Conditions to set up a foreign Logistic in Vietnam

Conditions for foreign investors doing business logistics services in Viet Nam. In the trend of commercialization and development of services in general that logistics services are increasing their value as well as their top importance. Logistics services is an industry that foreign investors take care of due to its great potential. However, doing business in logistics services is a conditional business investment line listed in The Law on Investment 2020 so that foreign investors when investing in establishing a logistics company or set up a company in Vietnam have to meet the conditions stipulated by specialized laws under Vietnamese law.

Legal documents

• The Schedule of Specific Commitments in Services of Vietnam in WTO;
• The Law On Investment 2020;
• Commercial Law 2005;
• Decree No.31/2021/ND-CP of March 26, 2021;
• Decree No.163/2017/ND-CP of December 30, 2017.

Types of Logistics services

Logistics services, according to stipulated in Article 233 The Commercial Law 2005, Logistic services are commercial activities whereby traders organize the performance of one or many jobs including reception, transportation, warehousing, yard storage of cargoes, completion of customs procedures, and other formalities and paperwork, provision of consultancy to customers, services of packaging, marking the delivery of goods, or other services related to goods according to agreements with customers to enjoy service fees.

According to Article 3 Decree 263/2017/NĐ-CP, logistics services are classified as follows:

• Container handling services, except for services provided at airports.
• Container warehousing services are classified as auxiliary services for sea
• Warehousing services are classified as all auxiliary services for multimodal transport.
• Delivery services.
• Freight transport agency service
• Customs brokerage services(including customs clearance services).
• Other services including bill of lading inspection, cargo brokerage services, cargo inspection, sampling and weighing services; goods receipt and acceptance services; and preparation of transport documents.
• Wholesaling auxiliary services and retailing auxiliary services including management of goods in storage, and collection, collation, and classification of goods and their delivery.
• Cargo transport services are classified as sea transport services.
• Cargo transport services are classified as inland waterway transport services.
• Cargo transport services are classified as rail transport services.
• Cargo transport services are classified as road transport services.
• Air carriage services.
• Multimodal transport services.
• Technical inspection and analysis services.
• Other auxiliary services for transport.
• Other services under the agreement signed between the logistics service provider and customer according to basic rules of the Law on Commerce.

Conditions for foreign investors doing business logistics services

Form conditions and owner ratio charter capital of foreign investors in economic organization

As stipulated in The Schedule of Specific Commitments in Services of Vietnam in WTO and Decree 163/2017/NĐ-CP, depending on activities logistics that the limit on the percentage of foreign capital contribution is different.

If the investor intends to implement provide many logistics services, the capital contribution rate of the foreign investor will be the lowest in the activities expected to be implemented. For example, as the investors intend to provide Container handling services, Container warehousing services, and Cargo transport services classified as road transport services that the maximum contribution capital is 50%. Due to logistic activities are quite large, if Clients have a demand, Viet An Law Firm will research and consulting in more detail when Clients provide the activities that Clients intend to implement.

 For logistics activities that the company with foreign capital is not allowed to implement.

Some Logistics activities that logistics companies with foreign capital are not allowed to implement:

• Pipeline transportation
• For inspection and technical analysis, it is not allowed to do business in inspection and certification services for means of transport.

Conditions for business licenses according to specialized laws

After issuing Investment Registration Certificate, Business Registration Certificate, the company with foreign capital implementing some logistics services to be issued a business license under specialized laws such as a postal license; a Transport business license;…

Some questions related to the application for the establishment of the company with foreign capital.

What types of logistics activities allowed foreign investors to invest 100% capital?

Activities with 100% capital investment:

• Warehouse services
• Freight transport agency service
• Delivery services.

Can foreign investors do business in freight forwarding services?

Freight forwarding is one of the activities of Freight transport agency services (CPC 748) so investors can invest 100% capital in this activity.

What logistics activities can foreign investors do business in?

Foreign investors are allowed to invest in the following activities:

• Container handling services, except for services provided at airports.
• Container warehousing services are classified as auxiliary services for sea
• Warehousing services are classified as all auxiliary services for multimodal transport.
• Delivery services.
• Freight transport agency service
• Customs brokerage services(including customs clearance services).
• Other services including bill of lading inspection, cargo brokerage services, cargo inspection, sampling and weighing services; goods receipt and acceptance services; and preparation of transport documents.
• Wholesaling auxiliary services and retailing auxiliary services including management of goods in storage, and collection, collation, and classification of goods and their delivery.
• Cargo transport services are classified as sea transport services.
• Cargo transport services are classified as inland waterway transport services.
• Cargo transport services are classified as rail transport services.
• Cargo transport services are classified as road transport services.
• Air carriage services.
• Multimodal transport services.
• Multimodal transport services.
• Other auxiliary services for transport.
• Other services under the agreement signed between the logistics service provider and customer according to basic rules of the Law on Commerce.

Services of the establishment of foreign-invested companies of Viet An law firm

• Advising on conditions for the establishment of foreign-invested capital companies: capital contribution ratio of foreign investors in Vietnam; business conditions of trades; the location of the project; note the procedures before and after the establishment of a foreign-invested company;
• Consultancy on choosing the appropriate type of company for investors: Limited Liability Company or Joint Stock Company;
• Advising on opening capital transfer accounts, capital contribution duration;
• Advising investors on the preparation of necessary documents for the establishment of foreign-invested companies;
• Advising and drafting company establishment documents for investors;
• Representatives of investors working with competent Vietnamese state agencies in the process of carrying out procedures for the establishment of companies for investors (Apply for investment registration certificates, enterprise registration certificates, business licenses, licenses according to specialized requirements, making legal marks and procedures after the establishment of an enterprise,…;
• Comprehensive, regular consultancy, accounting services, tax law package activities in the process of doing business in Vietnam for investors.