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Established a branch of a foreign Logistics company in Vietnam
Logistics is an important and potential business in the context of globalization and economic integration. Logistics is the process of managing, coordinating, and implementing activities related to the transportation, storage, preservation, and distribution of goods from origin to destination. Logistics not only helps optimize costs, time, and quality for the supply chain but also increases efficiency and profits for businesses. According to a report by the Vietnam Logistics Association (VLA), Vietnam’s logistics market was worth about 40-42 billion USD in 2020, accounting for about 20-25% of GDP. However, Vietnam’s logistics industry still faces many difficulties and challenges, such as underdeveloped infrastructure, lack of professional human resources, high logistics costs, and lack of connection between logistics service providers. Therefore, establishing a branch of a foreign logistics company in Vietnam is a golden opportunity to exploit this potential market. Below, Siglaw would like to give some advice on establishing a branch of a foreign logistics company in Vietnam.
What is a branch of a foreign logistics company?
According to Clause 7, Article 3 of the 2005 Commercial Law, a branch of foreign traders in Vietnam is a dependent unit of foreign traders established and operated commercially in Vietnam under the provisions of Vietnamese law and international treaties to which Vietnam is a member.
Logistics services are commercial activities in which traders organize the implementation of one or more tasks including receiving goods, transporting, storing, carrying out customs procedures, other paperwork, customer consultation, packaging, marking, delivery, or other services related to goods as agreed by the customer to receive remuneration.
Thus, it can be understood that a branch of a foreign logistics company in Vietnam is a dependent unit of a foreign logistics company, established and operated commercially in Vietnam according to the provisions of Vietnamese law or according to international treaties to which Vietnam is a member. Branches of foreign logistics companies in Vietnam are responsible for performing activities related to the transportation, storage, preservation, and distribution of goods from the point of origin to the destination. Branches of foreign logistics companies in Vietnam also have rights and obligations according to Vietnamese law.
Conditions and duration of branch establishment license for a foreign logistics company in Vietnam
To be approved and granted a license to establish a foreign logistics company branch in Vietnam, traders need to meet the following conditions:
- Establishing and operating under the laws of countries and territories that participate in international treaties to which Vietnam is a member or recognized by these countries and territories;
- Having had at least 05 years of operation in the field in which the branch is intended to be established, from the date of establishment or registration;
- For cases where the business registration has a business term written on it, the remaining term on the business registration must be at least 1 year when applying for a license to establish a logistics company branch in Vietnam.
- The content and activities of the branch must be consistent with Vietnam’s open-door commitments in international treaties to which Vietnam is a member, with Vietnam’s culture and customs and its business lines logistics company.
The term of license to establish a branch of a foreign logistics company in Vietnam is 05 years (except in the case of a limited-term business registration license).
Procedures and documents to establish a branch of a foreign logistics company in Vietnam
To establish a branch of a foreign logistics company in Vietnam, the steps to follow are as follows:
- Prepare documents and apply for a license: After deciding to establish a branch in Vietnam, the foreign logistics company needs to prepare documents as required by state management agencies. The records include:
+ An application for a Branch Establishment License according to the form of the Ministry of Industry and Trade signed by an authorized representative of the foreign trader;
+ A certified copy of the parent company’s business registration certificate or equivalent documents that have been certified or consular legalized by Vietnamese diplomatic missions or consulates abroad;
+ A copy of the holding company’s audited financial statements for the most recent fiscal year or documents of equivalent value issued by foreign competent authorities to confirm and prove the existence and operations of foreign logistics companies in the most recent fiscal year;
+ Decision to appoint/recruit the branch head;
+ Copy of the contract to rent or use the branch’s working location
+ Copy of the branch’s operating charter;
+ Copy of ID card /Passport of the branch head.
These documents need to be translated into Vietnamese and notarized according to regulations. After having complete documents, the foreign logistics company needs to submit documents to the Ministry of Industry and Trade to apply for a license to establish a branch. Processing time is about 7 working days.
Establishing a branch of a foreign logistics company in Vietnam is a wise decision to exploit Vietnam’s potential logistics market. However, to establish a successful branch, foreign logistics companies need to research Vietnam’s legal, market, and competition regulations carefully. Foreign logistics companies must also carefully prepare documents and procedures to apply for licenses and business registration. In addition, foreign logistics companies need to build an effective business strategy that is suitable to the needs and culture of Vietnamese customers.
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