All three models may involve goods that are not intended for final consumption in Vietnam, yet their legal and operational structures are fundamentally different. Transit concerns foreign-owned goods moving through Vietnamese territory. Merchanting trade is a purchase from one country and a resale to another without carrying out import procedures into Vietnam or export procedures from Vietnam. Business temporary import for re-export involves two customs legs: the goods are temporarily imported into Vietnam and later re-exported. Selecting the wrong model can lead to inconsistent contracts, an incorrect customs regime, missing licences, loss of control over re-export deadlines, or unintended tax and domestic-market exposure. This article compares the three models for B2B industrial machinery, equipment and components and sets out the evidence, documents and control points required for each.

QUICK SUMMARY

Transit = movement through territory

Foreign-owned goods pass through Vietnam under an approved route, border-gate and customs-supervision regime; no purchase-and-resale transaction by a Vietnamese trader is required.

Merchanting = buy in country A, sell to country B

The goods are not imported into Vietnam and are not exported from Vietnam; they may move directly or via a Vietnamese port, transshipment area or bonded warehouse.

Business temporary import for re-export = import then re-export

The trader completes customs procedures for both temporary import and re-export and must control inventory, location, time limits and goods-specific conditions.

Do not classify by vessel route alone

Ownership, the two commercial contracts, delivery points, storage location, licensing, goods status and any domestic-use plan must be reviewed together.

Illustration for Transit, Merchanting Trade and Business Temporary Import for Re-export: What Is the Difference? — Illustration of the logistics topic, document or operation discussed in the article.

B2B logistics operational reference | Legal review updated to 20 July 2026 | English descriptions of Vietnamese law are for operational reference only and are not official legal translations.

SCOPE OF APPLICATION

This article applies to traders, factories, EPE/FDI companies, logistics providers and compliance teams handling industrial machinery, equipment, spare parts and components moving through Vietnam or traded between multiple countries.

It should not be mechanically applied to every commodity. Weapons, explosives, dual-use goods, scrap, used goods, frozen food, excise goods, chemicals and prohibited or restricted goods may require separate licences, business conditions, designated border gates or sector-specific controls.

NOTE FOR EPE/FDI ENTITIES: An export-processing enterprise or foreign-invested economic organisation must not be assumed to have the right to conduct business temporary import for re-export. Clause 2 Article 13 of Decree No. 69/2018/ND-CP provides that foreign-invested economic organisations may only conduct the other temporary import/re-export forms under Article 15 and may not conduct business temporary import for re-export. Merchanting and other trading rights must still be checked against the entity’s licence, business rights and investment conditions.

KEY TERMS

Term	Operational meaning	Recognition sign
Transit	Movement of goods owned by foreign organisations or individuals through Vietnamese territory; permitted operations may include transshipment, temporary storage, lot splitting or change of transport mode under supervision.	The main purpose is passage through Vietnam; the goods are not imported for domestic consumption.
Merchanting trade	A trader buys goods from one country or territory and sells them to another without import procedures into Vietnam and export procedures from Vietnam.	There is a purchase-and-resale chain; the goods may never physically enter Vietnam.
Business temporary import for re-export	A trader temporarily imports goods into Vietnam for business and later re-exports the same goods abroad.	There are temporary-import and re-export customs declarations plus inventory, location, border-gate and deadline controls.
Transshipment	A physical operation transferring cargo from one means of transport to another.	It may occur within transit or merchanting, but it is not automatically a separate trading model.
Bonded warehouse	A customs-supervised area for storing goods under statutory conditions.	It can be a storage point in merchanting or other regimes but does not convert the goods into domestic imports.
Domestic consumption	Release of goods into the Vietnamese market for use, sale or change of purpose.	This is a critical boundary; import procedures, taxes and product-policy rules must be reassessed before it occurs.

SUBSTANCE AND OPERATING MECHANISM

1. TRANSIT IS DEFINED BY THE JOURNEY AND CUSTOMS SUPERVISION

The core of transit is foreign-owned cargo moving from an entry border gate to an exit border gate across Vietnamese territory. A Vietnamese trader does not need to buy and resell the goods. The shipment must follow the permitted route, border gates and supervision conditions, preserve seals or perform only authorised operations, and remain traceable to customs.

2. MERCHANTING IS DEFINED BY THE INTERNATIONAL PURCHASE-AND-RESALE STRUCTURE

Merchanting is a commercial model: the trader buys from a supplier in country A and sells to a customer in country B. Goods may move directly A → B, call at a Vietnamese port without Vietnamese import/export procedures, or enter a transshipment area or bonded warehouse where permitted. A port call alone does not prove merchanting; the contracts, title and payment flows must support the model.

3. BUSINESS TEMPORARY IMPORT FOR RE-EXPORT IS DEFINED BY TWO CUSTOMS LEGS

Unlike merchanting, the goods are temporarily imported into Vietnam and later re-exported. The trader must control quantity, condition, storage location, border gates, re-export period, reconciliation and any licensing or business-condition requirements. Not every temporary import/re-export is “business” temporary import/re-export: exhibitions, warranty, repair, leasing, borrowing or project use may fall under other regimes.

LEGAL CONTROL POINT: Under Article 13 of Decree No. 69/2018/ND-CP, business temporary import for re-export is based on two separate contracts: an import contract and an export contract; the export contract may be signed before or after the import contract. As a general rule, the goods may remain in Vietnam for no more than 60 days from completion of temporary-import customs procedures. An extension may be requested up to twice, with each extension not exceeding 30 days, unless a sector-specific or amending instrument provides otherwise.

COMPARISON TABLE

Criterion	Transit	Merchanting trade	Business temporary import for re-export
Substance	Transport of foreign goods through Vietnam.	Purchase in country A and resale to country B.	Business transaction with temporary import into Vietnam followed by re-export.
Main parties	Foreign cargo owner, carrier, agent and transit declarant.	Trader acting between the original seller and final buyer.	Temporary-import/re-export trader and overseas purchase/sale counterparties.
Can the goods avoid Vietnam entirely?	No; they pass through Vietnamese territory.	Yes; one statutory form is direct shipment from the exporting country to the importing country.	No; the goods must be temporarily imported into Vietnam before re-export.
Vietnamese import/export procedures	No domestic import for consumption; transit procedures and supervision apply.	No import into Vietnam and no export from Vietnam; if the goods pass through Vietnam, port, warehouse and supervision procedures still apply as relevant.	Customs procedures apply to both temporary import and re-export.
Commercial contracts	Two Vietnamese purchase/sale contracts are not required.	Normally a purchase contract and a sale contract with aligned Incoterms, payment and document-control clauses.	Two separate contracts: an import contract and an export contract. The export contract may be signed before or after the import contract. The temporarily imported goods must be traceable to the re-exported goods.
Storage in Vietnam	Only within authorised places, time and transit conditions.	May use a port, transshipment area or bonded warehouse if the structure and law permit.	As a general rule under Article 13 of Decree No. 69/2018/ND-CP: no more than 60 days from completion of temporary-import procedures; an extension may be requested no more than twice, each for up to 30 days. Controlled goods may be subject to stricter rules.
Industrial example	A container of Chinese components passes through Hai Phong for delivery to Laos.	A Vietnamese trader buys controllers from Korea and sells them to Cambodia; cargo moves directly or via a Vietnamese bonded warehouse.	A trader temporarily imports industrial spare parts into Vietnam, stores them and re-exports them to a third market.
Primary risk	Wrong route or border gate, broken seal, unauthorised unloading or excessive journey time.	Failure to prove no domestic import; contracts and bills of lading do not support the trade chain; transshipment is confused with merchanting.	Late re-export, missing licence/business code, inventory variance, change of use or domestic release.

KEY CONTROL: Do not classify the model solely by the bill-of-lading wording or a port call; contracts, title, payment and customs treatment must be aligned.

DOCUMENTS AND DATA TO VERIFY

Data group	Transit	Merchanting	Business temporary import/re-export	Data owner
Parties and title	Cargo owner, carrier, agent and authorisation.	Intermediary buyer, original seller, final buyer and right to dispose of goods.	Trader, supplier, re-export buyer and goods-specific business conditions.	Sales/Legal/Compliance
Contracts	Transit/transport contract and handling instructions.	Purchase contract + sale contract; Incoterms, payment and document-switching clauses.	Purchase and resale/re-export contracts; deadlines, quality and fallback treatment for non-reexported goods.	Sales/Procurement
Goods description	Technical name, indicative HS, model, serial, quantity and condition.	Description aligned across both contracts, invoices and transport documents.	Temporary-import description linked to re-exported goods; justified shortage/variance controls.	Technical/Operation
Route and custody	Entry gate, exit gate, route, vehicle, timing and transshipment points.	Purchase country, sale country, direct route or Vietnam port/bonded warehouse.	Temporary-import gate, storage place, re-export gate and supervised transport plan.	Operation/Forwarder
Customs evidence	Transit file, transport document, manifest, seals and sector licence where required.	Evidence that the goods were not imported domestically; port/bonded-warehouse/transshipment records.	Temporary-import and re-export declarations, licence/business code where required, stock ledger and reconciliation.	Customs/Compliance
Payment and accounting	Service charges and disbursements separated from the foreign owner’s cargo value.	Two purchase/sale flows, margin, currency, payer/payee and bank evidence.	Purchase price, resale price, guarantee/deposit where applicable, tax treatment and temporary-import accounting.	Accounting/Treasury
Limits on cargo handling	No unauthorised processing, repacking, splitting or unloading.	No domestic sale without complete import procedures and obligations.	No use, consumption or change of purpose in Vietnam without prior customs, tax and product-policy treatment.	Operation/Compliance

PROCESS TO SELECT AND EXECUTE THE CORRECT MODEL

Step	Control question	Action	Output	Lead
1. Define the transaction objective	Is the company only moving cargo, acting as a buy-sell intermediary, or temporarily importing cargo into Vietnam for re-export?	Map goods, documents, money and title.	One-page transaction map.	Sales + Compliance
2. Lock the goods profile	Are the goods prohibited, restricted, dual-use, used, scrap, frozen food, chemicals or otherwise conditional?	Review HS, condition, function, origin/destination and purpose.	Goods-policy matrix.	Customs + Technical
3. Lock the physical route	Direct shipment, Vietnam port call, bonded warehouse, or temporary import under supervision?	Confirm gates, ports, warehouse, conveyances, transshipment points and timing.	Routing and custody plan.	Operation
4. Select the legal model	Which model reflects substance rather than filing convenience?	Compare statutory definitions, contracts and foreign-trade controls.	Model-selection memo.	Compliance/Legal
5. Check licences and authority	Is a licence, business code, border-gate approval or sector approval required?	Review Decree 69, Decree 146/2025 and current goods-specific rules.	Pre-booking condition list.	Compliance
6. Align documents	Do contracts, invoices, B/L/AWB, manifest, warehouse records, declarations and payment tell the same story?	Cross-check before departure and before customs filing.	Approved pre-alert package.	Operation + Accounting
7. Execute and supervise	Are route, seal, location and deadlines being maintained?	Track milestones, exceptions, custody confirmations and stock.	Shipment supervision log.	Operation/Customs
8. Close the file	Are inbound/outbound goods, debts, costs, declarations and licences reconciled?	Reconcile quantity, dates, documents and obligations.	Complete audit trail.	Accounting + Compliance

RISKS AND COMMON ERRORS

1. CALLING EVERY SHIPMENT THROUGH VIETNAM “MERCHANTING”

Merchanting is an international purchase-and-resale structure; transit is a transport structure. A Vietnamese port call does not by itself establish merchanting.

2. CONFUSING TRANSSHIPMENT WITH MERCHANTING

Transshipment is only a physical change of conveyance. It can occur in both transit and merchanting. Contracts, title and payment flows—not the crane move at the port—determine the trading model.

3. USING A BONDED WAREHOUSE AS IF IT WERE A DOMESTIC WAREHOUSE

Goods remain under a separate customs regime. Sampling, splitting, repacking, transfer of title and domestic release must stay within permitted operations and procedures.

4. CONFUSING BUSINESS TEMPORARY IMPORT/RE-EXPORT WITH WARRANTY, EXHIBITION, LEASE OR REPAIR

The transaction purpose determines the regime. Using a business model for non-sale goods—or the reverse—can distort tax, licensing and time-limit treatment.

5. IGNORING SENSITIVE-GOODS CONTROLS

Used machinery, dual-use equipment, chemicals, scrap, excise goods and prohibited/restricted goods may require specific licensing. The logistics model does not remove sector obligations.

6. NO PRE-PLANNED CHANGE-OF-PURPOSE MECHANISM

If domestic sale or use may occur, the contract and compliance plan should address it before shipment. Goods should not be released domestically first and documented afterwards.

7. ASSUMING AN EPE/FDI ENTITY MAY CONDUCT BUSINESS TEMPORARY IMPORT FOR RE-EXPORT

EPE or foreign-invested status does not itself create that trading right. The “other temporary import/re-export forms” under Article 15 must be separated from “business temporary import for re-export” under Article 13. Trading rights, project objectives, business licences and market-access conditions must also be verified.

LEGAL BASIS AND OFFICIAL SOURCES

Instrument	Issuing authority	Effective/application status	Role	Current-reading note
Commercial Law No. 36/2005/QH11	National Assembly	Effective from 1 January 2006	Article 29 on temporary import/re-export, Article 30 on merchanting, and Articles 241–253 on transit.	Foundational definitions; read together with foreign-trade, customs and sector rules.
Law on Foreign Trade Management No. 05/2017/QH14	National Assembly	Effective from 1 January 2018	Framework for temporary import/re-export, merchanting, transit, licensing and foreign-trade controls.	Does not replace customs procedures or commodity-specific controls.
Customs Law No. 54/2014/QH13	National Assembly	Effective from 1 January 2015	Customs declaration, inspection, supervision, customs-controlled movement and declarant responsibility.	Consult the current consolidated text and implementing rules on the declaration date.
Decree No. 69/2018/ND-CP	Government	Effective from 15 May 2018	Prohibited/conditional goods, eligible actors, contracts, time limits, border gates and licensing for these models.	Clause 2 Article 13 excludes foreign-invested economic organisations from business temporary import for re-export; Article 15 governs other temporary import/re-export forms.
Decree No. 146/2025/ND-CP	Government	Effective 1 July 2025; Article 60 provides expiry from 1 March 2027 except transitional provisions	Delegation and decentralisation of certain industry and trade powers.	Do not assume the former licensing authority remains competent; verify the receiving authority at filing.
Decree No. 08/2015/ND-CP, amended by Decree No. 59/2018/ND-CP and Decree No. 167/2025/ND-CP	Government	Decree No. 167 effective from 15 August 2025	Detailed Customs Law framework for procedures, places, inspection, supervision and control.	The earlier draft omitted the 2025 amendment layer; apply the decree as amended.
Circular No. 38/2015/TT-BTC, amended by Circular No. 39/2018/TT-BTC and Circular No. 121/2025/TT-BTC	Ministry of Finance	Circular No. 121 effective from 1 February 2026	Customs dossiers, declarations, supervision and management of import/export flows.	Use the text as amended on the declaration date, not only the original 2015 circular.
Consolidated Document No. 47/VBHN-BCT dated 4 June 2026	Ministry of Industry and Trade	Consolidation for reference	Consolidates the circular implementing the Law on Foreign Trade Management and Decree No. 69/2018/ND-CP.	A consolidated document creates no new legal effect; consult original instruments where necessary.

VIEW DECREE 69/2018/ND-CP VIEW DECREE 167/2025/ND-CP VIEW CIRCULAR 121/2025/TT-BTC VIEW CONSOLIDATED DOCUMENT 47/VBHN-BCT

FREQUENTLY ASKED QUESTIONS

Does a Vietnamese port call automatically make the shipment transit cargo?

No. Determine whether the goods move from an entry gate to an exit gate under the transit regime or merely call for transshipment within another structure.

Must merchanting goods pass through Vietnam?

No. One form is direct shipment from the exporting country to the importing country while the Vietnamese trader remains the commercial intermediary.

Can business temporary-import/re-export goods be sold in Vietnam?

Domestic sale is not automatic. Before any change of purpose, the company must review import conditions, declaration, taxes, licensing and product-policy requirements.

Do all temporary-import/re-export goods require a licence or business code?

No. Requirements vary by commodity, condition and current regulations. Conditional goods must be screened before contract signing and booking.

Can a bonded warehouse be used for merchanting?

Potentially yes, where it fits a statutory merchanting form and all entry/exit, storage, documentation and supervision rules are met.

What four questions should drive model selection?

Who owns and controls the goods? Is there a purchase-and-resale chain? Are Vietnamese temporary-import/re-export declarations used or does the cargo merely pass through? Are goods-specific licences or conditions triggered?

APPLICATION NOTE: Labels used in contracts or emails do not determine legal substance. The conclusion must follow cargo flow, title, contracts, transport documents, storage point, customs regime, actor eligibility and commodity policy. In particular, “business temporary import for re-export” under Article 13 must not be merged with the “other temporary import/re-export forms” under Article 15 of Decree No. 69/2018/ND-CP. Legal sources were reviewed to 20 July 2026; competent authority and amendments must be rechecked at implementation. English descriptions of Vietnamese law are operational references, not official legal translations.

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