FOREIGN INVESTORS PROVIDING CARGO TRANSPORTATION SERVICES BY SEA

FOREIGN INVESTORS PROVIDING CARGO TRANSPORTATION SERVICES BY SEA

Vietnam is a country with a coastline stretching from North to South with many developed seaports. Therefore, Vietnam has great advantages in developing its shipping business by sea. Sea transport is a transport activity that involves the use of marine transport infrastructure and facilities. Sea transport or sea transport is a form of transporting goods through the use of sea facilities and infrastructure to serve transportation activities. Depending on the route, type of cargo, means of transportation are boats and means of loading and disassembling goods such as crane trucks. In addition, with the trend of international trade business integration, the freight industry between countries is also growing. Traders will often choose the form of transporting goods via sea with advantages such as transporting large volumes of goods, shortening a lot of time. Therefore, foreign investors also pay great attention to investing in the business of sea freight services in Vietnam today.

Conditions for investors providing goods transportation services by sea

Legal bases for investors providing sea freight services

• Vietnam’s schedule of commitments to join the World Trade Organization (WTO);
•  ASEAN Framework Agreement on Services (AFAS);
• Vietnam-Japan Economic Partnership Agreement (VJEPA);
•  Vietnam-Korea Free Trade Agreement (VKFTA);
• EU-Vietnam Free Trade Agreement (EVFTA);
• Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP);
• Decree No. 160/2016/ND-CP Stipulating conditions for shipping business, provision of ship agency services and towing services;
• Decree No. 163/2017/ND-CP Regulating logistics service business;
• Decree No. 147/2018/ND-CP Amending and supplementing some articles of Decrees regulating business conditions in the maritime sector.

Provisions of agreements on the provision of sea freight services

1. Establishment of companies operating fleets flying the Vietnamese flag

• It is allowed to establish a joint venture in which the capital contribution of the foreign side does not exceed 49% of the legal capital. Foreign seafarers may work on ships flying the Vietnamese flag (or registered in Vietnam) owned by joint venture enterprises in Vietnam but the total number must not exceed 1/3 of the ship’s boundary. The first captain or deputy must be a Vietnamese citizen.
• For EVFTA: Foreign service providers are allowed to establish joint ventures in which the foreign side’s capital contribution does not exceed 70% of the legal capital of the joint venture.
• For AFAS: Cargo transport, except domestic transport (CPC 7212) is allowed to establish a joint venture in which the capital contribution of the foreign side does not exceed 70% of the legal capital of the joint venture.

2. Other forms of commercial presence to provide international shipping services: Foreign shipping companies can establish 100% foreign-invested enterprises

Procedures for investors providing goods transportation services by sea

Step 1: Apply for the Certificate of registration  of investment in the provision of goods transport services by sea

Step 2: Apply for the Certificate of registration  of an enterprise providing goods transport services by sea

Step 3: Publish business registration information on the National Portal

Step 4: Enterprises engrave seals and announce seal samples

 

Dossier of investors providing freight services by sea

Step 1: Apply for the Certificate of registration  of investment in the provision of goods transport services by sea

1. A written request for implementation of  an investment  project on the provision of goods transport services by sea;
2. Copy of ID card or passport  for  individual investors and documents confirming  legal status for  institutional investors;
3. A document of the proposal for an investment project on the provision of cargo transport services by sea includes detailed contents;
4. Copies of documents on financial matters of the foreign investor;
5. Documents on land use needs, site lease agreements or site use rights for the implementation of investment projects.

Applicant Agency: Department of Planning and Investment or Management Board of industrial parks, export processing zones, economic zones and hi-tech parks if the investment projects are in such zones.

Time: For investment projects not subject to investment policy decisions, the time limit for returning dossiers is 15-20 working days from the date of receipt of complete dossiers

Step 2: Apply for the Enterprise Registration Certificate providing goods transport services by sea

1. An application for registration of an  enterprise providing goods transport services by sea;
2. The company’s charter contains the code of business lines of  goods transportation services by sea;
3. List of company members/List of founding shareholders and shareholders being foreign investors;
4. Copies of the following documents:

• ID card, passport of individual members;
• ID card, passport of the authorized representative;
• A certified copy of the Enterprise Registration Certificate for members of foreign organizations.

Investment registration Certificate with foreign investors as prescribed;

Written authorization if the enterprise does not directly apply.

Applicant agency: Enterprise Registration Office under the Department of Planning and Investment

Time: 03 – 06 working days from the date of receipt of complete and valid documents

Step 3: Publish business registration information on the National Portal

   Information on business registration must be published on the National Enterprise Registration Portal within 30 days from the date of issuance of the Certificate of Business Registration. According to Clause 1 Article 26 of Decree 50/2016/ND-CP, in case an enterprise fails to announce or does not publish on time the prescribed enterprise registration contents on the National Business Registration Portal, such enterprise will be fined from VND 1,000,000 to VND 2,000,000.

Step 4: Enterprises engrave seals and announce seal samples

Enterprises can authorize or engrave the seal themselves and notify the Department of Planning and Investment of their company’s seal samples. Enterprises can decide for themselves the form, quantity, and content of the seal but must show the name and enterprise code. After receiving the notice of the enterprise’s seal samples, the Business Registration Office will issue a receipt to the enterprise, post the enterprise’s notice on the National Business Registration Portal, and issue a notice of posting information about the enterprise’s seal samples to the enterprise.

Note on applying for a Certificate of eligibility for provision of goods transport services by sea

According to Decree No. 160/2016/ND-CP stipulating conditions for sea transport business, provision of ship agency services, and towing services, in the past, when foreign investors who want to officially come into operation, they must apply for a Certificate of eligibility for provision of cargo transport services by sea. The issuance of the Certificate of business eligibility will be submitted to the Vietnam Maritime Administration.

However, until  Decree No. 147/2018/ND-CP Amending and supplementing some articles of the Decrees regulating business conditions in the maritime sector under Clause 6, Article 3, it is stipulated that “Enterprises dealing in shipping, shipping agency services and towing services established before the effective date of this Decree may continue to be allowed activity; from the effective date of this Decree, enterprises must fully satisfy the conditions on shipping business, ship agency services and ship towing services specified in this Decree“.

Thus, foreign investors providing cargo transport services by sea only need to fully satisfy the conditions of sea transport business, ship agency services, and ship towing services as prescribed, but do not need to apply for a Certificate of eligibility for the provision of goods transport services by sea. 

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