Legal News
New regulations on processing goods for foreign merchants


The Government’s Decree No. 69/2018/ND-CP stipulates that Vietnamese traders are allowed to process legal goods for foreign merchants, excluding the commodities banned or temporarily suspended from exports and imports.

As for goods on the list of conditional business lines, only the traders who fully meet the statutory conditions in producing and trading the listed product are eligible to process for exports overseas.
As for the goods imported in the form of designation of traders under the management of the State Bank of Vietnam, the processing of commodities will be implemented in accordance with the regulations of the State Bank of Viet Nam.

As for the goods exported or imported under permits, traders can only sign the processing contracts for foreign traders after they get licenses from the Ministry of Industry and Trade.

The processing contracts must be made in writing or in other forms of equivalent legal value as stipulated by the Commercial Law, and must at least comprise the following provisions:

1- Names and addresses of the signatories to the contract and the direct processing party; 2- Names and quantity of outsourced products; 3- Outsourcing prices; 4- Payment term and mode; 5- The list, quantity and value of the imported materials, auxiliary materials and supplies, as well as the raw materials, auxiliary materials and materials domestically produced (if any) for processing; norms on the use of raw materials, auxiliary materials and supplies; norms on the consumption and waste of materials in processing; 6- List and value of the machinery and equipment leased, lent or donated for processing (if any); 7- Measures to deal with waste materials, wastes, and defective products, and the principles of handling the redundant borrowed machinery, equipment, surplus raw materials, auxiliary materials and supplies after the expiry of the processing contract; 8- Place and time of delivery; 9- Trademarks and appellations of origin; 10- Validity of the contract.

The decree clearly stipulates that the processing merchants are exempt from import and export tariffs pursuant to the provisions of the tax law on goods temporarily imported according to the norms and waste rates for the performance of processing contracts; and are entitled to hire other traders to conduct the processing. They also have to pay import and export tariffs for the raw materials, auxiliary materials and supplies purchased inside the country, while abiding by the provisions of Vietnamese laws on processing activities forexports, imports and domestic manufacture of goods, as well as the terms of the signed processing contracts.

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