying and exporting Vietnamese coffee around the world. This can be very profitable but there are a few nuances to the process that foreign firms looking to export coffee from Vietnam should be mindful of. 

This article outlines the key regulations, processes, and means of exporting coffee from Vietnam to other parts of the world.

Using a local trading company

Firms that want a quick and easy solution to export coffee from Vietnam to other parts of the world may find engaging a local trading company the most effective way forward. This is a simple transaction whereby the local trading company takes care of the logistics from the farm gate or the factory floor to one of Vietnam’s many ports. This does, however, give firms little control over their exports while they are in Vietnam.

Finding a local trading company

Professional business matchmaking services in Hanoi and Ho Chi Minh City are a dime a dozen. Most consultancies offer these services and can advise on the right local partner to assist in locating the right coffee products for a particular market as well as negotiate terms.

For firms that would like a little more control over their goods before they leave Vietnam, establishing a local presence is always an option too.

Establishing a trading company in Vietnam

Trading companies in Vietnam with foreign ownership are generally established as a limited liability company either as a wholly owned foreign enterprise or a joint venture with a Vietnamese partner.

Wholly foreign-owned trading companies in Vietnam

Establishing a wholly foreign-owned trading company in Vietnam offers foreign investors complete control over their business’s operations. However, this approach typically involves higher costs and can be a more time-consuming process.

Specifically, foreign entrepreneurs interested in setting up a wholly foreign-owned company must apply for an Investment Registration Certificate (IRC), a step not required when partnering with a local entity.

The purpose of the IRC is essentially to ensure that foreign companies do not engage in business activities that fall under restricted or prohibited categories. The criteria for granting an IRC are stipulated in the Law on Investment, which also states that IRCs should ideally be issued within a timeframe ranging from 5 to 15 days. In practice, however, the processing time often extends to around 30 to 45 days.

Joint venture trading companies in Vietnam

When foreign entrepreneurs opt to collaborate with a local partner, they are not required to obtain an Investment Registration Certificate. Instead, the Vietnamese partner establishes the company, and the foreign investor buys a share. This approach can significantly reduce both the initial setup expenses and the time needed to establish a trading company in Vietnam.

However, it’s important to note that joint ventures come with certain inherent risks. Differences in work ethics and management styles can potentially lead to workplace conflicts, especially in cross-cultural contexts. For instance, while it’s customary in Vietnam to impose financial penalties on employees for being late or using their phones during working hours, such practices are usually considered unacceptable in Western countries. Recognizing these subtle nuances in cross-cultural communication within a joint venture environment can be pivotal to the success of a business.

For a step-by-step technical guide see: How to Form a Company in Vietnam: Technical Guide 2024

Transporting goods

Once you have established your trading company in Vietnam the next step is shipping your goods. If you’re using a local trading company, they should be able to advise you on the best way to ship your goods. If you have set up your own trading company, however, then there are a number of means by which you can ship your coffee products out of Vietnam.

Airports

Airfreight is popular for high-value and perishable goods. Fresh coffee beans or high-value coffee may be most efficiently exported via air freight. Most international logistics companies service Vietnam–DHL and FedEx, for example. These companies usually fly to the big cities, Hanoi and Ho Chi Minh City, however, they may also sometimes fly to regional airports if demand warrants it and facilities can accommodate international air freight.

Key airports in Vietnam for international freight

IATA – International Air Transport Association, ICAO – International Civil Aviation Organization

Seaports

For non-perishable items, or bulky low-value items sea freight is likely the most effective option for shipping goods out of Vietnam. Instant coffee or pre-packaged coffee for example. 

Vietnam has approximately 36 ports scattered along its coastline. However, Hai Phong and Ba Ria-Vung Tau are by far the largest and can accommodate the biggest volume of goods. These service key manufacturing hubs in northern Vietnam and southern Vietnam respectively.

Key seaports in Vietnam

Port fees

Seaport fees are not standardised in Vietnam. Instead, each port charges its own fees.

Land crossings

Firms that are exporting coffee from Vietnam to other parts of Asia could also use land borders. This is common for firms where Vietnam is a part of a longer supply chain. For example, beans grown in Cambodia might be shipped to Vietnam for processing and then back to the end consumers. There are a number of land border crossings connecting Vietnam to its neighbours scattered along its northern and western borders.

Key land border crossings in Vietnam

Dealing with customs

Once goods have been shipped to one of Vietnam’s airports, seaports, or land border crossings they will be subject to a customs inspection before they can leave the country.

Procedure

Firms exporting coffee from Vietnam must go through a relatively simple process.

1. They must first complete an electronic customs declaration (form HQ/2015/XK). 
2. Submit the above form to the customs office online.
3. This is then either given a green light and the export can proceed. If it receives a yellow light further documentation will be required. If it receives a red light, additional documentation will be required as well as a physical inspection.

For the purposes of exporting coffee, it should be fairly simple. It would be unusual to receive a yellow or red light. If this were the case a thorough review of the the customs declaration would be a good first place to start.

Key HS codes for exporting coffee from Vietnam

Export taxes

Vietnam does not apply export taxes or tariffs to coffee. However, firms should keep in mind that the receiving country may apply import tariffs. In this context, firms should also be mindful that Vietnam has a range of free trade agreements that may limit their exposure to international tariffs.

Coffee tariffs in Vietnam’s coffee trade, 2023

Source: World Trade Organisation 

Post-customs

After clearing customs, goods for export can travel freely to their intended destination. 

What’s next?

There are a broad range of tax agents, lawyers, market research firms, human resource professionals, and all-in-one consultancies in Vietnam that can assist entrepreneurs in exporting goods from Vietnam. Let us connect you with an expert. 

For up-to-date information on what is happening in Vietnam’s import and export sector at any given time, exporters should make sure to subscribe to the-shiv.

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