A note to export processing businesses

DNHN - An export processing enterprise is a business located in an export processing zone that specializes in the production of consumer goods destined for international markets. 100% of items manufactured by processing firms must be exported and declared to the customs office.

Regulations on export processing enterprises

There are several general restrictions on export processing enterprises (EPZs) according to Decree No. 114/2015 revising and supplementing Article 21 of Decree No. 29/2008 and Decree No. 164/2013 regulating the operation of industrial parks, export processing zones, and economic zones.  

Export processing zones or EPEs may apply regulations for non-tariff zones, except for special incentives for non-tariff zones in border-gate economic zones;

EPEs are specified in the Investment Registration Certificate or in the document of the competent investment registration agency in case the procedures for issuance of the Investment Registration Certificate are not required;

An export processing zone or EPE is separated from the outside territory by a fence system, with gates and doors, ensuring conditions for inspection, supervision and control by customs and other related agencies;

EPEs are allowed to purchase construction materials, stationery, food, foodstuffs and consumer goods from inland Vietnam to build works, serve for office administration and build corporate culture. activities of officials and workers working at the enterprise;

EPEs, as well as sellers of EPEs, have the option of exporting, importing, and customs procedures for building materials, stationery, food, groceries, and consumer products from interior Vietnam;

EPEs may sell into the domestic market the liquidated assets of the enterprise and goods under the provisions of the law on investment and trade. At the time of sale or liquidation to the domestic market, no policy on the management of exported or imported goods shall apply, except for cases where goods are subject to management according to conditions, standards, and specialized inspection has not yet been carried out. imports, goods managed by permits must be approved in writing by the import licensing agency; 

Officials and employees working in export processing zones and EPEs when bringing foreign exchange from inland Vietnam into export processing zones and vice versa are not required to declare customs; 

An EPE that is granted a business license for goods trading and activities directly related to the purchase and sale of goods in Vietnam must open a separate accounting book for its revenue, enterprise management expenses, and expenses related to goods trading activities in Vietnam. Arrange a goods storage area separate from the goods storage area for production activities of EPEs or set up a separate branch outside the export processing zone to carry out this activity.

Export processing enterprises (EPCs) need to meet regulations on management for branches, specifications of hard fences, minimum area... These contents are specified in Clause 10, Article 1 of Decree No. 18 /2021/ND-CP dated 11/03/20 of the Government.

About the administration of export processing enterprise branches

Regarding the content of management for dependent branches of EPEs established in a customs management area different from where the EPEs' head office is located, the General Department of Customs said: Branches of EPEs are allowed to apply the mechanism. for EPEs, if they satisfy the conditions in Clause 10, Article 1 of Decree No. 18/2021/ND-CP, are established in an export processing zone, industrial park, economic zone and dependent on the EPE.

The dependent branch of the EPE must be shown on the Investment Registration Certificate of the EPE issued by a competent authority.

The Customs Department where the EPE's head office is located shall send a written request to the Customs Department where its dependent branch is located to inspect and certify the branch's inspection and supervision conditions according to regulations.

Notably, regarding the time limit for storing camera image data at DNCX, the General Department of Customs stipulates that the data retention period is counted from the time the camera system stores the actual images generated until the images are captured. deleted from DNCX's data for at least 12 months.

Conditions on fence specifications

Regarding the specifications of the hard fence, based on the provisions of Clause 10, Article 1 of Decree No. 18/2021/ND-CP, the hard fence must ensure the conditions to separate the EPE from the outside area.  

Accordingly, the Customs Departments of provinces and cities shall base themselves on a case-by-case basis on the form, materials and specifications of the construction of hard fences when carrying out a physical inspection of the conditions for customs inspection and supervision for EPEs to assess the ability to ensure the separation conditions between the EPEs and the outside area and to meet the inspection and supervision conditions of the Customs.

In case there are ordinary enterprises and EPEs established in industrial parks or economic zones in an export processing zone or sub-zone, each EPE must meet the conditions of having its hard fence separating each EPE from the area. outside areas and must ensure that goods entering and leaving the EPE only go through a separate gate/door of the EPE as prescribed in Clause 1, Article 28a of Decree No. 18/2021/ND-CP.

In case an EPE rents a workshop, production facility and shares the premises of the workshop or production facility with an enterprise other than an EPE, each EPE must satisfy the conditions of having its hard fence to prevent it. separated from the outside area and must ensure that goods entering and leaving the EPE can only go through a separate gate/door of the EPE as prescribed in Clause 1, Article 28a of the Decree No. 18/2021/ND-CP.

Contents related to tax policy

Regarding tax policy in case the conditions for inspection and supervision of EPEs are not satisfied, the General Department of Customs requests the Customs Departments of provinces and cities to comply with the provisions of Clause 5, Article 28a of Decree No. 18/2021/ND-CP.

Specifically, within a maximum period of no more than 1 year from the effective date of Decree No. 18/2021/ND-CP, the EPE has been granted an investment registration certificate or a document from the registration authority. competent investment (in case the issuance of an Investment Registration Certificate is not required) before the effective date of Decree No. 18/2021/ND-CP (April 25, 2021) and is in the operation process (including EPEs whose customs inspection and supervision conditions have been confirmed by the Customs before the effective date of Decree No. 18/2021/ND-CP) must complete the following conditions: conditions for customs inspection and supervision.

In case the EPE fails to satisfy the conditions for customs inspection and supervision, the EPE may complete the conditions for customs inspection and supervision many times but within 1 year from the effective date of this Decree.

For cases where the time limit is 1 year from the effective date of Decree No. 18/2021/ND CP (April 25, 2021), but the EPE does not notify the Sub-department of Customs where the EPE is managed. or fails to satisfy the conditions for customs inspection and supervision as prescribed, the EPE may not apply the tax policy to the non-tariff zone from the date of expiry of 1 year.

If the EPE then meets the requirements for customs inspection and supervision, a written notification shall be provided to the Customs Sub-department where the EPE is managed for inspection and certification by the Customs Sub-department where the EPE is managed. If the conditions outlined in Clause 10 of Article 1 of Decree No. 18/2021/ND-CP are met, the EPE may apply the tax policy to the tax-free zone beginning on the date the EPE is located in the customs sub-department. indicate that all customs inspection and supervision requirements have been met.

Phuong Ngan