Logistics services are one of the fastest-growing industries in Vietnam, attracting significant interest from both domestic and international investors. So how are foreign investments in logistics services regulated? The following article by Ky Vong Viet Law provides insights.
Definition of Logistics Services Under the 2005 Commercial Law
According to Article 233 of the 2005 Commercial Law, logistics services include the following activities:
- Receiving goods
- Transportation
- Warehousing
- Customs procedures and other documentation, customer consultation
- Packaging
- Labeling and marking
- Delivery
- Other services related to goods as agreed upon with customers for remuneration
Conditions for Foreign Investment in Logistics Services
1. Conditions Based on Vietnam’s WTO Commitments
According to Vietnam’s WTO Schedule of Specific Commitments, logistics services include the following CPC codes:
- Container handling services (excluding services provided at airports) (Part of CPC 7411)
- Must be provided through a joint venture with a Vietnamese partner
- Foreign ownership must not exceed 50%
- Storage and warehouse services (CPC 742) and Freight forwarding services (CPC 748)
- No restrictions, allowing foreign investors to:
- Establish a 100% foreign-owned company in Vietnam, or
- Form a joint venture with a Vietnamese partner
- No restrictions, allowing foreign investors to:
- Rail freight transport services (CPC 7112)
- Must be provided through a joint venture with a Vietnamese partner
- Foreign ownership must not exceed 49%
- Road freight transport services (CPC 7123)
- Must be provided through a joint venture with a Vietnamese partner
- Foreign ownership must not exceed 51%
- 100% of the drivers must be Vietnamese citizens
- Other services (Part of CPC 749)
- Foreign investors may provide freight brokerage or other related services if they:
- Establish a joint venture with a Vietnamese partner
- Foreign ownership must not exceed 49%
- This limit increases to 51% after three years from WTO accession
- After four more years, the restriction on foreign ownership will be removed
- Foreign investors may provide freight brokerage or other related services if they:
2. Conditions Based on Vietnamese Law
- Maritime freight transport services (excluding domestic transport)
- Foreign investors must:
- Establish a company operating a fleet flying the Vietnamese flag or invest in a local enterprise
- Foreign ownership must not exceed 49%
- The total number of foreign crew members on Vietnam-flagged ships must not exceed one-third of the crew
- The captain or chief mate must be a Vietnamese citizen
- Foreign investors must:
- Maritime container handling services
- Foreign investors may:
- Establish a company or invest in an existing enterprise
- Foreign ownership must not exceed 50%
- Establish a commercial presence in Vietnam through a business cooperation contract
- Foreign investors may:
- Customs clearance services for sea transport
- Foreign investors may:
- Establish a company or invest in an existing enterprise with domestic capital
- No restriction on foreign ownership
- Establish a commercial presence in Vietnam through a business cooperation contract
- Foreign investors may:
- Other related services (e.g., waybill verification, freight brokerage, cargo inspection, sample collection, and document preparation)
- Foreign investors may:
- Establish a company or invest in an existing enterprise with domestic capital
- No restriction on foreign ownership
- Foreign investors may:
- Inland waterway and rail freight transport services
- Foreign investors may:
- Establish a company or invest in an existing enterprise
- Foreign ownership must not exceed 49%
- Foreign investors may:
- Road freight transport services
- Must be conducted through a business cooperation contract
- Foreign investors may:
- Establish a company or invest in an existing enterprise
- Foreign ownership must not exceed 51%
- 100% of the company’s drivers must be Vietnamese citizens
- Technical analysis and inspection services
- Services that require government authority must be provided through an enterprise where domestic capital accounts for the majority after three years or no restrictions on foreign ownership after five years
- Foreign investors are not permitted to provide certification and inspection services for transportation vehicles
- Operations in security-sensitive geographic areas may be restricted
3. Conditions Under Other International Agreements
In addition to WTO commitments and Vietnamese law, foreign investors in logistics services should also consider regulations under the following international agreements based on their nationality:
- ASEAN Comprehensive Investment Agreement
- ASEAN Framework Agreement on Services (10th Package)
- Vietnam-Japan Economic Partnership Agreement (VJEPA)
- Vietnam-Korea Free Trade Agreement (VKFTA)
- Vietnam-EU Free Trade Agreement (EVFTA)
- Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)
(For more information, visit the official website of the National Foreign Investment Information System.)
Procedures for Establishing a Logistics Business in Vietnam
A. Investment Registration Certificate (IRC) Application
For individual investors, the required documents include:
- Investment project proposal
- Proof of financial capacity
- Power of attorney for application submission
- Copy of investor’s passport
- Bank statement showing funds equivalent to or exceeding the planned investment
- Lease agreement for the project location
- Land use rights certificate (if using private property as business premises)
- Building permit and fire safety certificate (if using a commercial office building)
For organizational investors, additional documents are required:
- Business registration certificate of the foreign investor
- Passport of the legal representative of the foreign investor
- Decision appointing a representative to manage the investment
All foreign-issued documents must be legalized and notarized (except for passports).
B. Enterprise Registration Certificate (ERC) Application
After obtaining the IRC, investors must apply for an ERC. Required documents vary based on the company structure:
For single-member LLCs:
- Business registration application
- Company charter
- Passport of the legal representative
- Investment registration certificate
- If the investor is an entity, additional documents such as business registration and authorized representative’s passport are required
For multi-member LLCs or joint-stock companies:
- Business registration application
- Company charter
- List of members/shareholders
- Investment registration certificate
- Relevant documents for each investor (individual or organization)
Immediate Tasks After Establishment
- Registering with the tax authorities
- Opening a bank account
- Obtaining business licenses if required
- Fulfilling reporting obligations to regulatory agencies
By following these regulations and procedures, foreign investors can successfully establish and operate logistics businesses in Vietnam.
