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Foreign investors establish express delivery service company
The increasing demand for domestic and international express delivery has attracted many foreign investors to participate in this field. But how can foreign investors establish an express delivery service company in Vietnam? Are there any conditions or procedures required to establish a company to provide this service? Let’s find out with Siglaw in this article!
Legal basis for foreign investors to establish express delivery service companies
Vietnam’s commitments in international treaties such as WTO, AFAS, VJEPA, VKFTA, CPTPP, EVFTA;
Law No. 61/2020/QH14, Investment Law;
Law No. 59/2020/QH14, Enterprise Law;
Law No. 49/2010/QH12, Postal Law;
Decree 31/2021/ND-CP detailing and guiding the implementation of a number of articles of the Investment Law;
Decree 01/2021/ND-CP on business registration;
Decree 47/2011/ND-CP detailing the implementation of a number of contents of the Postal Law;
Decree No. 25/2022/ND-CP amending and supplementing a number of articles of Decree No. 47/2011/ND-CP of the Government detailing the implementation of a number of contents of the Law Postal;
Decision 27/2018/QD-TTg promulgating the system of economic sectors in Vietnam;
Express delivery service industry code
Industry code according to Decision 27/2018/QD-TTg promulgating the system of economic sectors of Vietnam, foreign investors can do business in express delivery services according to the industry code below:
Industry code 5310: Postal services
This group includes: Postal activities according to common and unified regulations. Postal activities use common infrastructure to receive, sort, pack and deliver letters, postcards, newspapers, magazines, advertising publications, postal items, parcels, goods or documents according to routes and regions.
This group also includes: Other services to directly support this activity such as:
Receive, sort, transport and distribute (domestic or international) letters, postal items, parcels by postal services through the postal network regulated by unified service agreements. This activity can use one or more modes of transport, can use means of transport owned by the post office or public transport;
Picking up letters or postal items from public post boxes or postal facilities;
Distributing and delivering letters, postal items and parcels.
Excluding: Postal transfers, postal savings and postal money transfers are classified in group 64190 (Other monetary intermediation activities).
Industry code 5320: Couriers
This group includes: Receiving, sorting, transporting and delivering (domestic or international) letters, postal items and parcels by enterprises not operating under a general service agreement. This activity may use one or more modes of transport, which may use the enterprise’s own transport or public transport;
Distributing and delivering letters, postal items and parcels.
This group also includes: Door-to-door delivery services.
Exclusions: Freight transport by modes of transport classified in groups 4912 (Rail freight transport), 4933 (Road freight transport), 5012 (Coastal and ocean freight transport), 5022 (Inland waterway freight transport), 5120 (Air freight transport).
Conditions for foreign investors to establish express delivery service companies
Based on international treaties that Vietnam participates in, foreign investors wishing to invest in the express delivery sector, specifically postal services (CPC 7511), delivery services (CPC 7512), must meet the following market access conditions:
WTO, AFAS, VJEPA, VKFTA, CPTPP conditions
Vietnam only has regulations for delivery services (CPC 7512**): no restrictions.
* Express delivery services, i.e. services including collection, sorting, transportation and delivery domestically or internationally:
(a) Information in written form, expressed in any physical form, including:
– Hybrid mail service;
– Direct mail.
Except for handling items that are information in written form with a service fee lower than 10 times the fee for a standard domestic letter at the first weight level of 9 USD internationally; provided that the total weight of these items does not exceed 2000 grams.
(b) Packages (including books and catalogues) and other goods.
* Handling of items without a recipient address (non-addressed items).
Services and service suppliers of Members shall be accorded treatment no less favorable than that accorded to Vietnam Post or its subsidiaries with respect to competitive activities.
EVFTA Conditions
Appendix 8-B: Postal services (CPC7511** and 7512**) (Except for public services and dedicated services) are unrestricted.
Services and service suppliers of Members shall be accorded treatment no less favorable than that accorded to Vietnam Post or its subsidiaries with respect to competitive activities.
Vietnamese legal basis
Pursuant to Section B of Appendix I of Decree 31/2021/ND-CP, postal services are a conditional market access industry for foreign investors.
Form of express delivery service business for foreign investors
Establishing foreign-invested economic organizations;
Contributing capital, purchasing shares, purchasing capital contributions of economic organizations providing express delivery services;
Investing in the form of BCC contracts;
Joint ventures with domestic investors;
Procedures for establishing a company providing express delivery services for foreign investors
Step 1: Apply for an Investment Registration Certificate (IRC)
Application for an Investment Registration Certificate:
Application for an investment project to operate an express delivery service, including a commitment to bear all costs and risks if the project is not approved;
Documents on the legal status of the investor: ID card, passport, or identity card for individual investors; a copy of the Certificate of Establishment or other equivalent document confirming the legal status of an institutional investor with consular confirmation
Documents proving the financial capacity of the investor, including at least one of the following documents: the investor’s financial statements for the last 2 years; the parent company’s commitment to financial support; the financial institution’s commitment to financial support; guarantee of the investor’s financial capacity; other documents proving the investor’s financial capacity;
The proposal for an investment project to operate an express delivery service business includes the following main contents: investor or form of investor selection, investment objectives, investment scale, investment capital and capital mobilization plan, location, duration, implementation progress, information on current land use status at the project implementation location and proposed land use needs (if any), labor needs, proposed investment incentives, impacts, socio-economic efficiency of the project, preliminary assessment of environmental impacts (if any) according to regulations of law on environmental protection.
In case the law on construction stipulates the preparation of a pre-feasibility study report, the investor may submit a pre-feasibility study report instead of an investment project proposal;
In case the investment project does not request the State to allocate land, lease land, or permit the change of land use purpose, a copy of the land use rights document or other document determining the right to use the location to implement the investment project shall be submitted;
Explanation of the technology used in the express delivery service investment project for projects subject to appraisal and consultation on technology according to the provisions of the law on technology transfer;
BCC contract for investment projects in the form of BCC contracts;
Other documents related to the investment project, requirements on conditions and capacity of the investor according to the provisions of law (if any).
Number of documents: 01 set
The investment registration agency shall issue the Investment Registration Certificate to the investor within 15 days from the date of receipt of valid documents
Issuing authority: Provincial Department of Planning and Investment
Step 2: Apply for an Enterprise Registration Certificate (ERC)
After being granted an Investment Registration Certificate, the investor shall carry out the procedure for applying for an Enterprise Registration Certificate by one of the following three methods:
Registering the enterprise directly at the Business Registration Office;
Registering the enterprise via postal service;
Registering the enterprise via the electronic information network.
The dossier includes the following documents:
Application for establishment of an express delivery service business;
Company charter;
List of members or shareholders of the company (if it is a limited liability company with two or more members or a joint stock company);
Copies of legal documents of members, shareholders, and representatives (For individual investors: Copy of citizen identification card, identity card, passport or other legal personal identification of members or founding shareholders; For investors being economic organizations: Copy of the decision to establish the company, business registration certificate or other equivalent documents of the organization; copy of valid identity card or passport of the legal representative of the organization);
Investment registration certificate
Other necessary documents (if any);
Within 03 working days from the date of receipt of the dossier, the Business Registration Authority shall be responsible for reviewing the validity of the business registration dossier and issue business registration; in case the dossier is invalid, the Business Registration Authority must notify in writing the content that needs to be revised or supplemented to the FDI enterprise founder. In case of refusal to register the enterprise, it must notify in writing the FDI enterprise founder and state the reason.
Issuing authority:
At the provincial level: Business Registration Office under the Department of Planning and Investment
The Business Registration Office can organize points to receive dossiers and return results under the Business Registration Office at different locations in the provincial area;
At the district level: Finance – Planning Office under the District People’s Committee
Step 3: Apply for a Business License for Express Delivery Services
According to the Postal Law, enterprises providing postal services with a receiving address with a single item weighing up to 02 kilograms (kg) must have a sub-license for postal services (hereinafter referred to as a postal license) issued by a competent state agency in charge of postal services.
The application for a postal license is made into 01 original set, including:
Application for a postal license (according to the form in Appendix I);
A copy of the certificate of registration of postal business or certificate of investment in postal business in Vietnam, stamped and certified by the enterprise itself, and the enterprise is responsible for the accuracy of the copy;
The charter of organization and operation of the enterprise (if any);
Business plan;
Sample contract for provision and use of postal services in accordance with the provisions of the law on post;
Sample of logo, trademark, special symbol or elements of the enterprise’s identification system shown on postal items (if any);
Postal service price list in accordance with the provisions of the law on post;
Postal service quality standards announced and applied in accordance with the provisions of the law on post;
Regulations on the limit of liability for compensation for damages in case of damage, procedures Resolve customer complaints, the time limit for resolving complaints is in accordance with the provisions of the law on postal services;
Agreement with other enterprises, foreign partners in Vietnamese, in case of cooperation in providing one, some or all stages of the postal service for which a license is requested;
Documents that have been consularized proving the legal status of the foreign partner as prescribed in Point k, Clause 2 of this Article.
Franchise contract with the enterprise providing postal services (if any).
Within 30 days from the date of receipt of valid documents, the competent authority shall issue a postal service business license to the requesting enterprise.
Note: Postal licenses are granted for a term of no more than 10 years. Therefore, at least 30 days before the license expires, the investor shall carry out procedures for re-issuance of the postal license for extension.
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