Vietnam frequently ranks as the second biggest coffee producer in the world, even sometimes first. However, whereas in most Western countries Arabica is the coffee of choice, Vietnam specializes in Robusta. As more Western coffee chains have emerged, demand for Arabica has grown. In this context, coffee producers worldwide may find a growing market in Vietnam.

However, importing coffee into Vietnam for foreign firms can be tricky. Not only are there a number of technical and legal requirements that need to be met, but a myriad of free trade agreements has made navigating tariffs and trade restrictions complex.

Understanding the nuances of importing coffee into Vietnam, including how to find a distributor, establish a trading company, and customs procedures before attempting to access Vietnam’s 100 million-strong consumer market can make the difference between a foreign firm’s success or failure.

Using a local distributor in Vietnam

Firms that want a quick and easy solution to import coffee into Vietnam may find engaging a local trading company the most effective way forward. This is a simple transaction whereby goods are shipped to the local trading company which takes care of the logistics from the port of arrival onwards. This does, however, give firms little control over their goods after they arrive in Vietnam.

Finding a distributor

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 distributor for your product as well as negotiate terms.

For firms that would like a little more control over their goods after they arrive in Vietnam, establishing a local presence is always an option.

Establishing a trading company

Establishing a trading company in Vietnam gives a firm the power to both import and export goods as well as distribute those goods within Vietnam. 

Note that, a trading company is generally formed the same way as any other foreign-invested enterprise. The ‘trading company’ designation is simply a means of notifying the authorities as to the nature of the business conducted. In this light, an existing firm, a cafe, for example, can also apply to have ‘trading company’ added to the list of business lines for their existing business.

Wholly foreign-owned trading companies in Vietnam

A wholly foreign-owned trading company in Vietnam allows a foreign investor complete control over the company’s operations. It is, however, generally more costly and time-consuming.

Specifically, before they can apply to register a business, foreign entrepreneurs who want to set up a wholly foreign-owned company will need to first apply for an Investment Registration Certificate (IRC) which they do not have to do with a local partner.

An IRC is basically required to ensure that foreign firms are not engaging in business in restricted or forbidden business lines. The conditions for approving an IRC are outlined in the Law on Investment which also states that IRCs should be issued in between 5 to 15 days. In reality, however, it is usually around 30 to 45 days.

Joint venture trading companies in Vietnam

With a local partner foreign business persons do not need to file for an Investment Registration Certificate, but rather the Vietnamese partner establishes the company and the foreign investor buys a share. In this sense, working with a local business partner can considerably reduce setup costs and application processing times. 

Joint ventures, however, can be risky. A mismatch in work ethics and management styles can cause conflict in the workplace, particularly in cross-cultural settings. For example, whereas in Vietnam it is common to financially penalise staff for arriving late or for using their phone during work hours, in Western countries, this would be unacceptable. Understanding these little nuances of cross-cultural communication, in a joint venture environment, may be crucial to a business’s success.

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

Packaging and Labelling

Vietnam has a number of packaging and labelling requirements. These are outlined in Decree 43/2017/ND-CP with amendments to said decree made in Decree 111/2021/ND-CP. Labels for products sold in Vietnam must include:

• The name of the goods;
• The name and address of the organisation or individual responsible for the goods; and
• The origin of goods.

There are also additional labelling requirements for different products. For coffee products, importers must also include on the product labelling the:

• quantity,
• date of manufacture,
• expiry date,
• ingredients and ingredient quantities,
• warnings (if necessary),
• usage instructions, and
• storage instructions.

On a practical level, this often means a sticky label in Vietnamese applied over the information printed on the original packaging.

Shipping to Vietnam

Once you have established your trading company in Vietnam the next step is shipping your goods. If you’re using a local distributor, they will provide you with the delivery details and 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 get your goods into Vietnam.

Airports

Airfreight is popular for high-value and perishable goods. Fresh coffee beans or high-value coffee may be most efficiently delivered 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 to Vietnam. Instant coffee or pre-packaged coffee for example. This is particularly true 

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 shipping coffee to Vietnam from within 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. 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

Customs procedures on arrival in Vietnam

When goods arrive in Vietnam, as they must anywhere else in the world, they are subject to customs inspection. Customs procedures in Vietnam are governed by the Law on Customs (54/2014/QH13).

Paperwork

Firms importing goods into Vietnam need to complete and submit a dossier of documents before the importation can be approved. This can in most cases be submitted online. It will include information on what the goods are, where they are from, their value, and a number of other details. The Vietnam National Trade Repository offers a detailed description of each item that is required.

Tariffs

In recent years, Vietnam has signed on to a number of free trade agreements that have reduced barriers and tariffs almost in their entirety for countries that are party to these agreements. 

Key HS codes for importing coffee into Vietnam

Coffee tariffs in Vietnam 2023

Source: World Trade Organisation 

Import taxes in Vietnam

There are no specific import taxes in Vietnam, however, goods imported into the country may be subject to Vietnam’s Value-added Tax (VAT).

Value-added tax (VAT)

The specifics of the VAT are outlined in Law No. 13/2008/QH12. Broadly, this is a consumption-based tax on goods and services in Vietnam. It is generally charged at the point of sale, with regard to imports this is at the port of entry. VAT is generally charged at 10 percent of the sale price, though for select specialty items, it is only 5 percent, and some items are also exempt.

Imported coffee attracts the full VAT rate of 10 percent, however, if the coffee is resold or used in a cafe or coffee shop, the purchaser in Vietnam may be able to claim the VAT back. For accurate advice, firms looking to import coffee into Vietnam should contact a Vietnamese tax professional.

For support managing your tax in Vietnam see: Accountants in Vietnam: A Directory 

Post-customs

After clearing customs, importers are free to distribute their goods or store them as they see fit. Logistics firms have built up vast networks of warehouses in recent years that can be an economical means of storing imported goods. Alternatively, depending on the size of the shipment, firms may find it easier to ship directly to their retail outlets.

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 importing goods into 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, importers should make sure to subscribe to the-shiv.

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