Preamble Import and export has been holding the leading position in foreign trade activities. Nowadays, not only in developed countries where this activity has been going wild, but also in developing countries, this trend has been growing strongly. Incorporating with this trend, many import and export companies in Vietnam have been born which making a new development of foreign trade in Vietnam. Aware of this, after a period of studying professional subjects and as the request of the school about the internship, I applied for 4-week internship at VINDRINK.
According to the knowledge that I have gained through classes as well as the useful information which was accumulated during the internship, I decided to choose project: “Enhancing the Effectiveness of Import and Distribution Channel of Vindrink.,JSC” in order to understanding and practically learn about the import activity. There are three main parts of the thesis: Chapter 1: The theoretical basis of Import Activity at VID Chapter 2: Evaluate Import Department at VID Chapter 3: Orientation and Solutions to enhance import business efficiency at VID In order to accomplish this minor thesis, first of all, I would like to thank the Board of Directors and Sales Department of VINDRINK., JSC for creating favorable conditions for me to practice at the company in the past few months. I would like to sincerely thank MSc. Pham My Hang Phuong – Who has wholeheartedly guided, contributed advices, answered questions for me in the process of writing this graduate thesis.
1 Despite trying to improve the thesis, but due to the short time of internship and the limited understanding, this graduate thesis cannot avoid errors. Contributions from teachers would help me to make this thesis more complete. Student Bui Nhat Ha 2 Chapter 1. The Theoretical Basis 1.
Definitions, characteristics and roles of importation 1. Definitions Importing play a pivotal role of foreign trade, it is one of the two basic activities that constitute foreign trade. According to article no.28 in Vietnam Commercial Law 2005 “Import of goods means the bringing of goods into the territory of the Socialist Republic of Vietnam from foreign countries or special zones in the Vietnamese territory, which are regarded as exclusive customs zones according to the provisions of law”. According to Clause 1, Article 28 of the Commercial Law 2005 , the definition is as follows: "Importing goods means that goods are brought into the territory of Vietnam from foreign countries or from special areas located in the territory of Vietnam to be considered regions.
Private customs in accordance with the law". The Market Business News also defines the term “Import” is understood as “Imports are goods or services of foreign origin that importers bring into a country”. Imports are important for the economy because they allow a country to supply nonexistent, scarce, high cost or low quality of certain products or services, to its market with products from other countries. Import also aims to strengthen the economic facilities, modern advanced technology.
enhance technology transfer, save production costs, labor time, and contribute to the production development of society is a highly effective way. On the other hand, import creates a driving force for domestic manufacturers to optimize production system, create apparatus to compete with 3 foreign manufacturers. So in this thesis, I used the definition as article no. 28 in Vietnam Commercial Law 2015 to define what is importation.
Characteristics of Importation Import is an international trading activity, it is a complex and organized system of trade relations from inside to outside. Therefore, import activities bring out high economic efficiency. However, it can also cause unpredictable consequences from the external economic system that a participating country cannot control by itself. Import activities are organized, perform many tasks and many different stages.
Starting from foreign market surveys, selection of imported goods, transactions, conducting negotiations and signing contracts, organizing contract implementation until receiving goods and paying. Steps and tasks must be thoroughly researched and analyzed to capture the advantages and achieve the results that company wants. Import includes activities of trading transactions between people or corporates from different nationalities. With the characteristics of large, difficult to control market, the payment currency must be foreign currency for a country or both, and different countries participating in import activities must follow the customs of the locality and international practices.
Import activities take place on a very wide range both in space and time. It can be carried out on the territory of a country or in many other countries around the world. Besides, it can take place in a short or even yearly period depending on the contract signed between the parties. Import activities take place in all areas.
Imported goods can be consumer goods or production materials, machinery or high-tech technologies to benefit importing countries. 4 Import brings benefits not only to the enterprises themselves but also to the economy and people's lives. A developed import sector contributes in reducing the unemployment rate as well as improving the economic state of importing country. The roles of Importation Importing is an important activity in international trade.
It directly affects the production state and human life (through consumption of imported goods). Through import, it enhances the technical facilities, advanced and modern technology for the production process and people will also be able to consume products that cannot be produced in their country or production cannot meet domestic demands. Import has the following major roles: 1. For the World economy Beforehand, through import activities, countries around the world have opportunities to understand the customs, culture and political.
of other countries which they co-operate with. Thereby contributing to speeding up the process of economic integration among countries, fully exploiting their comparative advantages and using human and natural resources more appropriately. Import activities will stimulate production and consumption in each developed country. It makes the volume of goods and demand in the world economy increase, thereby also improving people's living standards.
Import will help developed countries or developing countries have the opportunity to learn a lot of experience in managing and acquiring scientific and technical achievements as well as serving the industrialization and modernization process. 5 Import promotes economic integration between countries and regions. It makes the international division of labor take place all over the world, creating a reputation for each member state to be enhanced. At the same time, activities such as insurance, tourism, services and trade also developed rapidly.
For the State economy Vietnam is a developing country so that importing goods is indispensable for the process of developing the economy and accelerating the industrialization and modernization of the country. Thus, import activities have a huge role for the Vietnamese economy. Importing construction equipment helps process of material and technical construction to shorten time and effort. It facilitates the development of the economy with modern equipment lines.
By importing modern equipment, it helps domestic workers have opportunities to improve their skills and knowledge, managers have conditions to improve knowledge of qualifications and management. Importing goods makes it possible to diversify sorts and types of goods, consumers will be able to choose goods that are more suitable for their income. This also makes a contribution in improving people's lives. At the same time, import activities also timely replenish domestic goods due to inadequate domestic production.
Thanks to importation, the domestic manufacturing industry will be able to eliminate weak production units with no competitiveness. Besides, businesses have to face the need to innovate both technology and management in order to maintain profits and improve the competitiveness of their goods, facilitate the dominance of the domestic market and gradually proceed to exportation. 6 Eventually, importation will create opportunities for our country to expand diplomatic relations with other countries. Then enlist their support for our economic development.
For the Enterprises Through import activities, enterprises must innovate and improve quality technology and product services in order to increase the competitiveness of domestic products. Thereby, production efficiency is enhanced, workers find jobs, and workers' life is improved. Import activities are complex international activities because of the exchange of many different economies of culture, politics, customs, and languages. Therefore, enterprises are forced to perfecting and innovating business management, officials and individuals always have to gain experience and improve professional skills.
It enhances the professional capacity of members of the enterprise. Importation plays an important role in increasing the position and reputation of the company both in domestic market and international market. The profit from business allows the company to build technical facilities, expand business fields in both depth and width, contributing to solving jobs for workers and improving life of officials and employees, solving problems of society, improving and developing business relationships. Import brings conditions for businesses in connecting between domestic and foreign entities in a self-conscious way, stemming from the interests of both sides, creating the strength of the subject in the enterprise in a practical way.
Therefore, imports mean very important for a nation's development, it exists as a necessity. Types of importation Import business activities can only be conducted in import-export enterprises directly, but in fact, due to the impact of business conditions, Vietnam creates various import and export forms. In this section, we only consider a few common and popular forms of import that are being applied at enterprises in Vietnam. Direct Imports Definitions: According to the Commercial Law 2005, direct import is defined “For this form, the buyer and the seller of the goods directly deal with each other, the buying and selling process is not tied to each other.
Buyers can buy without selling and vice versa. Direct import is conducted quite simply. In particular, the importer wants to sign an import business contract, must study the market, find suitable partners, sign and perform contracts, self-invest, bear all risks and costs in deal…” Characteristics: In direct import, businesses must take all the tasks. This is an activity that must be carefully considered accurate from the initial step of researching information to signing the contract.
The reason for this due to businesses have to invest their own capital to bear all transaction costs, market research, delivery, warehousing, cost to consume goods, taxes payable when businesses Self-trading, enterprises are allowed to import imports and when consuming goods, enterprises are subject to sales tax and item tax. As usual, the business only needs to make a contract with the foreign party, and the domestic purchase contract will be made after the goods arrive. Entrusted Imports Definitions: According to the Decision no. 1172/TM/XNK dated September 22, 1994 which released by the Minister of the Ministry of Trade, entrusted import is defined “Entrusted import and export is commercial service activities 8 in the form of leasing and importing for export or import services.
This activity is carried out on the basis of an export or import entrustment contract between enterprises, in accordance with the provisions of the Ordinance on Economic Contracts”. In other words, entrusted import is activity formed between a domestic enterprise with its own foreign currency capital and a demand for import of a commodity but they do not have the right to participate in direct import-export relations, thus they entrust one enterprises with the function of directly conducting foreign trade transactions shall import according to their requirements. On the other hand, authorized importers are importers that act as intermediaries to import goods. The entrusted party must negotiate with foreign countries to import goods at the request of the entrusting party.
Normally, a entrusted party is entitled to a remuneration of 0.5% of the total contract value, also known as a entrust fee and they must pay income tax on this source also, when conducting import Entrusted enterprises only calculate import and export turnover, not include turnover and pay value added tax.