1.Logistic services in Vietnam
Logistic services under Vietnamese law, are the commercial activities whereby traders/enterprises organize the performance of one or many jobs including reception, transportation, warehousing, yard storage of cargos, 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.
The enterprise operating in logistic services must have lawful business registration in accordance with the law of Vietnam and must have adequate facilities, equipment and working facilities and personnel.
A foreign investor cannot incorporate a wholly foreign invested company operating in the logistics sector but only a Joint Venture Company can only be formed with a Vietnamese party.
The proportion of foreign investment shall vary according to the services provided by the logistic service provider.
According to the Decree No.140/2007/ND-CP dated September 5th, 2007, providing detailed regulations for implementation of the Commercial Law with regard to conditions for engaging in logistic services business and the limitations on liability of business entities engaging in logistic services business, Foreign Investors who wish to conduct business activities in the field of transportation agency services must satisfy following conditions:
– It must have adequate facilities, equipment and working facilities which ensure technical [standards] and safety criteria, and a team of staff who satisfy the requirements;
– It must establish a Joint Venture Company in which the capital contribution ratio of the foreign investor does not exceed 51%. From year of 2014, the capital contribution ratio of the foreign investor in Joint Venture Company shall be totally removed.
Thus, it is possible for you to setup 100% Foreign Invested Company in Vietnam to logistic services.
2. Formation Vietnam company
The establishment of the new company requires an Investment Certificate from the licensing authority.
Depending upon the location of the company, the licensing authority may be the Provincial People’s Committee (for companies located outside industrial or export processing zones) or the provincial Industrial and Export Processing Zones Management Authority (for companies located in industrial or export processing zones).
We would like to clarify that the procedure for establishment of a foreign invested company in Vietnam generally takes a rather long time in comparison with other countries in the region.
Our practical experiences show that although the total time for establishment of a foreign invested company as stipulated under Vietnam Investment Law 2005 is only 45 days, the actual process may take a longer time due to that the competent authority must consult other relevant offices to evaluate the investment project.
Under Vietnam Law on Investment, for incorporating a foreign invested company
(Hereinafter referred to as “FIC”), you are required to propose an Investment Project initially to obtain Investment certificate.
The relevant licensing authorities shall evaluate the legitimacy and the feasibility of such Investment Project to determine on granting of the Investment Certificate on the following basis:
a. the legal framework including Vietnam’s WTO Commitments, Vietnam Investment Law, Vietnam Enterprise Law, Regulations applicable to specific industries as well as the master economic development plan of the city or province that the FIC shall register its head-office.
b. Your financial ability, investment capital to put in the Investment Project, facilities and human resources serving the implementation of such investment project in Vietnam.
c. Head office of the FIC should be in line with master plan of the City.
3.The roadmap for the incorporation of the FIC for trading activities can be described in following steps as follows:
3.1.Preparing the application dossier: We shall collect necessary information and documents from you.
Upon receipt of necessary information and documents from you, we shall translate documents from English into Vietnamese and prepare the application dossier under the standard forms. The initial drafted application dossier shall be sent to you for your comments. Then, after updating the application dossier based on your comments, we shall obtain the preliminary comments from the competent authority and send the finalized application dossiers for you to sign and seal.
We anticipate that this phase shall be completed within 07 working days.
3.2.Submission of application dossier: Within 02 working days from receipt of duly signed and sealed application dossier, we shall submit the application dossier to the competent authority. It shall take about 4 months from submission of application dossier to the competent authority for the provincial licensing authority to grant the Investment Certificate.
In some case the process can be longer as it takes time to consult relevant Ministries such as Ministry of Industry and Trade, Ministry of Planning and Investment, Ministry of Finance and Ministry of Transportation.
3.3. Post licensing: Within 13 working days we shall complete the post licensing procedures such as publishing the FIC in News Paper, obtaining seal and tax code registration.
