Increasing openness to trade
Vietnam’s trade has almost quadrupled over the last decade. The country has an extensive network of trade agreements with 15 signed Free Trade Agreements (FTAs), including the UK-Vietnam FTA which came into effect in January 2021.
Top five UK goods exported to Vietnam, in the four quarters to the end of Q2 2022
| Goods | Value (£million) |
|---|---|
| Pulp & waste paper | |
| Medicinal & pharmaceutical products | |
| Beverages | |
| Scientific instruments (capital) | |
| Mechanical power generators (intermediate) |
Source:
ONS Trade in goods: country-by-commodity exports
Last updated: November 2022
Download the latest trade and investment factsheet for Vietnam.
Total import value (into the UK from Vietnam) and export value (from the UK into Vietnam) over time
| Year | Imports (£billion) | Exports (£billion) | Total trade (£billion) |
|---|---|---|---|
| 2016 | 4.1 | 0.7 | 4.8 |
| 2017 | 4.5 | 0.8 | 5.3 |
| 2018 | 4.7 | 1.0 | 5.7 |
| 2019 | 4.9 | 1.0 | 5.8 |
| 2020 | 4.1 | 0.9 | 5.0 |
| 2021 | 4.5 | 0.8 | 5.4 |
Source:
ONS UK total trade: all countries, seasonally adjusted
Last updated: October 2022
Total trade is the sum of all exports and imports over the same time period.
Download the latest trade and investment factsheet for Vietnam.
Vietnam: at a glance
Economic growth
2.6%
Actual figure (IMF, 2021)
The UK is 7.4% (IMF, 2021, projected figure)
GDP per capita
$3,514
Actual figure (IMF, 2020)
The UK is $41,127 (IMF, 2020, actual figure)
Currency
Dong
Business language
Vietnamese
You are likely to need a translator
Time zone
GMT +7
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Opportunities for exporters
There are growing opportunities for UK companies in Vietnam, across a range of sectors. Our trade advisers in Vietnam have identified particular opportunities in the sectors listed below.
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Education is a national priority for Vietnam. Its young population are keen to access the benefits of education, and this has opened up opportunities for UK companies with expertise in this sector. Reform and modernisation are supported by investment from the government, international donors and the private sector.
Growing demand for English language training
There is growing demand in Vietnam to learn English in order to access higher-paid jobs, and a growing ability to afford training due to continued economic growth. The sector is receiving substantial investment and there is strong political will to upskill the labour force to support the country’s development ambitions.
Growing demand for higher education and teacher training
There is growing demand for quality higher education and Vietnam is open to international education, joint degree programmes, and transnational education partnerships. Due to a shortage of teachers and the Vietnamese government’s reform of the education system and curriculum, there are ongoing opportunities for UK companies delivering high-quality teacher training.
Growing demand for technical training and professional qualifications
Technical and vocational training is central to Vietnam’s development plans, to meet the needs of an evolving labour market. There is demand particularly in IT, science, technology, engineering and mathematics (STEM) and education technology.
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Vietnam’s energy market is currently dominated by coal and hydroelectricity, but it is now transitioning towards renewable energy. This is creating excellent opportunities for UK businesses specialising in renewable energy.
Ambitious energy transition strategy
With electricity demand projected to continue to rise rapidly, there is increasing need in Vietnam for policy and regulation support, technology, equipment and capacity-building for the renewable energy sector. This is creating significant opportunities for UK suppliers.
Plentiful natural resources for renewable energy
Vietnam’s significant geographical advantages include high wind speeds off the south coast, and high solar irradiance. The solar power sector is one of the fastest-growing in the region, and the offshore wind sector is similarly set to grow rapidly. This will create exciting opportunities for UK firms.
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Vietnam has an ambitious programme of infrastructure development, which includes new urban railways and an international airport. The country spent 5.7% of its GDP on infrastructure in 2017 (Asian Development Bank, 2017), the highest figure in South East Asia.
An expanding public transport network
Plans to develop metro systems in Hanoi and Ho Chi Minh City are in the early stages. Initial steps towards building a high-speed North-South railway are expected in 2021. This will create opportunities for UK businesses who have products and services in the railway supply chain.
Opportunities to participate in regional partnerships
Many infrastructure projects in Vietnam are supported by development assistance funding from other countries or the Asian Development Bank. There are opportunities for UK businesses to participate and play a role in the supply chain for these large projects via partnerships with third countries.
Expansion of opportunities in aviation
Vietnam’s expansion of existing airlines and the entry of new operators offers possibilities for UK companies to provide equipment, training and other aviation services. Hanoi to Ho Chi Minh City remains one of the busiest domestic routes worldwide.
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With an increasing population, resilient GDP growth and a demand for improved healthcare quality, Vietnam is a promising market for UK businesses in the healthcare sector.
Expansion and diversification of the healthcare sector
Vietnam’s healthcare spending continues to grow as the country aims to increase the skills of its healthcare workforce and improves its capability to deliver quality healthcare. Opportunities for UK companies are growing in health education and training, clinical services and digital health.
Demand for imported pharmaceutical products
Vietnam imports 60% of its pharmaceutical end products and 90% of its active pharmaceutical ingredients (Vietnam Foreign Investment Agency, 2019), creating significant opportunities for UK exporters.
Major developments in healthcare infrastructure
Vietnam is investing in healthcare infrastructure projects, including the construction of more hospitals. Low corporate income tax and tax exemptions are among the incentives offered to overseas healthcare investors.
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Vietnam offers considerable opportunities for UK technology companies as one of the fastest-growing digital economies in South East Asia.
Growing market for Artificial Intelligence (AI), cyber security and fintech
The government considers AI a key technology for development, with potential to add hundreds of billions of US dollars to Vietnam’s GDP. The cyber security market is growing, following the expansion of the retail market and digital transactions, which pose increasing cyber threats. With a booming finance sector, banks are increasing spending on technology.
Demand for smart technologies
Vietnam’s growing middle class offers opportunities for UK companies in connectivity technology smart electronic devices and smart cities technology. Smart manufacturing is another sector promising exciting growth as the country’s manufacturing base shifts towards higher tech solutions.
Potential for modernisation of agriculture
With a significant proportion of the population in Vietnam still employed in agriculture, there are opportunities for UK companies to offer expertise in agri-technology and modernisation of agricultural practices.
Check for trade barriers
Trade barriers, such as tariffs or taxes, can raise costs, cause delays, or even stop you from exporting. Check for any issues that may impact your business when exporting.
Check duties and customs
Find information on how to export goods from the UK. View the duties, rules, restrictions, and the documents you need for your products.
Doing business in Vietnam
Preparing to export
Tax system
Most companies in Vietnam are subject to 6 major taxes:
- Business license tax
- Corporate income tax
- Value-added tax
- Special sales tax
- Foreign contractor tax
- Custom duties
Corporate income tax
The UK and Vietnam have signed a double taxation agreement, meaning the same income is not taxed twice.
Value-added tax (VAT)
If you are registered for UK VAT, it may be possible to zero-rate the goods you export to Vietnam, provided certain conditions are met.
VAT applies on the value of imported goods, and importers pay it at the same time as they pay import duties. Different rates of VAT are applied to different goods and services, but generally the rate is up to 10%.
A Special Sales Tax (SST) applies to the production and import of 11 products considered as luxurious or non-essential.
Custom duties
The UK-Vietnam Free Trade Agreement came into effect from 1st January 2020. 65% of the tariff lines of UK exports to Vietnam have been eliminated, increasing to 99% after 6 years.
Regulations
You will need to make sure you get the technical licenses you need for your products before you export. The licensing process can take some time.
The Information Centre of the Directorate for Standards and Quality (ISMQ) is responsible for Vietnam’s standards system.
Payment terms
Vietnamese companies can prohibit the use of letters of credit because of the cost and collateral requirements from banks.
Payment terms of 60, 90 or 120 days are common.
Trade barriers
Check for any reported barriers to trading with Vietnam.
Report any trade barriers that are affecting your business so we can help fix them.
Operating in Vietnam
Business culture
It’s important to develop personal relationships to do business in Vietnam. You should have a local representative for direct exports.
There are also some cultural differences to be aware of. For example, smiles and nods do not mean ‘yes’ to your proposal. You should also present business cards with both hands and use the correct form of address for people. For example, ‘Mr Nguyen Nam Thuy’ would be ‘Mr Thuy.’
Intellectual property
Intellectual property (IP) rights are territorial. Rights granted in the UK do not provide protection elsewhere. You should consider getting IP protection abroad if you want to trade overseas or sell to overseas customers via the internet.
The Intellectual Property Office’s International IP Service provides practical information to help you protect, manage and enforce your IP in Vietnam and in ASEAN.
British Businesses looking for IP support can also contact the South East Asia IP Attaché team.
Challenges
The State Bank of Vietnam (SBV) imposes strict controls on foreign exchange transactions.
You must get foreign currency convertibility rights from SBV as early as possible. As these are normally part of the investment licence, they are only given to companies operating in specific industries. Convertibility rights do not guarantee the availability of foreign exchange.
Corruption
Vietnam’s score in Transparency International’s 2020 Corruption Perceptions Index was 104th out of 180 countries and territories. Corruption is particularly prevalent in infrastructure projects, customs procedures and land rights.
Anyone engaged in business in Vietnam may encounter, and at the very least should prepare for, the challenges of corruption in one form or another. Practices such as facilitation payments, bribes and giving and receiving expensive gifts in order to develop business relationships are still common. There is also very little judicial independence in Vietnam and corruption remains a problem in the court system.
Next steps
Get ready to do business abroad
Step-by-step lessons to accelerate your exporting ability.
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