Cross-border E-commerce in Vietnam via Importer of Record: Why the Structure Fails from the Start

Cross-border E-commerce in Vietnam: Why the Structure Fails from the Start

In recent years, a common cross-border e-commerce model has been widely mentioned by businesses entering the Vietnamese market. Under this setup, a foreign seller does not establish a legal entity in Vietnam but instead appoints a local company to act as the importer of record. After customs clearance, goods are transferred directly into the fulfillment warehouses of e-commerce platforms such as Shopee or TikTok for domestic distribution. Meanwhile, all sales operations, marketing activities, and revenue collection remain controlled from overseas.

From an operational perspective, this model appears highly efficient.

• Pre-positioning inventory in Vietnam significantly shortens delivery time.

• Improves customer experience

• Allows businesses to enter the market with minimal upfront investment.

  
  

However, the core issue does not lie in operations. It lies in the fact that this structure is fundamentally misaligned with how Vietnamese law defines a valid commercial transaction.

How the structure of the cross-border e-commerce actually works in Vietnam:

To understand the issue, it is necessary to look at three key flows:

• Goods flow

• Cash flow

• Legal responsibility.

In this model, these three elements do not align.

The cross-border e-commerce by using an importer in Vietnam

Within this structure, the Vietnamese company acts as both the importer and the consignee on import documentation. It is therefore the legal party responsible for the goods. However, it is not the party conducting sales nor receiving revenue. Conversely, the foreign company is the actual seller and beneficiary of the cash flow, yet it has no legal presence in Vietnam.

The issue is structural, not a matter of scale

In a valid commercial structure in Vietnam, the flow of goods, cash flow, and legal responsibility should reflect the same underlying economic reality. While multiple parties may be involved, their roles must be clearly aligned and consistent.

In this case, those elements are completely separated. The importing entity in Vietnam bears full legal responsibility, including import duties, product compliance, and regulatory obligations. However, the current cross-border e-commerce, it neither controls the sales activity nor receives any revenue. Meanwhile, the foreign seller operates the business and receives payment but is not legally present in Vietnam to assume corresponding responsibilities.

This misalignment is not a risk that emerges only at scale. It exists from the outset. When documentation reflects one party, but the economic substance points to another, the structure becomes inherently inconsistent in the eyes of regulators.

Perspective from Vietnamese tax authorities and platforms

Under Decree 91/2022/ND-CP, e-commerce platforms are required to provide seller information to tax authorities, including identity data and revenue figures. When this data is combined with customs records and payment flows, authorities can cross-check and identify inconsistencies among the importer, the seller, and the revenue recipient.

In this model, the importer is a Vietnamese entity, while the seller and the recipient of funds are located overseas. This creates a high-risk profile from a tax administration perspective, as it obscures the identification of the true taxable party.

E-commerce platforms themselves are also under increasing pressure to ensure tax compliance. When funds are remitted abroad while legal responsibility remains with a domestic entity that is not involved in the financial transaction, reconciliation becomes complex. This is one of the key reasons why platforms are tightening requirements around seller identity, legal structure, and transaction transparency.

Why “import entrustment” cannot fix the structure

A common misconception is that “import entrustment” can be used to legitimize this setup to support cross-border trading on e-commerce platforms. In practice, within the Vietnamese legal framework, an importing entity cannot merely act as a nominal or technical representative if it is not the actual buyer in the transaction. Where the law requires a domestic entity to bear responsibility, that entity must reflect the true substance of the transaction.

Even attempts to use entrustment arrangements to align ownership on paper do not resolve the issue. While entrustment contracts may exist in form, the structure still requires a legally recognizable owner of the goods within Vietnam. In practice, the regulatory system is built around identifiable domestic entities that hold both ownership and responsibility.

If documentation indicates that the Vietnamese company is the importer, while the commercial activity and cash flow belong to another party, the structure fails to accurately represent the transaction. This is not a technical issue that can be resolved through contractual arrangements, but rather a fundamental issue of legal characterization.

More importantly, both tax administration and product compliance regimes are designed to operate through domestic legal entities. Where the party exercising control over the goods and receiving revenue is located overseas without legal presence in Vietnam, authorities lack a practical mechanism to enforce obligations directly. As a result, responsibility is inevitably attributed to the domestic entity on record, reinforcing the requirement that legal form must align with economic substance.

Beyond structure: the issue of business rights

The misalignment in this model is not limited to the separation of goods flow, cash flow, and legal responsibility. It also extends to how Vietnam regulates business activities through specific commercial rights.

In Vietnam, compliance is not achieved merely by having a local entity. The regulatory framework requires that each commercial activity, such as importation and distribution, be supported by the appropriate business rights. Having an entity that can import goods does not automatically confer the right to distribute or sell those goods in the domestic market.

In the structure described above, the Vietnamese entity acts as the importer of record and bears legal responsibility for the goods. However, it is not the party conducting the actual commercial activity on e-commerce platforms, nor is it the party receiving revenue. At the same time, the foreign seller operates the business and captures the economic benefit, but does not hold the corresponding business rights within Vietnam.

This creates a second layer of misalignment. Not only are goods, cash, and liability separated, but the entity exercising commercial control is not the one legally permitted to do so. From a regulatory perspective, this further reinforces that the structure does not reflect a valid or supportable business model.

Conclusion: the problem lies in the structure, not the operations

What often misleads businesses is the apparent operational efficiency of this model. However, legal systems do not operate on operational logic alone. A sustainable structure requires alignment between goods flow, cash flow, and legal responsibility, or at least clearly defined relationships that connect them.

In this case, those elements are disconnected from the start. As a result, the issue is not when risks may materialize, but rather that the structure itself is fundamentally incompatible with how Vietnamese law defines and regulates commercial activity. In Vietnam, the cross-border e-commerce market is complex by design, but with the right structure and compliance strategy, it becomes a powerful growth opportunity. We are here to help you navigate this landscape so your business can scale efficiently, securely, and with confidence. Contact us at info@tronchan.com for more information.