Tax
A value added tax (VAT) applies to goods and services for use in production, business or consumption in Vietnam. The rates are 5 percent (for a number of encouraged essential goods and services) and 10 percent (applicable to most goods and services). Exports are zero rated.
Foreign invested projects are exempt from VAT for machinery, equipment or specialised means of transportation and construction materials that are not yet able to be produced domestically.
Logistics
Vietnam has three international airports. Connecting flights are available from New Zealand to Ho Chi Minh City via Sydney, Bangkok and Singapore.
There is one shipping company providing a direct freight service between Vietnam and New Zealand. Other sea-freight route options from New Zealand to Vietnam are transhipment in Singapore or Hong Kong.
Opportunities
- Vietnam is part of the ASEAN (Association of Southeast Asian Nations), Australia and New Zealand Free Trade Agreement, which came into force on 1 January 2010. The agreement will eliminate tariffs between member nations.
- The New Zealand-Vietnam Action Plan (2010-2013) was also signed in 2010, giving effect to a comprehensive partnership across a wide range of sectors including trade, science and technology, education, defence, policing and customs cooperation.
- There is a growing middle class in the cities with an appetite for Western goods and services.
- There are good opportunities for New Zealand exports to Vietnam in: infrastructure development, aviation, education, food and beverages, forestry and food processing.
Challenges
- There are strict controls on foreign exchange.
- There is uncertainty surrounding regulations and commercial law – both are a work in progress. Expect high levels of bureaucracy.
- Protection of intellectual property is a challenge
Cultural and business tips
- Entry is not possible into Vietnam without a visa. You should get a letter of invitation from your Vietnamese business partners.
- Remember the Asian concept of "face". You should practice giving "face" (for example praise,) and saving "face" (don’t be directly confrontational in a group).
- Vietnamese business people are becoming increasingly accustomed to dealing with Western business partners and, once trust has been established, are willing to speak openly.
