Importing Used Machinery into Vietnam
Latest Update: January 13, 2024
🤔 Is it possible to import used machinery into Vietnam?
☝️ Yes, but - generally speaking - machinery imported into Vietnam may not be older than 10 years.
👇 ...more below
Many companies are looking to import used machinery when establishing or extending manufacturing operations in Vietnam. These are strategic decisions for businesses to leverage advanced technology, gain cost benefits, and acquire high-quality equipment. Because, at the end of the day, even 20 year old technologies may still be able to hold up in terms of quality and effectiveness. However, navigating the legal and regulatory landscape is crucial for a successful and profitable outcome. Vietnam does not want to become "Southeast-Asia's TechnoWaste dump". Hence, it is imposing heavy restrictions on used machinery. This article provides an overview of the legal regulations, customs procedures, and specific considerations for importing these items into Vietnam.
⚖️Legal Regulations and Customs for Machinery Import in Vietnam
Import Regulations for Used Machinery
Vietnam's approach to importing used machinery shares similarities with other countries like China. On April 19, 2019, the Prime Minister of Vietnam issued Decision No. 18/2019, setting forth new criteria for the import of used machinery, equipment, and technological lines. Key criteria include:
Age Limit: Machinery must generally be less than 10 years old. However, for specific sectors such as mechanical engineering, wood production and processing, and pulp and paper production, machinery can be between 15 and 20 years old.
Manufacturing Standards: The machinery must comply with either the National Technical Regulations of Vietnam (QCVN), Vietnamese standards (TCVN), or the relevant standards of the G7 countries or Korea, focusing on safety, energy efficiency, and environmental protection.
In certain cases, companies in operation may import used machinery exceeding the standard age limit, provided they meet specific criteria:
Capacity Requirements: The machinery should retain at least 85 percent of its original design capacity.
Energy and Raw Material Consumption: The consumption of energy and raw materials should not exceed 15 percent above the planned usage. Companies meeting these criteria can apply to the Ministry of Science and Technology (MOST) for special review and approval.
Additionally, new investors may have the possibility to insert certain used machinery into their registration certificate. Yet this is tricky to put into practice.
Customs Procedures for Machinery Import
To ensure compliance and quality, imported machinery must meet Vietnam's customs clearance standards. Required documents for the import process include:
A copy of the business registration certificate.
The manufacturer's certificate of origin detailing the year of manufacture and compliance with machine standards.
An inspection certificate from an organization authorized by MOST.
👀 Case Studies
Some real-world examples of companies failing or succeeding in importing used machinery can be found below:
A construction material company has renewed the machinery park of its Chinese manufacturing lines, sees additional product demand in Asia-Pacific arising and wants to set up new lines in Vietnam with the old "Chinese" machinery. For the new plant, all machinery is used, some items have been put into service as early as 1986.
Result: No chance of getting the machinery in. The companies decides to invest in Thailand instead.
A chemical company opens a new subsidiary in Vietnam which it partly fits out with used machinery from Germany. It includes the machinery, some of which is older than ten years, into its business registration dossier.
Result: The machinery can be imported. However, customs department is taking a very close look at the importation process basically "checking every screw".
An electronics manufacturer sets up a new factory in Vietnam. Some of its machinery is used, eight years old, imported from a Chinese subsidiary.
Result: Import is possible according to the rules laid out above.
Generally, we are hearing about cases of investors trying to circumvent the regulations displayed in this article to import old machinery. Such business manner is illegal. In the face of ongoing anti-corruption measures, such behavior may end up with hefty punishment.
As laid out above, it is possible to import used machinery under certain circumstances. Understanding legal and procedural nuances is crucial for companies aiming to send machinery to Vietnam. Adhering to these regulations not only ensures compliance but also contributes to a smoother import process, ultimately benefiting the operational efficiency and growth of the importing business.
Please consider this information without liability for any data with respect to content, completeness or up-to-datedness.