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Vietnam opened more Market to FDI in Logistics Business

The foreign ownership limits applicable to certain logistics related services are scheduled out by the WTO Commitments of Vietnam and Decree 140/2007 on Logistics Services, according to which:

Before 11 January 2014, to most of the logistics related services, a foreign investor cannot incorporate a wholly foreign invested company but only a Joint Venture Company with a Vietnamese party. The proportion of foreign investment shall vary according to the specific services provided by the logistic service provider.

From 11 January 2014 on, the market is more opened to Foreign Investors, with various form and levels in the three groups of services as belows:

Principal logistic services

Logistic services relating to transportation

Other related logistic services 

Group of Principal Logistic Services

(a)     For the business in arranging pickup and loading of goods, including loading goods into containers, the capital contribution ratio of the foreign investor in the JVC does not exceed 50%;

(b)  For the business in Goods warehousing and storage services, including the business of warehousing in containers and storage for processing raw materials and equipment - it is possible to invest 100% of FDI;

(c)  For the business in Transportation agency services, including agency activities of conducting customs procedures and preparing plans for unloading goods - the foreign investor can only invest in under the form of JVC but not be restricted in terms of the capital contribution ratio of the foreign investor;

(d)  For the business in 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logistic process; activities being reprocessing of goods returned by clients, reprocessing of goods in storage and of out of-date goods and redistribution of such goods; and activities being leasing out and hire purchase of containers - the foreign investor can only invest in under the form of JVC but not be restricted in terms of the capital contribution ratio of the foreign investor.

 

Group of Logistic Services Relating to Transportation

(a)   For the business in maritime transportation services - Foreign Investors are currently permitted to establish 100% foreign invested company. However, the FDI company trading in maritime transportation services is only permitted to carry out activities as indicated below:

1.     Marketing and sales maritime transport services through direct contact with customers, from quotation to invoicing;

2.      Acting on behalf of the cargo owners;

3.     Provision of required business information;

4.      Preparation of documentation concerning transport documents including customs documents, or other documents related to the origin and character of the goods transported; and Provision of maritime transport services including cabotage services by Vietnamese flagged vessels for the supply of integrated transport services.

5.      Acting on behalf of the company, organising the call of the ship or taking over cargoes when required;

6.  Negotiate and sign contracts for road, rail, inland waterways transportation related to cargoes transported by the company.

(b)   For the business in internal waterway and/or rail transportation services - the capital contribution ratio of the foreign investor in the JVC does not exceed 49%;

(c)   Aviation transport business services shall be implemented in accordance with the Law on Civil Aviation of Vietnam;