Logistics is a very “hot” service industry in recent years due to the high demand for the transportation and circulation of goods of enterprises. To be allowed to do business in this service industry in Vietnam, certain regulations must be met. Let’s join Lawyer X to find out about this issue through the following situation: “Howdy lawyer! I want to operate a business to invest in logistics, I want to find out the conditions that need to be met to be able to do logistics business complying with legal framework in Vietnam. Looking forward to your answer!”
Legal grounds
2005 Commercial law
Decree 163/2017/ND-CP on provisions of logistics services
What are logistic services?
Logistic services are commercial activities whereby traders organize the performance of one or many jobs including reception, transportation, warehousing, yard storage of cargoes, completion of customs procedures and other formalities and paperwork, provision of consultancy to customers, services of packaging, marking, delivery of goods, or other services related to goods according to agreements with customers in order to enjoy service charges.
Logistic service contracts mean agreements between parties whereby traders organize the performance of one or many jobs including reception, transportation, warehousing, yard storage of cargoes, completion of customs procedures and other formalities and paperwork, provision of consultancy to customers, services of packaging, marking, delivery of goods, or other services related to goods according to agreements with customers in order to enjoy service charges.
Conditions for logistic service provision
– Traders providing logistic services are enterprises fully satisfying the conditions for logistic service business provided for by law.
– The Government shall specify logistic service business conditions.
Classification of logistics services
Logistics services include:
– Container handling services, except for services provided at airports.
– Container warehousing services classified as auxiliary services for sea transport.
– Warehousing services classified as all auxiliary services for multimodal transport.
– Delivery services.
– Freight transport agency services.
– Customs brokerage services (including customs clearance services).
– Other services including bill of lading inspection, cargo brokerage services, cargo inspection, sampling and weighing services; goods receipt and acceptance services; and preparation of transport documents.
– Wholesaling auxiliary services and retailing auxiliary services including management of goods in storage, and collection, collation and classification of goods and their delivery.
– Cargo transport services classified as sea transport services.
– Cargo transport services classified as inland waterway transport services.
– Cargo transport services classified as rail transport services.
– Cargo transport services classified as road transport services.
– Air carriage services.
– Multimodal transport services.
– Technical inspection and analysis services.
– Other auxiliary services for transport.
– Other services under the agreement signed between the logistics service provider and customer according to basic rules of Commercial law
Conditions for provision of logistics services
Providers of any of the logistics services must satisfy conditions for provision of such services as prescribed by law.
Regarding the provider that provides part or whole of logistic services on the Internet, cellular network or other open networks, in addition to satisfying the conditions that are applied to the services, such provider must comply with regulations on e-commerce.
Conditions to be satisfied by a foreign investor in provision of logistics services:
In addition to complying with general conditions and regulations, a foreign investor in the country or territory that is a World Trade Organization member may provide logistics services under the following conditions:
– For cargo transport services classified as sea transport services (except for inland transport):
+ The foreign investor may establish companies operating ships flying Vietnamese flag or contribute capital, purchase shares or stakes in another enterprise, provided the holding of the foreign investor in such company does not exceed 49%. Total number of foreign seafarers working on the ship flying Vietnamese flag (or registered in Vietnam) under the ownership of these companies in Vietnam shall not exceed 1/3 of the ship’s personnel. Captain or first mate must be a Vietnamese citizen.
+ The foreign sea transport company may establish an enterprise or contribute capital, purchase shares or stakes in another enterprise.
– For container handling services classified as auxiliary services for sea transport (some areas may be used exclusively for provision of services or procedures for issuance of licenses may be completed in these areas), the foreign investor may establish an enterprise or contribute capital, purchase shares or stakes in another enterprise, provided the holding of the foreign investor in such company does not exceed 50%. The foreign investor may establish a commercial presence in Vietnam under a business cooperation agreement.
– For container handling services classified as auxiliary services for multimodal transport, except for services provided at airports, the foreign investor may establish an enterprise or contribute capital or purchase shares or stakes in another enterprise, provided the holding of the foreign investor in such company does not exceed 50%.
– For customs clearance services classified as auxiliary services for sea transport, the foreign investor may establish an enterprise or contribute capital or purchase shares or stakes in another enterprise which is invested in by a domestic investor. The foreign investor may establish a commercial presence in Vietnam under a business cooperation agreement.
– For other services including bill of lading inspection, cargo brokerage, cargo inspection, sampling and weighing services; goods receipt and acceptance services; and preparation of transport documents, the foreign investor may establish an enterprise or contribute capital or purchase shares or stakes in another enterprise which is invested in by a domestic investor.
– For cargo transport services classified as inland waterway transport services or cargo transport services classified as rail transport services, the foreign investor may establish an enterprise or contribute capital or purchase shares or stakes in another enterprise, provided the holding of the foreign investor in such company does not exceed 49%.
– For cargo transport services classified as road transport services, the foreign investor may provide such services under a business cooperation agreement or establish an enterprise or contribute capital or purchase shares or stakes in another enterprise, provided the holding of the foreign investor in such company does not exceed 51%. All drivers of the enterprise must be Vietnamese citizens.
– For air carriage services provided in contravention of regulations of the law on aviation.
– For technical inspection and analysis services:
+ Regarding the services provided to exercise authority of the Government, they may be provided by an enterprise which is invested in by a domestic investor after three years or by an enterprise in which foreign investment is not limited after five years from the date on which the private service provider is allowed to provide such services.
+ It is not allowed to provide vehicle inspection services and issue certificates to such vehicles.
+ The provision of technical analysis and inspection is limited in the areas determined by the competent authority for national defense and security reasons.
In case the foreign investor is regulated by international treaties containing different regulations on conditions for provision of logistics services, the foreign investor may select to apply investment conditions specified in one of such treaties.
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Frequently asked questions
Logistic service contracts mean agreements between parties whereby traders organize the performance of one or many jobs including reception, transportation, warehousing, yard storage of cargoes, completion of customs procedures and other formalities and paperwork, provision of consultancy to customers, services of packaging, marking, delivery of goods, or other services related to goods according to agreements with customers in order to enjoy service charges.
Yes! Providers of any of the logistics services must satisfy conditions for provision of such services as prescribed by law.
Regarding the provider that provides part or whole of logistic services on the Internet, cellular network or other open networks, in addition to satisfying the conditions that are applied to the services, such provider must comply with regulations on e-commerce.
Conclusion: So the above is Conditions for logistics service business in Vietnam. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com
