[Vietnam Biz – Part 19] What are the latest regulations and restricted items for importing used machinery into Vietnam? Five practical measures that work in the field (Part 5)

Restrictions to in-house use and their impact on the used machinery business

When importing used machinery into Vietnam, the most defining feature is the principle that “use is limited to the importing company itself.” This is a strict rule allowing imports only when the machinery is used as production equipment in the importer’s own factory, whether it is a local company or a local subsidiary of a Japanese firm. On the other hand, the business model of used machinery traders—who purchase equipment for resale—is heavily affected by these regulations.

This chapter explains in stages the rules limiting imports to in-house production purposes, restrictions on resale, and the current challenges faced by used machinery traders. To formulate future business strategies, it is essential to correctly understand both the regulatory framework and its practical implications.

• ・In Vietnam, importing used machinery is, in principle, limited to in-house use
• ・Imports for resale purposes are subject to strict regulations
• ・The used machinery trading business faces significant constraints
• ・Violations may result in penalties or orders for re-export
• ・Accurate understanding of local regulations is essential for business strategy

5.1. Imports are limited to in-house production purposes

Under Vietnam’s system for importing used machinery, a key feature is that procurement is permitted only when the equipment is intended for the importer’s own production activities. In actual customs procedures, it is mandatory to submit documentation explaining the purpose of in-house use. If the declared purpose does not match the actual usage on site, import approval may be denied.

For example, importers must clearly state specific reasons such as expanding a production line or introducing a new project. They must also accurately describe the installation location and intended use of the machinery. Even after importation, authorities may conduct on-site inspections, so it is important to ensure there are no inconsistencies in actual operations. These strict rules are rooted in objectives such as environmental protection, safety considerations, and preventing the inflow of obsolete or scrap machinery.

5.2. Imports for resale are generally not permitted

The business model of purchasing used machinery for domestic resale—typical of used machinery traders—is subject to very significant restrictions in Vietnam. Under current regulations, imports intended for resale are generally prohibited, and transactions based on commercial resale are not allowed.

Strict reviews are conducted on import documentation and verification of actual use. In many cases, if the end user or distribution route is unclear, import approval is denied. Furthermore, if machinery is sold after import, it constitutes a regulatory violation, potentially resulting in penalties or orders for re-export. These regulations aim to prevent inappropriate machinery from entering the domestic market and to control environmental and safety risks.

5.3 Expansion of the used machinery trading business is difficult

Due to the restrictions on in-house use and resale, the traditional used machinery trading business model is extremely difficult to develop in the Vietnamese market. If companies wish to sell machinery locally, the mainstream approach is through authorized distributors of new machinery or direct sales by manufacturers, while the circulation of used machinery is strictly limited.

Even if there is demand from multiple companies for procuring used machinery, imports themselves are not permitted, making it impossible to maintain inventory domestically for resale. In addition, risks such as administrative penalties and the cost of re-export in case of violations cannot be ignored. Given this market environment, launching a used machinery trading business in Vietnam requires careful consideration and thorough risk management.

• ・Used machinery trading is difficult to develop in the Vietnamese market
• ・Authorized distribution and direct sales of new machinery are the mainstream
• ・Inventory-based resale models for used machinery are not viable
• ・Risks associated with regulatory violations are extremely high
• ・Careful judgment and preparation are essential for business expansion