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Establishing a foreign-invested logistics company
Some notes when investing in establishing a foreign-invested logistics company
- Logistics service business is a conditional business investment sector listed in Law No. 03/2016/QH14, therefore, foreign investors when investing in establishing a logistics business must meet the prescribed conditions in Vietnamese law.
- According to the current Vietnamese law, a logistics company with 100% foreign capital will only be granted a business registration license if it is engaged in the business of shipping, warehousing, aircraft maintenance and repairing, delivery services and freight services. As for other industries, legal entities are only allowed to establish foreign-invested logistics companies in Vietnam with a capital contribution ratio of 49% – 51% and joint ventures with companies in Vietnam.
- In addition, enterprises that want to conduct business in areas including inspection and certification services for means of transport and pipeline transport need to know that foreign investors are not allowed to do business in these sectors.
- Foreign investors when establishing a 100% foreign-invested logistics company in Vietnam need to prove both financial capacity, ability to operate the company, health and legal citizenship. of countries that belong to the WTO or have signed trade agreements with Vietnam.
Conditions to a foreign-invested logistics company
According to current Vietnamese law, logistics services are a conditional business sector. Accordingly, foreign investors who want to establish a foreign-invested logistics enterprise must meet the international commitments that Vietnam has joined, but also must comply with the investment and business conditions prescribed by the Vietnamese law for this service.
According to the Specific Commitments on Services of Vietnam upon joining the WTO and Decree 163/2017/ND-CP, depending on each logistics activity, the limit on the percentage of foreign capital contribution is different. Investors can refer to some of the following industries:
- Industries that do not limit the maximum capital contribution ratio of foreign investors
- Customs clearance service under sea transport support service
- Bill of lading checking services, freight brokerage services, cargo inspection, sampling and weighing services; receiving and accepting services; transport document preparation service
- Industries with a maximum capital contribution ratio of 100% of foreign investors
- Warehousing Service
- Cargo agency service
- Delivery service
- Industries with a maximum capital contribution ratio of 49% – 51% of foreign investors
- Cargo transportation services of sea transport services (except inland transportation) (49%)
- Freight services (railway) (49%)
- Freight services (inland waterways) (49%)
- Container loading and unloading service (support for sea transportation) (50%)
- Container handling services belong to services that support all modes of transport, except services provided at airports (50%)
- Freight services (road) (51%)
- In case the investor intends to provide many logistics services, the capital contribution rate of the foreign side will be the lowest in the activities expected to be implemented. For example, if an investor intends to provide container handling services, warehousing services and freight services (by road), the maximum foreign capital contribution is 50%. In addition, there are a number of logistics activities that foreign-owned logistics companies are not allowed to perform such as pipeline transportation or for inspection and technical analysis, they are not allowed to provide inspection and certification services for means of transport.
Procedures for establishing a foreign-invested logistics company
In case of new establishment of a foreign-owned logistics company
Step 1: Foreign investors prepare dossiers of application for Investment Registration Certificate to establish foreign-invested logistics company
Enterprises need to prepare documents including:
- A written request for the implementation of a logistics investment project
- Copy of ID card, CCCD or passport with individual investor
- A copy of the certificate of establishment of a foreign-invested FDI logistics company or an equivalent document to confirm the legal status of the investor being an organization
- Proposing logistics investment project
- Copy of financial statements for the last 2 years or other equivalent documents
- Proposing land use needs
- Explanation of technology use (if any)
Within 15 working days after receiving the valid dossier, the Department of Planning and Investment will issue the Investment Registration Certificate.
Step 2: Prepare documents to establish FDI logistics company with foreign investment
A dossier of establishment of a foreign-invested logistics company includes:
- Application for registration of logistics business (according to the form)
- Enterprise’s regulations
- List of members of logistics companies
- Notarized copy of ID card/ CCCD/ Passport of individual members; a notarized copy of the enterprise registration certificate of the member being an organization; copy of ID card/ CCCD/ Passport of the legal representative of that organization
- Investment registration certificate for foreign investors
Within 03 – 05 working days from the date of receiving the valid application, the Business Registration Office of the Department of Planning and Investment will issue the Certificate of Business Registration.
Step 3: Announce business registration information
After being granted an enterprise registration certificate, a foreign-invested logistics company must make a public announcement on the national business registration portal and pay fees within 30 days from the date of obtaining the license to establish a logistics company with foreign capital.
Step 4: Engrave your company seals
Enterprises will decide the number and form of seals, choose one between the 2 options: self-implementation or authorization for law firms. Note, the seal must contain the business name and business code.
Incase of purchasing shares/capital to the Logistics company
In order not to have to apply for an Investment Registration Certificate, domestic investors need to ensure that the percentage of capital contributed to the Logistics company by foreign investors does not reach 100%.
Foreign investors only need to carry out the procedures for registration of capital contribution, share purchase, and capital contribution to the Logistics company at the Department of Planning and Investment. For activities that foreign investors are not allowed to carry out, it is necessary to consider and implement procedures to reduce business lines.
Step 1: Foreign investors prepare documents for registration of capital contribution, share/capital purchase to Logistics company
- The written registration for capital contribution, share purchase or capital contribution, showing the following contents: information about the Logistics company to which the foreign investor is expected to contribute capital, purchase shares/capital; rate of ownership of charter capital of foreign investors after capital contribution, purchase of shares/contributed capital.
- Copy of ID card, CCCD or passport for individual investors; a copy of the Certificate of Establishment of a logistics company with foreign capital or other equivalent document certifying the legal status of the investor being an organization.
In case the foreign investor meets the conditions on ownership ratio and investment form according to option of capital contribution or share/capital purchase according to the Schedule of Commitments and Vietnamese law, within 15 working days since the valid documents are received, the Department of Planning and Investment will notify in writing. If the application does not meet the above conditions, the Department of Planning and Investment will notify in writing and clearly state the reason.
Step 2: Carry out the procedures for transferring shares, contributed capital and changing shareholders and members
- Decision of the General Meeting of Shareholders on the transfer of shares;
- Minutes of the General Meeting of Shareholders on the transfer of shares;
- List of founding shareholders of joint-stock companies;
- Charter of the company (amended and supplemented);
- Share transfer contract;
- Minutes of liquidation of share transfer contract;
- Share certificates of company shareholders;
- Register of shareholders.
For a free consultation on FDI investment in Vietnam comprehensively, please contact:
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