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LOGISTICS COMPANY IN VIETNAM

LOGISTICS COMPANY IN VIETNAM

As regulated in Article 5, logistic services Business entities engaging in the principal logistic services must satisfy all the following conditions:

a. The enterprise must have lawful business registration in accordance with the law of Vietnam. This means the enterprise registered in accordance with Law on Enterprise 2005 and Investment law 2005 are permitted to do this business and This Decree limits on traders are households, individuals business to avoid the economic sectors of small business services. Therefore, the enterprise (possibly joint venture, 100% foreign capital) has been granted a certificate of business registration (or investment license) at the competent authority in accordance with the legal provisions of Vietnam enterprise law and investment law are permitted to do logistics business.

b. Conditions apply separately for each service group.

- There must be adequate facilities, equipment and working facilities which ensure technical [standards] and safety criteria, and there must be a team of staff who satisfy the requirements.

- For business on related logistics services group requires businesses to comply with the conditions of the transportation business under the provisions of the law of Vietnam.

c. Foreign business entities, in addition to satisfying the conditions stipulated in clause 2 of this article, shall only be permitted to engage in logistic services business when they also satisfy the following specific conditions:

- In the case of business in unloading goods, a foreign business entity shall only be permitted to establish a joint venture company in which the capital contribution ratio of the foreign investor does not exceed 50%;

- In the case of business in warehousing services, the foreign business entity shall be permitted to establish a joint venture company in which the capital contribution ratio of the foreign investor does not exceed 51%; this restriction shall terminate in year 2014;

- In the case of business in transportation agency services, the foreign entity shall be permitted to establish a joint venture company in which the capital contribution ratio of the foreign investor does not exceed 51%, and as from year 2014 the establishment of a joint venture company shall not be restricted in terms of the capital contribution ratio of the foreign investor;

- In the case of business in other subsidiary services, the foreign business entity shall be permitted to establish a joint venture company in which the capital contribution ratio of the foreign investor does not exceed 49%; this restriction shall be 51% as from year 2010 and [this restriction] shall terminate in year 2014.

   In addition, the traders is enterprise with foreign investment capital, have business on logistics services to perform activities having market access restriction or restrict market access or national treatment limitations in accordance with the commitments of Vietnam in the international treaties to which Vietnam is a member, they must comply with such restrictions. For example, in Vietnam's commitments to the WTO, the framework of ASEAN economic cooperation with the time schedule is very specific rules, the services of logistics is mainly by industry specific and time can be defined in Article 5, Article 6, Article 7 of this Decree.

     Article 6 Decree No. 140/2005/NĐ-CP provides that: “Any business entity engaging in logistic services relating to transportation must satisfy the following conditions: The enterprise must have lawful business registration in accordance with the law of Vietnam; Compliance with the conditions applicable to transportation business as stipulated by the law of Vietnam; Foreign business entities engaging in logistic services business, in addition to satisfying the conditions stipulated in clause 1, 2 of this article, shall only be permitted to engage in logistic services business when they also satisfy the following specific conditions:

- In the case of business in maritime transportation services, a foreign business entity shall only be permitted to establish a fleet operating joint venture company as from year 2009 in which the capital contribution ratio of the foreign investor does not exceed 49%; and shall be permitted to establish an international sea transportation services joint venture in which the capital contribution ratio of the foreign investor does not exceed 51%, and this restriction shall terminate in year 2012;

- In the case of business in internal waterway transportation services, a foreign business entity shall only be permitted to establish a joint venture company in which the capital contribution ratio of the foreign investor does not exceed 49%;

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

- In the case of rail transportation business services, a foreign business entity shall only be permitted to establish a joint venture company in which the capital contribution ratio of the foreign investor may not exceed 49%;

- In the case of business in road transportation services, a foreign business entity shall be permitted to establish a joint venture company in which the capital contribution ratio of the foreign investor does not exceed 49%; and this restriction shall be 51% as from year 2010;

- It shall not be permitted to provide pipeline conduit services, except where an international treaty of which the Socialist Republic of Vietnam is a member contains some other provision.

     Article 7 of Decree provides that any business entity engaging in the other logistic services must satisfy all the following conditions: “The enterprise must have lawful business registration in accordance with the law of Vietnam; Foreign business entities engaging in logistic services business shall only be permitted to conduct business in [other] logistic services when they satisfy the following specific conditions:

- In the case of business in services of technical checks and analysis: In the case of services provided in order to exercise authority of the Government, they may only be provided in the form of a joint venture after three years or in other forms after five years, as from the date on which the private enterprise is permitted to conduct business in such services. It shall not be permitted to conduct business in services of acceptance testing of, and issuance of certificates for transportation facilities. The provision of services of technical checks and analysis shall be restricted [not permitted] in geographical locations as determined by the competent body for reasons of national defences and security.

- Business in services being posts, wholesale commercial services and retail commercial services shall be subject to discrete regulations of the Government.

- It shall not be permitted to provide other subsidiary transportation services, unless an international treaty of which the Socialist Republic of Vietnam is a member contains some other provision.”

    Thus, enterprises implement the business on logistics services must comply with the above provisions about doing business logistics of Decree No.140/2005/NĐ-CP.

The Client’s Contract with Us:

HN: Hanoi@lhdfirm.com  or Phone: +848 22416866

HCM: all@lhdfirm.com  or Phone: +84963 858 131

 

LHD Law Firm

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LHD LAW FIRM IN HO CHI MINH
Addr:  HP Tower, 60 (Floor 7) Nguyen Van Thu Street, Dakao Ward, District 1, HCM City, Viet Nam
Tel:
+842822416866 or +842822446739
Email: all@lhdfirm.com 

LHD LAW FIRM IN HA NOI
Addr: Anh Minh Tower, (Floor 4) 36 Hoang Cau Street, O Cho Dua Ward, Dong Da District, Ha Noi City, Viet Nam
Tel:  +842462604011 or +84911633168 

 

LOGISTICS COMPANY IN VIETNAM

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