In Vietnam, the Government holds a monopoly on the importation of cigarettes and cigars, except import for sales as duty-free goods. The market size remains stable with over 100 billions cigarettes per year since 2015, in which around 60% is Vietnamese products, around 22% is foreign products made in Vietnam and 18% is illegally imported products. In 2023, the Vietnamese cigarette market was valued at approximately VND160.5 trillion (about USD6.8 billion). Vietnamese people spend a significant amount on tobacco annually. A 2024 report indicated that this figure reached nearly USD2 billion. The tobacco industry is a major to the State budget. The Vietnam Vietnam National Tobacco Corporation (Vinataba) alone contributes over VND10 trillion annually (VND15.5 trillion in 2024).
\nThere are currently around 16 Vietnamese cigarette manufacturers with Vinataba being a prominent unit in the production, distribution and trading scene. Additionally, there are two foreign-invested joint ventures between Phillip Morris and Vinataba, and British American Tobacco and Vinataba that engaged in the production of tobacco and shredded tobacco products respectively., where Vinataba holds the major ownership of the joint ventures.
\nRequirements for cigarette production
\nUnder Law on Investment 2020, cigarette production is a conditional business line, meaning investors have to fulfil requirements imposed by the Government regarding licensing procedures before commencement of operation. Entities manufacturing, buying and selling tobacco products, processing tobacco materials, buying and selling tobacco materials and investing in growing tobacco plants must obtain specific licenses for such activities according to regulations.
\nInternational regulations on Vietnamese tobacco products
\nEU-Vietnam Free Trade Agreement: After 15 years from 1 August 2020, EU will remove import taxes on Vietnamese tobacco products and vice versa.
\nVietnam-US Bilateral Trade Agreement and Vietnam-Japan Agreement on Investment Encouragement and Protection: Vietnam eliminated export requirements applicable to tobacco products for investors coming from USA and Japan.
\nWTO schedule: there\u2019s currently no commitments made by Vietnam to WTO members regarding the distribution of tobacco products.
\nTariff import quotas from the Eurasian Economic Union in 2023 – 2027 for tobacco is 500 tons per year.
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\nPlease do not hesitate to contact Dr. Oliver Massmann under omassmann@duanemorris.com if you have any questions or want to know more details on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.<\/p>\n","protected":false},"excerpt":{"rendered":"
In Vietnam, the Government holds a monopoly on the importation of cigarettes and cigars, except import for sales as duty-free goods. The market size remains stable with over 100 billions cigarettes per year since 2015, in which around 60% is Vietnamese products, around 22% is foreign products made in Vietnam and 18% is illegally imported … <\/p>\n