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PERSONNEL CONDITIONS FOR FOREIGN-OWNED LOGISTICS COMPANIES IN VIETNAM
When setting up a logistics company in Vietnam, investors will have to comply with general conditions for foreign investors as well as industry-specific conditions. Logistics is a specific industry in Vietnam, so it will require a lot of strict conditions for each specific item. Especially personnel conditions. So what are the conditions for employees of foreign-owned logistics companies in Vietnam, let’s find out in the article below.
The level of market access, the level of investment openness in the logistics industry in Vietnam for foreign investors.
Cushman &Wakefield’s 2022 survey of more than 200 senior representatives of the world’s top investment firms on which countries are prioritized for logistics investment. As a result, Vietnam ranked first and second (equivalent to nearly 80% of the votes) in the investment target of the above-mentioned representatives. In addition, although investment yields tend to decrease, the proportion of investors who think that the logistics industry still does not have enough supply to meet the market is not low, specifically 35%.
The interest of foreign investors in the logistics sector in Vietnam continues to show large numbers. One of the foreign countries interested in investing in logistics in Vietnam are businesses from the United States. As noted by the Ministry of Industry and Trade in August 2023, the United States is interested in investing first in port infrastructure, logistics centers specializing in agricultural products, aviation or chemicals. Therefore, on 01/08/2023, the Department of European-American Market (Ministry of Industry and Trade) had an online seminar with the content “Increasing the competitiveness of Vietnam’s logistics activities with the US market.
According to Mr. Tran Thanh Hai (Deputy Director General of the Import-Export Department), Vietnam’s import and export activities are negatively affected by inflation and reduced demand for logistics in the world. Vietnam Vietnam joins the WTO, has a policy of opening the market for logistics services to foreign companies, helping to attract almost all major logistics companies in the world to Vietnam to operate. Logistics services are a very broad industry, from receiving, transporting, warehousing, warehousing, customs clearance, other paperwork, customer consulting, packaging, marking, delivery or other services related to goods as agreed with customers. So the level of market opening is also different. For example: passenger transport (except domestic transport), Vietnam allows foreign investors to establish joint ventures with domestic passenger transport companies, allowed to work at ships flying the Vietnamese flag. However, there is a limitation that the proportion of foreign capital must not exceed 49% of the legal capital of the joint venture, the number of foreign seafarers must not exceed 1/3 of the ship’s boundary. It can be seen that, according to the WTO commitments, Vietnam allows foreign investors to have a fairly diverse capital contribution ratio, from less than 49% to 100%, depending on the industry.
Mr. Hai also said that in the coming time, Vietnam’s logistics service market continues to promise to generate abundant profits due to Vietnam’s rapid economic growth, large volume of manufactured products, leading to high demand for logistics services.
Personnel conditions for foreign-owned logistics companies
Legal status of foreign investors
Foreign investor: If it is an individual, it must have full capacity for civil acts. If it is an organization, it must have a business registration certificate certified by a consul and be an individual with nationality belonging to a WTO country.
Vietnamese enterprises: must have legal status.
Capital ratio that investors
The logistics industry is not a unique small industry, but a field that includes a lot of different specific activities and industries. So the conditions of this industry are also very diverse and complex. But in general, in terms of the capital contribution ratio of foreign investors, it can be distinguished in the table below according to the WTO commitments on services of Vietnam and Decree 163/1027/ND-CP.
| Industry code | Profession | Forms of investment | Maximum capital contribution ratio of foreign investors |
| CPC 7211, 7212 | Freight services under sea transport services (except inland transport) | To establish companies operating fleets flying the Vietnamese flag or contribute capital, purchase shares or contributed capital in Vietnamese capital enterprises | 49% |
| CPC 7411 | Container handling service (ocean freight support) | Establish a joint venture enterprise with Vietnamese investors or contribute capital, purchase shares or contributed capital in Vietnamese capital enterprises | 50% |
| Container handling services belong to services that support all modes of transportation, except those provided at airports | Establish a joint venture enterprise with Vietnamese investors or contribute capital, purchase shares or contributed capital in Vietnamese capital enterprises | 50% | |
| Customs clearance services under shipping support services | Establish a joint venture enterprise with Vietnamese investors or contribute capital, purchase shares or contributed capital in Vietnamese capital enterprises | No rate restrictions | |
| Bill of Lading inspection services, freight brokerage services, cargo inspection, sampling and weight determination services; services for receiving and accepting goods; Transportation document preparation services | Establish a joint venture enterprise with Vietnamese investors or contribute capital, purchase shares or contributed capital in Vietnamese capital enterprises | No rate restrictions | |
| CPC 7222 | Freight services (inland waterways) | Establish a joint venture enterprise with Vietnamese investors or contribute capital, purchase shares or contributed capital in Vietnamese capital enterprises | 49% |
| CPC 7112 | Freight services (rail) | Establish a joint venture enterprise with Vietnamese investors or contribute capital, purchase shares or contributed capital in Vietnamese capital enterprises | 49% |
| CPC 7123 | Freight services (road) | Establish a joint venture enterprise with Vietnamese investors or contribute capital, purchase shares or contributed capital in Vietnamese capital enterprises | 51% |
| CPC 742 | Warehousing Services | Establishment of enterprises with 100% foreign capital or joint venture or capital contribution, purchase of shares or contributed capital in Vietnamese capital enterprises | 100% |
| CPC 748 | Freight agency services | Establishment of 100% foreign capital or joint venture or capital contribution, purchase of shares or contributed capital in Vietnamese capital enterprises | 100% |
| CPC 7512 | Delivery services | Establishment of 100% foreign capital or joint venture or capital contribution, purchase of shares or contributed capital in Vietnamese capital enterprises | 100% |
It should be noted that, if foreign investors have more than one international treaty governing logistic business conditions, they can choose which treaty to follow.
In addition, if the foreign investor wishes to provide more logistics services, the foreign investor’s capital contribution ratio must be the lowest among the services they want to provide. For example, foreign investors want to provide services:
- Delivery services (100% foreign capital allowed)
- Container handling services (shipping support) (maximum 50% foreign capital allowed)
- Freight services under sea transport services (excluding inland transport) (maximum 49% foreign capital allowed)
- So at this time, the foreign capital ratio of investors can only be maximum 49%.
Foreign investors should also note the logistics industry that foreign investors are not allowed to invest in, including: pipeline transport; inspection and certification services for transport vehicles (for technical inspection and analysis activities).
Number of personnel
| Industry code | Profession | Number of foreigners |
| CPC 7211, 7212 | Freight services under sea transport services (except inland transport) | The total number of foreign seafarers shall not exceed 1/3 of the ship’s boundary |
| CPC 7411 | Container handling service (ocean freight support) | No restrictions |
| Container handling services belong to services that support all modes of transportation, except those provided at airports | ||
| Customs clearance services under shipping support services | No restrictions | |
| Bill of Lading inspection services, freight brokerage services, cargo inspection, sampling and weight determination services; services for receiving and accepting goods; Transportation document preparation services | ||
| CPC 7222 | Freight services (inland waterways) | No restrictions |
| CPC 7112 | Freight services (rail) | No restrictions |
| CPC 7123 | Freight services (road) | The driver of the joint venture must be a 100% Vietnamese citizen |
| CPC 742 | Warehousing Services | No restrictions |
| CPC 748 | Freight agency services | No restrictions |
| CPC 7512 | Delivery services | No restrictions |
Professional conditions
For the cargo transport service industry under sea transport services (except inland transport) (codes CPC 7211, 7212), Decree 160/2016/ND-CP stipulates professional conditions of personnel quite specifically:
- Persons in charge of maritime safety and security management systems must be trained, trained and certified according to regulations of the Minister of Transport;
- The person in charge of the management department of sea transport business and operation must have graduated from a college or higher in one of the majors of maritime, foreign trade, trade or economics;
- The person in charge of the legal work department must have graduated from a college or higher in the field of law;
- Seafarers working on ships must fully meet professional and health standards and be granted professional certificates as prescribed. Vietnamese seafarers must fully meet professional standards and be granted professional certificates prescribed by the Minister of Transport; meet the standards of health set by the Minister of Health.
On the other hand, other logistics codes in Vietnam have not been so specified. Foreign investors should consult experts at state agencies, legal consultants, lawyers,… to be able to be consulted more thoroughly about these industries.
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