Exporting guide to

Vietnam

Overview

Vietnam is one of the world’s fastest growing economies, projected to grow at 6.3 percent in 2023 (World Bank), with growing appetite for UK goods and services. This offers many exciting opportunities for exporters: Vietnam is a market with 100 million consumers, rising middle class and rapid urbanisation. Vietnam continues to broaden its network of international trade agreements, and proactive government reform is helping to open the market to international business.

Trade statistics

£1.1 billion total UK exports to Vietnam for the four quarters to the end of Q2 2023

(Source: ONS UK total trade: all countries, seasonally adjusted
Last updated: October 2023)

63rd largest UK export market

(Source: ONS UK total trade: all countries, seasonally adjusted
Last updated: October 2023)

0.1% of total UK exports for the four quarters to the end of Q2 2023

(Source: ONS UK total trade: all countries, seasonally adjusted
Last updated: October 2023)

Growing demand for UK goods and services

Total trade in goods and services (exports plus imports) between the UK and Vietnam was £6.4 billion, in current prices, in the four quarters to the end of Q3 2022, an increase of 20.5% or £1.1 billion from the four quarters to the end of Q3 2021. Major UK exports to Vietnam include pharmaceuticals, machinery and equipment.

Increasing openness to trade

Vietnam’s trade has almost quadrupled over the last decade. The country's import-export revenue last year was reported at $732 billion, despite numerous difficulties and setbacks, largely caused by international geo-political uncertainties. This has put Viet Nam among some of the most robust economies in the Southeast Asia.

Vietnam has established an extensive network of trade agreements with 15 signed FTAs including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the European Union–Vietnam free trade agreement (EVFTA), the Regional Comprehensive Economic Partnership (RCEP) and the UK-Viet Nam free trade agreement which came into effect in January 2021.

Relevance of UK technology and innovation

Vietnam made ambitious commitments at COP26, pledging to reach net zero by 2050, phase out coal power from the energy mix, and ensure sustainable food security for a rapidly growing population. A young and increasingly tech-literate population are driving innovation across all sectors. This context positions UK expertise in areas including clean growth, tech, and digitalisation as particularly relevant to Vietnam’s growth ambitions.

Top five UK goods exported to Vietnam , in the four quarters to the end of Q3 2023

Goods Value (£ million )
Medicinal & pharmaceutical products 94.2
Pulp & waste paper 73.1
Clothing 53.3
Cars 40.0
Scientific instruments (capital) 30.5

Source: ONS Trade in goods: country-by-commodity exports
Last updated: November 2023
Download the latest trade and investment factsheet for Vietnam.

Vietnam: at a glance

Economic growth

8.0%

Actual figure (IMF, 2022)
The UK is 4.0% (IMF, 2022, actual figure)

GDP per capita

$3,549

Actual figure (IMF, 2020)
The UK is $40,347 (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.

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.

See current trade barriers

See resolved trade barriers

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.

See current duties and customs procedures

Doing business in Vietnam

Preparing to export

Tax system

Most companies in Vietnam are subject to six 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 categories of products (including cigarettes, alcohol, and most vehicles) and six types of services (including casinos, gambling, lotteries, and golf clubs), which are considered luxurious or non-essential.

Custom duties

The UK-Vietnam free trade agreement came into effect from 1 January 2021. 65% of the tariff lines of UK exports to Vietnam have been eliminated, increasing to 99% after six 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.

Intellectual property

As a first step, we advise you to speak to an intellectual property (IP) lawyer if you think you need patent protection when exporting. With the implementation of the UKVFTA provisions regarding IPR, Vietnam has made a commitment to protecting intellectual property. The National Office of Intellectual Property (NOIP) is the authority responsible for the registration of intellectual property.

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

Conducting business in Vietnam

In late 2014, the National Assembly passed the Law on Investment (LOI) and Law on Enterprises (LOE), both of which came into effect on 1 July 2015. These laws govern the establishment and operation of companies in Viet Nam.

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.’

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 2022 Corruption Perceptions Index was 77th out of 180 countries and territories. Vietnamese government has shown remarkable effort to deal with corruption recently, although corruption is still a considerable issue particularly in infrastructure projects, customs procedures and land rights.

Although Vietnam has moved up the Transparency Index, anyone engaged in business in Vietnam may encounter the challenges of corruption in one form or another. Practices such as facilitation payments and giving and receiving expensive gifts in order to develop business relationships were common and persist in some areas. There is also little judicial independence in Vietnam and corruption remains a problem in the court system.

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