Vietnam is a nation which has growing maritime business as its 3000-kilometer long coastline and the key location of South East Asia. Moreover, Vietnam also has a lot of industrial and export-processing zones leading import and export business become one of the mains investment filed here. Hence, logistics services is considered as a potential business for foreign investors. However, “logistics services business” is listed in the Law No.03/2016/QH14 as a conditional business sector. Therefore, foreign investors shall satisfy these conditions stipulated in the laws of Vietnam and international commitments in order to invest in Vietnam. Viet An Law Firm collects and provides some basic information related to foreign investment in logistics services as follows:
Logistics services, as stipulated in Article 233 the Law on Commerce 2005, are commercial activities whereby traders perform one or some 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, delivery of goods, or other services related to goods according to agreements with customers in order to receive service charges.
In accordance with Article 4 Decree No.140/2007/NĐ-CP, logistics services are classified as follows:
|Principle logistics services||Logistics services related to transportation||Other related logistics services|
|Services of arranging pickup and loading of goods, including loading goods into containers;Goods warehousing and storage services, including the business of warehousing in containers and storage for processing raw materials and equipment;|
Transportation agency services, including agency activities of conducting customs procedures and preparing plans for unloading goods;
Other subsidiary services including activities of receiving, archiving and managing information about transportation and storage of goods throughout the entire logistic process; activities being reprocessing of goods returned by clients, reprocessing of goods in storage and of outof-date goods and redistribution of such goods; and activities being leasing out and hire purchase of containers.
|Sea carriage services;Internal waterways carriage services;|
Aviation carriage services;
Rail carriage services;
Road carriage services;
Pipeline conduit services.
|Services being technical checks and analysis;Post services;|
Wholesale commercial services;
Retail commercial services, including activities of managing goods in storage; collecting goods from various sources, assembling and classifying the goods, and redistributing and delivering them;
Other subsidiary transportation services.
Conditions applied to foreign investors:
Investment forms: Foreign investors must corporate with Vietnamese partners. 100% foreign-owned logistics company is not allowed under the laws of Vietnam.
Proportion of foreign capital in the company: As the laws do not allowed 100% foreign-owned logistics companies, foreign investors shall corporate with Vietnamese partners to run their business. However, in the Schedule of Specific Commitments in Services of Vietnam in WTO, the maximum proportion of foreign capital in a logistics company depends on each activity. Please refer to the table below:
|Sectors||Codes||Maximum foreign capital|
|Container handling services||CPC 7411||50%|
|Freight transportation (internal waterways)||CPC 7222||49%|
|Freight transportation (Railways)||CPC 7112||49%|
|Freight transportation (Roadways)||CPC 7123||51%|
|Storage and warehouse services||CPC 742||None|
|Freight transport agency services||CPC 748||None|
If foreign investors intend to provide several logistics services, the maximum proportion of foreign capital in the company shall be the lowest level among those services. For example, if the company intends container handling services, storage and warehouse services and freight transportation (roadways), foreign capital of the company shall not exceed 50% of the charter capital. As logistics services are wide and complicated, in case Clients need, Viet An Law Firm shall research and give detailed information and advice once Clients provide us the list of intended services.
Logistics activities: There are some logistics activities that foreign-owned logistics companies cannot perform:
In order to invest in logistics services in Vietnam, foreign investors can choose one of two following options:
Option 1: Establish foreign-owned logistics company in Vietnam
Notice: Foreign investors are not allowed to own up to 100% of the charter capital. Hence, they need to corporate with Vietnamese partners.
Step 1: Apply for the Investment Registration Certificate
An application for the Investment Registration Certificate includes:
Submit the application at: The Department of Planning and Investment.
The process: Within 15 days from the receipt date of the valid application, the Department of Planning and Investment will grant the Investment Registration Certificate to foreign investors. If the Department of Planning and Investment refuse to grant, they will respond in notices and explain the reasons.
Step 2: Establish foreign-owned logistics company in Vietnam
Apply for the Business Registration Certificate:
An application for the Business Registration Certificate includes:
Submission place: The Department of Planning and Investment.
Duration: 03 – 06 working days.
Announce the business registration contents:
Engrave the seal and publish the seal sample:
Option 2: Contribute capital, purchase shares, purchase capital contributions to Vietnamese logistics company
This option shall save time and money for foreign investors as they do not have to apply for the Investment Registration Certificate. However, they shall comply with the regulations on the foreign capital stating that foreign investors cannot own up to 100% of the charter capital of the company. In case investors choose this option, they just need to register to contribute capital, purchase shares, purchase capital contributions at the Department of Planning and Investment. Regarding to logistics activities foreign investors cannot perform, they should consider to adjust the business sectors of the Vietnamese company if needed.
Step 1: Foreign investors register to contribute capital, purchase shares/capital contributions to the company
Submission place: The Department of Planning and Investment.
The process: If the capital contribution, shares purchase, capital contribution purchase of foreign investors comply with the regulations on investment forms and foreign capital contribution, within 15 days from the date of receipt of the valid application, the Department of Planning and Investment will grant a written announcement. If the application does not satisfies conditions, the Department of Planning and Investment will grant a written announcement providing reasons and explanation.
Step 2: Transfer the shares, capital contributions and change the shareholders or members of the company
Foreign investment services in Viet An Law Firm:
Foreign investors looking for advice on legal issues and procedures to establish foreign-owned logistics company in Vietnam as well as other issues related to foreign investment and enterprises in Vietnam, please feel free to contact Viet An Law Firm for more information!
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