Vietnam Government always creates favorable conditions for foreign investors to conduct logistics services excluding inspection services, certificate granting for conveyances, transport auxiliary services, and other restrictions on transport related services. In Vietnam, there are 8 types of logistics services.

As of January 22, 2014, the Prime Minister of Vietnam issued Decision No. 169/QĐ-TTg approving the development scheme for logistics services in Vietnam’s transport sector by 2020 and orientation towards 2030. This scheme aims to enhance economic efficiency by increasing the exploitation and use of seaports. Furthermore, with a long-term developmental orientation also stated in such a scheme, logistics services are hoped to have developed into an important service industry, conceivably contributing 5-10% to Vietnam’s Gross National Product (GNP) by the year of 2030. In addition, Decision No. 169/QĐ-TTg proposed development solutions for transport infrastructure and international cooperation, as well as construction solutions for mechanisms and support policies.

Categories of Logistics services

Logistics services are deemed commercial activities and are stipulated as such in Vietnamese Commercial Law (2005). Concurrently, in Decree No. 163/2017/NĐ-CP issued by Vietnam Government in 2017, they are classified into three general categories of logistics services as follows:

• Main logistics services: loading and unloading, storage, warehousing, transportation agency, and other auxiliary services such as bill of lading checking, freight brokerage, goods inspection, etc.
• Logistics services related to transportation: air, railway, road, sea, inland waterway.
• Other Logistics services: technical inspection and analysis, postal, wholesale, retail trade and other transport support services.

Type of Logistics services

Concurrently, Decree 163/2017/ND-CP stipulates the conditions and limits of liability for traders providing logistics services (including foreign traders). In addition, Decree 163/2017/ND-CP also stipulates in detail the ratio of capital contribution in joint venture companies by foreign investors for each type of logistics service business.

Also stated in Decree No. 140/2007/NĐ-CP are certain conditions and liability limitations for logistics service providers (including foreign ones) and detailing capital contribution ratio in a joint venture company of foreign investors for each type of logistics service business.

1. Cargo transport services classified as sea transport services (except for inland transport)

• The foreign investor may establish companies operating ships flying the Vietnamese flag or contribute capital, purchase shares or capital contributions in enterprises, in which the capital contribution ratio of foreign investors shall not exceed 49%. The total number of foreign screw members working on the ship flying the Vietnamese flag (or registered in Vietnam) under the ownership of these companies in Vietnam shall not exceed 1/3 of the ship’s personnel. Captain or first mate must be a Vietnamese citizen.
• The foreign sea transport company may establish an enterprise or contribute capital, purchase shares or capital contributions to enterprises.

2. Container handling services classified as auxiliary services for sea transport (some areas may be used exclusively for the provision of services or procedures for issuance of licenses may be completed in these areas)

The foreign investor may establish an enterprise or contribute capital, purchase shares or capital contributions in enterprises, in which the capital contribution ratio of foreign investors shall not exceed 50%. The foreign investor may establish a commercial presence in Vietnam under a business cooperation contract.

3. Container handling services classified as auxiliary services for multimodal transport, except for services provided at airports

The foreign investor may establish an enterprise or contribute capital or purchase shares or capital contributions in enterprises, in which the capital contribution ratio of foreign investors shall not exceed 50%.

4. Customs clearance services classified as auxiliary services for sea transport

The foreign investor may establish an enterprise or contribute capital or purchase shares or capital contributions in enterprises, including capital contributed by domestic investors. The foreign investor may establish a commercial presence in Vietnam under a business cooperation contract.

5. Other services including bill of lading inspection, cargo brokerage, cargo inspection, sampling and weighing services; goods receipt and acceptance services; and preparation of transport documents

The foreign investor may establish an enterprise or contribute capital or purchase shares or capital contribution in enterprises, including capital contributed by domestic investors.

6. Cargo transport services classified as inland waterway transport services or cargo transport services classified as rail transport services

The foreign investor may establish an enterprise or contribute capital or purchase shares or capital contributions in enterprises, in which the capital contribution ratio of foreign investors does not exceed 49%.

7. Cargo transport services classified as road transport services

The foreign investor may provide such services under a business cooperation agreement or establish an enterprise or contribute capital or purchase shares or capital contributions in enterprises, in which the capital contribution ratio of foreign investors does not exceed 51%… All drivers of the enterprise must be Vietnamese citizens.

8. Technical inspection and analysis services

• Regarding the services provided to exercise the authority of the Government, they may be provided by an enterprise that is invested in by a domestic investor after three years or by an enterprise in which foreign investment is not limited after five years from the date on which the private service provider is allowed to provide such services.
• It is not allowed to provide vehicle inspection services and issue certificates to such vehicles.
• The provision of technical analysis and inspection is limited in the areas determined by the competent authority for national defense and security reasons.

Kết luận

However, it should be noted that in case foreign investors are subject to the application of international treaties with different provisions on logistics service business conditions, the foreign investor may select to apply investment conditions specified in one of such treaties.