Vietnam is quickly becoming a viable option to source products and outsourcing manufacturing projects. The footwear giants like Nike and Adidas have been steadily moving production out of China to Vietnam. Facing rapid wage rises in China, companies from all over the world are attracting to Vietnam for its competitive labor cost, top-notch quality and lightning-fast productivity. Another major advantage of this country is its location as it is situated at the heart of Asia.
Foreign-Owned Manufacturers in Vietnam–
Vietnam business set up has become an appealing option for many foreign companies. It is noted that, because of the recent tariff war between Washington and Beijing, US companies are more inclined to source products from Vietnam instead of China. However, China business lawyers are of the opinion that foreign entrepreneurs should be prepared for complex regulations, bureaucratic challenges and licensing delays. You need to keep in mind that many factories in Vietnam that cater to America and European and Australian companies are owned out of Chinese companies.
Your Product Should be Made in Vietnam for the US Tariff Purpose–
The entire product line is located in China, the product is manufactured in China and then it is shipped to Vietnamese distributions centers from where it is transported to various locations. China lawyers suggest that, foreign businesses need to make sure that their product is actually manufactured in Vietnam, not shipped there from somewhere else. For the US tariff purpose, the product your sourcing should be completely made in Vietnam.
The Legal Consequences of Sourcing China Made Products from Vietnam-
Quite often it has been noticed that Chinese companies assure their foreign clients that they will ship their product to Vietnam from where they will ship it to their locations as though they are not from China to make it tariff-free.
>> The first concern that China lawyers pointed out, if the deceit is revealed to the authorities, it may lead to a huge penalty as well as imprisonment.
>> Your entire product could be ceased and your trade license may be withheld for lifetime as this type of transshipping is entirely illegal.
>> For saving only a few bucks, your business reputation could be at stake for breaching the rules of United States customs law.
The decision is up to you, whether you want to follow a sound and legal sourcing strategy or take an unnecessary risk. Vietnam Manufacturing is booming and finding the right supplier is getting easier, so you don’t need to take any unethical steps.