Question: We are a steel company in Korea and looking to set up a subsidiary company in Vietnam.
Our idea is to export raw materials from Korea to Vietnam, process and package in Vietnam then re-export to other countries.
In this regard, I would like to know:
1. Whether import duty will apply to the raw materials imported into Vietnam (which will later be re-export);
2. Whether anti-dumping duty will apply to the raw materials imported to Vietnam (because Vietnam has anti-dumping duty against steel from Taiwan);
3. After processing and packaging, whether the goods will quality as Vietnam origin (as we need to obtain general certificate of origin of Vietnam but not FTA certificate of origin)
4. Whether the company will need to be set up in a non-tariff zone or can be in an Industrial Zone
Answer: Please find our answers to your questions hereinunder:
1. Import Duty shall not be applied if the raw materials are re-exported within 60 days from import. Two extension times are acceptable. However, each extension time must not exceed 30 days.
2. According to the Decision No. 7896/QD-BCT dated 5th September 2014 of the Ministry of Industry and Trade, items imported from Korea having following HS codes shall be subject to anti-dumping tax: 7219.32.00; 7219.33.00; 7219.34.00; 7219.35.00; 7220.20.10; 7220.20.90; 7220.90.10; 7220.90.90.
3. The goods can only be granted Certificate of origin, if it satisfy localization rate contained in the products under Vietnam Law. For example, in order to obtain A grade C/O, the localization rate must be at least 60%.
4. The Company should be established in the Export Processing Zone so that the company can be entitled to import duty exemption. However, in such case, all products made by the company must be exported.
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