HOW TO ESTABLISH A LOGISTICs COMPANY WITH FOREIGN CAPITAL IN VIETNAM 2022

Vietnam is a country with a favorable geographical position, it is the gateway to the East Sea, convenient for trade with many countries in the region. The establishment of a Logistics company is the desire of many people when coming to Vietnam, however, not everyone understand the law. Through the article below, Doanh Tri Firm would like to send to you readers the latest procedures for establishing a foreign-invested logistics company in 2022.

1. Legal basis:

- Law on Enterprise 2020;

- Law on Investment 2020;

- Decree No.163/2017/NĐ-CP;

- Circular No.31/2021/NĐ-CP.

2. Conditions for doing business in Logistics services:

According to the provisions Clause 3 of Article 4 of Decree 163/2017,  foreign traders providing logistics services must meet many financial and technical conditions and ensure safety in accordance with the law on postal services. Specific conditions include:

(i) In case of goods transport services under sea transport services (except for inland transportation):

- Allowed to establish companies operating fleets of ships flying the Vietnamese flag, or, to contribute capital, purchase shares or capital contributions in enterprises, in which the capital contribution ratio of foreign investors does not over 49%. The total number of foreign crew members working on ships flying the Vietnamese flag (or registered in Vietnam) owned by these companies in Vietnam does not exceed one third of the vessel's manning. The captain or first mate must be a Vietnamese citizen.

- Foreign shipping company may establish an enterprise or contribute capital, purchase shares or contributed capital in the enterprise.

(ii) In the case of container handling services in support of sea transport services (a number of areas may be reserved to provide services or apply licensing procedures in these areas), may establish an enterprise or contribute capital, purchase shares or contributed capital in an enterprise, in which the capital contribution ratio of foreign investors does not exceed 50%. Foreign investors are allowed to establish a commercial presence in Vietnam in the form of a business cooperation contract.

(iii) In the case of business in container handling services belonging to services supporting all modes of transport, except services provided at airports, it is possible to establish a business or contribute capital, purchase shares, or contribute capital to the company, in which the capital contribution ratio of foreign investors does not exceed 50%.

(iv) In the case of business in customs clearance services under sea transportation support services, may establish an enterprise or contribute capital, purchase shares or contributed capital in an enterprise, including capital contributed by investors in the enterprise. Foreign investors are allowed to establish a commercial presence in Vietnam in the form of a business cooperation contract.

(v) Business case of other services, including the following activities: Bill of lading checking, freight brokerage services, goods inspection, sampling and weighing services; receiving and accepting services; services of preparing transport documents, establishing an enterprise or contributing capital, buying shares or contributed capital in an enterprise, including capital contributed by domestic investors.

(vi) In case of business in freight transport services under inland waterway transport services, freight transport services in railway transport services, may establish an enterprise or contribute capital, purchase shares, capital contribution in the enterprise, in which the capital contribution ratio of foreign investors does not exceed 49%.

(vii) In case the business of freight transport services belongs to the road transport service, it is carried out in the form of a business cooperation contract or is allowed to establish an enterprise or contribute capital, purchase shares or capital contribution in the enterprise, in which the capital contribution ratio of foreign investors does not exceed 51%. 100% of business drivers must be Vietnamese citizens.

(viii) In case of business of air transport services, comply with the provisions of aviation law.

(ix) Business case for technical analysis and verification services:

- For services provided to exercise the authority of the Government carried out in the form of an enterprise in which capital is contributed by a domestic investor after three years or in the form of an enterprise in which there is no limitation contributed capital by foreign investors after five years from the date the private service provider is allowed to provide such services.

- Not allowed to do business in inspection and certification services for means of transport.

- The performance of technical analysis and verification services is restricted to geographical areas identified by competent authorities for reasons of national security.

(x) In case foreign investors are subject to the application of international treaties with different provisions on logistics service business conditions, the investor may choose to apply the investment conditions specified in Clause 1 of this Article or, one of those treaties.

3. Investment project application:

For all procedures related to foreign investment, investors always have to carry out the procedures of applying for approval of investment policies from the provincial Department or th industrial area Department, export processing area, and technology area; high, economic area if the enterprise's headquarters is located in the economic area.

Step 1: Dossier prepare

An application for approval includes the following contents:

(i) Written proposal for implementation of the investment project;

(ii) Documents proving the investor's legal status: Copy of identity card or passport (Applicable in case the investor is an individual); Copy of Business Registration Certificate (Applicable in case the investor is legal);

(iii) Investment in a publishing project includes the following contents: investor implementing the project, objectives, scale and investment capital, capital mobilization plan, location, time limit, investment schedule, demand for labor, proposal to prioritize, assess the project's socio-economic impact and efficiency;

(iv) A copy of one of the following documents: Financial statement of the last 2 years of the investor; commitment to financial support of the parent company; commitment to support the main account of the organization; guarantee on the investor's capacity; documents explaining the investor's capacity;

(v) Proposed demand for land using; In case the project does not request the State to allocate or lease land, permit the change of land use purpose, submit a copy of the location lease agreement or other document certifying that the investor has the right to use the site for implementation. currently investing in the project;

(vi) Explanation on technology used in investment projects for project appraisal and consultation on technology in accordance with the law on technology transfer

(vii) Contractual BCC for investment projects under valid BCC.

(viii) Other documents related to investment projects, requirements on conditions and capacity of investors as prescribed by law (if any).

Step 2: Submit your application

Investors prepare 04 sets of documents including the papers listed in step 1, then submit them to the provincial Department of Planning and Investment, or the Management Board of industrial parks, export processing zones, and high-tech zones. , economic zone if the location of the company's headquarters is in the industrial zone.

Step 3: Get the result

For projects get approval from the province-level People's Committee: Within 50 days from the date of valid receipt of the application, the investment registration agency has the authority to accept the investor.

For projects get approval from the Industrial area management, Export Processing areas, High-Tech areas and Economic areas: Within 43 days from the date of receipt of valid dossiers, the Investment Registration Authority may authority to approve investment policies

In case the dossier needs to be amended or supplemented, within 15 working days from the date of receipt of the dossier, the Investment Registration Authority shall send a document clearly stating the reason and supplementing the dossier to the Investor (This time does not include weekends and public holidays).

4. Apply for an enterprise registration certificate

Step 1: Prepare dossier

Business establishment profile includes:

(i) Investment registration certificate (issued after completing the procedures in section 3)

(ii) Application for enterprise registration;

(iii) Charter of the company;

(iv) List of founding shareholders and shareholders being foreign investors (if it is a joint stock company); List of members (if it is a two-member limited company);

(v) Copies of papers proving personal status: Identity card, passport, double identification card for individuals. Attach documents proving legal status: Business registration license, establishment decision, power of attorney (for organizations).

(vi) A certified copy of the issued Investment Registration Certificate;

Step 2: Submit your application

Enterprises submit documents to the Business Registration Office of the Department of Planning and Investment of the province where the enterprise's head office is located.

Step 3: Get the result

Within 3 to 5 working days, the Department of Planning and Investment will consider and issue a license for the business. In case the dossier is missing or needs to be supplemented, the Department of Planning and Investment will reply in writing and guide the investor to supplement.

Step 4: Announce the content of business registration information

After being granted an enterprise registration certificate, an enterprise must publicly notify it on the national portal on business registration within 30 days. The content to be announced includes the contents of the Business Registration Certificate and the following information:

(i) Line of business;

(ii) List of founding shareholders; list of shareholders being foreign investors in the case of a joint-stock company (if any);

Enterprises shall publish the seal sample publicly on the national website.

The above article is our firm's perspective towards how to establish a logistics company with foreign capital in Vietnam. For more information and advice on this issue, please contact Doanh Tri Law Firm directly via:
Hotline: (+84) 911.233.955 - (024) 6293 8326
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