Vietnam: Are FDI enterprises allowed to trade in goods transshipment?

FDI enterprises in Vietnam must conduct investment and business activities in accordance with Vietnamese law. So, according to current regulations, are FDI enterprises allowed to trade in goods transshipment?

What is Transshipment of Goods?

Transshipment of goods is understood as the purchase of goods from a country or territory for sale to a country/territory outside the territory of Vietnam but without carrying out import procedures into Vietnam and without completing export procedures out of Vietnam. Vietnam (according to Clause 1, Article 30 of the Commercial Law No. 36/2005/QH11).

Accordingly, border-gate transfer of goods is carried out on the basis of 02 separate contracts, which are purchase contracts and sales contracts signed by enterprises with foreign traders. The purchase contract can be signed before/after the sales contract (Clause 3, Article 18 of Decree 68/2019).

Pursuant to Clause 2, Article 30 of the Commercial Law, the border-gate transfer of goods shall be carried out in one of the following forms:

1- Transporting goods directly from the exporting country to the importing country without going through Vietnam’s border gates;

2- Transporting goods from the exporting country to the importing country through Vietnam’s border gate but without carrying out import procedures into Vietnam and without completing export procedures out of Vietnam;

3- Transporting goods from the exporting country to the importing country through Vietnam’s border gates and bringing them to bonded warehouses, goods transshipment areas at Vietnamese ports but without carrying out import procedures into Vietnam and not carry out export procedures out of Vietnam.

Note: Transshipment business goods must be brought into and out of Vietnam at the same border gate area, subject to inspection and supervision by customs authorities from the time they are brought into Vietnam until they are taken out. Vietnam.

Are FDI enterprises allowed to trade in goods transshipment?

FDI enterprises, also known as enterprises with foreign direct investment capital contributed capital by foreign investors or established as members or shareholders.

It can be seen that an FDI enterprise is a foreign-invested economic organization according to the provisions of Clause 22, Article 3 of the Law on Investment 2020.

Regarding the right to trade in border-gate transfer of goods, Clauses 1 and 2, Article 18 of Decree 69/2018 stipulate as follows:

1. Vietnamese traders are entitled to trade in goods transshipment according to the following provisions:

a) For goods banned from export or import; goods temporarily suspended from export or import; goods not yet allowed to be circulated or used in Vietnam; goods subject to management by means of export quotas, import quotas, tariff quotas, export and import permits, except for automatic export licenses, automatic import permits, commercial trade Individuals must be granted a license to trade in border-gate transfer by the Ministry of Industry and Trade. In case of border-gate transfer business in the form of goods being transported directly from the exporting country to the importing country, without going through Vietnam’s border-gate, the trader is not required to have a border-gate trading license.

b) In case the goods are not specified at Point a, Clause 1 of this Article, the trader is not required to have a border-gate trading license issued by the Ministry of Industry and Trade.

2. Foreign-invested economic organizations are not allowed to conduct business of border-gate transfer of goods. […]

Thus, FDI enterprises are not allowed to carry out the business of transshipment of goods.

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