HOW TO EXPORT FROM VIETNAM TO THE EU
The European Union and Vietnam are large trade partners, and EU companies invest nearly €10B in the Vietnamese economy each year. Vietnam is one of the largest exporters of manufactured goods in the EU, and the biggest exports are telephone sets, electronics, textiles/clothing, footwear, coffee, food, and furniture. The EU and Vietnam are actively working on improving their relationship with free trade agreements.
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. 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.
The following are the main statistics about EU-Vietnam trade:
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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.
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The EU exports goods such as high-tech products, aircraft, cars, and industrial machinery to Vietnam.
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Vietnam’s largest exports to the European Union are electronics and textiles.
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EU investors invest between €5-10B a year in Vietnamese manufacturing by opening branches or collaborating with existing Vietnamese manufacturers.
Shipping Costs From Vietnam To The EU
The average cost of shipping from Vietnam to the European Union varies by the mode of shipping, the size of the shipment, 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 to major European ports such as Hamburg and Rotterdam. The following is an average cost breakdown:
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€2,000-3,000 for a dedicated 40′ container.
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€1,000-2,000 for a dedicated 20′ container.
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€500-1,000 for an LCL shipment (mixed with other goods).
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€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. 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 by a lot.
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 a lot 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. In Germany and the Netherlands). Customs clearance in Vietnam is very fast as long as you made a deal with the right supplier. We can help you with that.
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 sell in other areas of the European Union tax-free. If we analyze tariffs before the free trade agreement took place, the following are the averages you can expect:
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0% (tax-free) for electronics // Goods such as laptops, headphones, smartphones, motherboards, and others are tax-free.
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0-3% for furniture // Vietnam’s furniture industry is growing a lot, and the EU is one of the biggest importers. Furniture goods enjoy a very low tax rate.
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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 have to make sure 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 strike a deal with the best suppliers.
Documentation For Importing In The EU
If you want to import Vietnamese goods in the EU, you have to provide detailed documentation regardless of the type of product you’re importing. Most suppliers can work with freight forwarders and help you obtain those documents. The following documents are necessary:
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Supplier invoices.
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Certificate of origin.
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Packaging list.
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Letter of credit/payment terms/bank invoices (that show the value of the merchandise).
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Bill of lading for all ocean freight.
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Airway bill for all air freight.
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Other documents: Licenses might be required for certain 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 in 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) in 2020 to remove 70-100% of all import tariffs in both regions. 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. 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:
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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.
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The EU market will remove almost all taxes on Vietnamese goods within five years (except local VAT taxes).
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The EU market relies a lot on developing countries to import goods such as textiles and electronics.
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The EU is one of the world’s largest importers of electronics. The European market consumes more LCD’s than the US, Canada, and Japan combined.
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The EU is a great export destination for all Vietnamese manufacturers looking to export raw materials and intermediary goods to help to 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’re compliant 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 deals with import authorizations for all textiles being imported in the EU. In certain years, the textile industry in the EU can have restrictions such as quotas on textiles being imported from certain countries. At the time of 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. Vietnam is currently not the subject of any restrictions in regards to wood imports.
Metal Regulations In The EU
The European Union groups steel and aluminum in one category and imposes a surveillance regime for all steel that ends up 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. There is special regulation for aluminum products that originate 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 the importation process for most goods originating in Vietnam. Likewise, European manufacturers will be able to place their products on the Vietnamese market. The following criteria apply:
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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.
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· The product meets requirements set by individual regulators. For example, it meets textile manufacturing standards determined by SIGL.
EUR.1 Certificates Of Origin
A EUR.1 certificate must accompany all shipments in Vietnam and are destined for the European Union. This is a piece of paper that certifies the origin of the product in Vietnam through a declaration of origin. 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, which is accepted in Vietnam when trying to import European items in the country. 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 are compliant with the safety standards of the EU, you will be able to 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 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:
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HS Code Search: https://www.tariffnumber.com/
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Access2Markets EU Calculator: https://trade.ec.europa.eu/access-to-markets/en/home
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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”. You can plug in this HS code in 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 from now. The EU dropped duties for certain exports such as rice. 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 as little as 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 it will also lower tariffs on textiles (t-shirts, sweatshirts, and others). Vietnam agreed to lower tariffs on European pharmaceuticals, cars, and chemicals. Other industries that will benefit 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 with the sole purpose of exporting to the European market, your profits will likely increase due to the lower tariffs. Vietnamese goods are now a special category of goods 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. 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 which totals out to 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 find out 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. Either use the “HS Code Search” tool provided 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” we find the international HS code is 847130. For the examples below, we use different categories of items to estimate import taxes:
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Laptop (HS code 847130 – from Vietnam to Germany): 0% tariff.
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Microphone (HS code 8518100090 – from Vietnam to Germany): 0% tariff.
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Tree (HS code 06022080 – from Vietnam to Germany): 8.30% third-country duty.
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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 that 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 items being exported. The VAT is different in every member state, but it’s 15-20% on average. 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%, and this must be paid 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. 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 (alphabetical order):
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Belgium: 21%
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Bulgaria: 20%
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Czech Republic: 21%
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Denmark: 25%
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Germany: 19%
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Estonia: 20%
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Ireland: 23%
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Greece: 24%
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Spain: 21%
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France: 20%
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Croatia: 25%
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Italy: 22%
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Cyprus: 19%
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Latvia: 21%
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Lithuania: 21%
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Luxembourg: 17%
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Hungary: 27%
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Malta: 18%
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Netherlands: 21%
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Austria: 20%
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Poland: 23%
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Portugal: 23%
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Romania: 19%
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Slovenia: 22%
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Slovakia: 20%
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Finland: 24%
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Sweden: 25%
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United Kingdom: 20%
The average VAT tax in the EU for products originating in Vietnam is 20%. Always add at least 20% of the total value to your cost estimates to be prepared for import duties in the EU.