Currently, foreign-invested enterprises importing materials are experiencing a strong development. So how can we understand what a foreign-invested enterprise importing materials is and the related issues surrounding foreign-invested enterprises importing materials? Let's explore with NPLaw the current legal regulations related to this issue below.
I. The current situation of foreign-invested enterprises importing materials
In fact, currently, foreign-invested enterprises importing materials are experiencing strong development. The importation of materials from abroad helps businesses access and utilize high-quality materials, meet production requirements, and enhance their competitive capacity in the market.
There are some materials that foreign enterprises often import, such as materials for producing industrial goods, food ingredients, medical and pharmaceutical materials, materials for information technology and telecommunications, energy and fuel materials, and input materials for various other industries.
However, the import of materials also poses some challenges and issues that need to be addressed. One of the main issues is that enterprises must ensure a stable and continuous supply of materials from abroad. At the same time, enterprises must also ensure the quality and safety of imported materials, while controlling costs and analyzing market risks.
Additionally, the import of materials also affects the economic efficiency of the country. Dependence on imported materials can increase foreign currency income and strengthen trade relations with other countries, but it also poses risks to the economy in case of price changes or supply disruptions.
Therefore, to ensure the operational status of production and business activities of foreign-invested enterprises importing materials, strict management is needed, along with the establishment of supportive policies to encourage enterprises to develop domestic material supply sources, while also enhancing self-production capacity and diversifying foreign supply sources. At the same time, enterprises must also ensure the quality and safety of imported materials, while controlling costs and analyzing market risks.
II. Legal regulations related to foreign-invested enterprises importing materials
1. What is a foreign-invested enterprise importing materials?
Foreign-invested enterprises importing materials are the type of enterprises where the ownership capital and control rights of foreign investors are predominant. This means that foreign investors have invested some capital into the enterprise to own and control it.
Imported materials can be either primary production materials or depend on the industry in which the enterprise operates. These materials can be raw materials, processed materials, or materials for producing finished products.
This enterprise must carry out import activities to bring materials from abroad into the country for use in the production process or to increase its product value. This includes purchasing materials from foreign suppliers, carrying out customs procedures, and paying the costs associated with the import.
Some benefits for foreign-invested enterprises importing materials include access to international material supplies, enhanced competitiveness, improved product quality, and expanded consumption markets. However, businesses also face risks such as price fluctuations, international mixed risks, and restrictions on material imports.
Through that, foreign-invested enterprises importing materials contribute to the national economic development process and create opportunities for international economic cooperation.
2. Dossiers for foreign-invested enterprises to import materials
For foreign-invested enterprises to import materials, the following dossiers need to be prepared:
- Investment license: The enterprise must apply for an investment license at the investment agency of the country or region where it is headquartered. The dossier must include the investment registration, the investment adjustment document (if any), and notarized copies of the enterprise establishment documents (business license, notarized company registration, documents on capital contribution, and business operations).
- Export and import registration certificate: It is necessary to apply for an export and import registration certificate from the commerce agency. The dossiers include a proposal for the export and import plan, contracts for the purchase of materials, and documents related to the import of materials.
- Material purchase contract: A material purchase contract between the enterprise and the foreign supplier is required. The contract must ensure conditions regarding quantity, quality, price, delivery time, and other legal terms.
- Dossiers related to customs clearance and import-export control: It is necessary to prepare dossiers related to the customs clearance procedures for goods and import-export control at management agencies both abroad and domestically. This dossier includes customs clearance slips, invoices, documents related to customs management, taxes, and other legal regulations.
- Product quality certificate: A product quality certificate is required for imported products from the relevant agencies of the exporting country. The dossier must clearly state information about product quality, technical standards, classification, shelf life, and related legal requirements.
- Other dossiers: In addition to the above dossiers, it may also be necessary to prepare other dossiers, such as papers relating to finance, taxes, environmental protection, and specific texts related to the industry or the country providing the materials.
3. Procedures for foreign-invested enterprises to import materials
For foreign-invested enterprises to import materials into Vietnam, the following procedures must be followed:
- Investment registration: Enterprises need to register their investment with management agencies such as the Ministry of Planning and Investment or the Department of Planning and Investment where the enterprise's headquarters are located.
- Company establishment: After the investment registration is approved, foreign enterprises need to establish a company or branch in Vietnam. The procedure for establishing a company includes steps such as business registration, submitting the investment license, setting up charter capital, and tax registration.
- Import registration: After establishing the company, the enterprise needs to register the import of materials with management agencies such as the Ministry of Industry and Commerce or the Trade Administration. Import registration includes completing and submitting related documents such as goods purchase contracts, information about the origin of goods, and other documents as required by regulations.
- Tax and fee payment: Enterprises need to comply with regulations regarding tax and fee payment related to material imports. The types of taxes and fees may include VAT, import tax, goods reception fees, and other fees related to the import procedures.
- Apply for food safety certification (if necessary): For food ingredients, enterprises need to apply for food safety certification from management agencies such as the Food Safety Department.
- Compliance with customs regulations: enterprises need to comply with customs regulations during the import process, including customs declaration, goods inspection, and payment of related customs fees.
III. Frequently asked questions related to foreign-invested enterprises importing materials
1. Can a foreign-invested enterprise import materials under code A12?
Pursuant to Section II of the of the table containing different types of code and usage instructions issued with Decision 1357/QĐ-TCHQ in 2021, the A12 code is specified as follows:
Accordingly, Code A12 is the import code for production business and is used in cases where Vietnamese enterprises import materials, supplies, machinery, and equipment for domestic production (including imported goods for investment projects):
- Import from abroad;
- Import from the non-tariff zone, Export Processing Enterprises.
- On-the-spot import (except for GC, Manufacturing Export, Export Processing Enterprises, and enterprises in the non-tariff zone);
- Importing goods through financial leasing.
Based on the above regulations, foreign-invested enterprises are allowed to import materials, supplies, machinery, and equipment for domestic production using the A12 model.
2. Can a foreign-invested enterprise import materials in the form of gold bars?
Pursuant to Clause 2 of Article 3 of Decree No. 24/2012/ND-CP, gold bars are defined as gold stamped into bars, containing information about weight, quality, and the marking of enterprises and credit institutions permitted by the Vietnam State Bank (hereinafter referred to as the State Bank) to produce, or gold bars produced by the State Bank in each period.
Pursuant to Article 3 of Decree 24/2012/ND-CP, raw gold is defined as gold in the form of blocks, bars, grains, pieces, and other types of gold.
Pursuant to Clause 3 of Article 4 of Decree 24/2012/ND-CP, it is regulated that the State has a monopoly on the production of gold bars, the export of raw gold, and the import of raw gold for the production of gold bars. This is of significant importance in the operation and management of the gold supply, aiming to ensure the stability of the gold market and comply with the national monetary goals and policies.
This monopoly enables the State to control and stabilize the gold market while also protecting national interests and consumers. Tight management of raw gold imports and exports is an important part of maintaining stability and protecting the national economy.
In addition, according to Decision 1623/QĐ-NHNN in 2012, the State Bank assigned the one-member limited liability Saigon Jewelry Company—SJC (abbreviated as SJC)—to process gold bars in accordance with the regulations in this decision.
From that, it can be concluded that only the State has the exclusive right to import raw gold for the production of gold bars, and SJC Company is assigned the responsibility of processing gold bars according to State regulations.
Therefore, foreign-invested enterprises are not allowed to import materials in the form of gold bars.
3. What types of materials are foreign-invested enterprises not allowed to import?
Pursuant to Decree 69/2018/ND-CP and related legal documents, there are certain types of materials that foreign-invested enterprises are not allowed to import in some countries. These types of materials are often related to the fields of national defense, security, healthcare, the environment, etc. Some specific examples may include:
Weapons, military materials, and sensitive military technologies: These items are often restricted or banned from import to ensure national security.
- Toxic substances and environmental pollutants: Some countries have strict regulations on the importation of toxic substances and environmental pollutants to protect the health of the people and the environment.
- Tobacco and related products: Some countries have restrictions or bans on the importation of tobacco and related products to minimize the negative impact of tobacco on public health.
- Medicines and medical supplies: Some countries have strict regulations on the importation of medicines and medical supplies to ensure quality and health safety for users.
- Products of animal and plant origin that are threatened: Some countries have regulations for the protection of threatened wildlife and ornamental plants and restrict or prohibit the import of products from these species.
Note: These are just some common examples, and regulations may vary depending on the country and specific business sector. Businesses should refer to the regulations and laws of the country they wish to invest in to know exactly which types of materials are prohibited from import.
4. Do foreign-invested enterprises importing materials coded A12 and A41 for production need to self-declare the products?
- For material code A12:
Pursuant to the regulations in Section II of the table containing different types of code and usage instructions issued together with Decision No. 1357/QĐ-TCHQ in 2021.
Accordingly, the A12 type code is a product imported for business, production, specifically:
Used in cases where Vietnamese enterprises import materials, supplies, machinery, and equipment for domestic production (including imported goods for investment projects):
1. Import from abroad;
2. Import from the non-tariff zone, Export Processing Enterprises.
3. On-the-spot import (except for GC, Manufacturing Export, Export Processing Enterprises, and enterprises in the non-tariff zone);
4. Importing goods through financial leasing.
Thus, importing under code A12 is for production purposes and not for business; therefore, pursuant to Clause 7, Article 13 of Decree 15/2018/ND-CP, it will be exempt from state inspection on food safety upon import.
In addition, according to Article 13, cases exempt from state inspection of imported food safety (except for cases with food safety warnings) including: Products, materials for production, and imports are only used for the production and processing of export goods or the internal production of organizations and individuals, not for consumption in the domestic market.
Additionally, pursuant to Clause 2, Article 4 of Decree 15/2018/ND-CP, there will be an exemption from self-declaring products: Products, materials for production, and imports used solely for the production and processing of export goods or for the internal production of organizations and individuals that are not consumed in the domestic market are exempt from the self-declaration procedure for products.
- For material code A41:
Pursuant to the regulations in Section II of the table containing different types of code and usage instructions issued together with Decision No. 1357/QĐ-TCHQ in 2021, for type A41, which is a business import product of enterprises exercising the right to import, the specific guidance is as follows:
Used in cases where enterprises have foreign investment (including Export Processing Enterprises), foreign enterprises not present in Vietnam import goods under the import rights to sell directly in Vietnam (not through production).
Accordingly, for the A41 type, since direct sales activities are conducted in Vietnam, it is necessary to carry out the product self-declaration procedure or register the product declaration as per regulations.
IV. Legal consulting services related to foreign-invested enterprises importing materials
Above are all the detailed information that our NPLaw provides to support customers regarding the issue of foreign-invested enterprises importing materials. In case you have any questions related to the above issue or other legal matters, please contact NPLaw immediately for our team to provide direct consultation and guidance.
