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Vietnam’s strategic location in Southeast Asia, with its coastline on the South China Sea, makes it a good spot for foreign investors interested in setting up a logistics company in Vietnam. It is not only close to Asian markets but also acts as a gateway between the East and West, enhancing its appeal for logistics.
Let’s discuss the process of setting up a logistics company in Vietnam.
Understanding the scope of logistics services in Vietnam
In Vietnam, logistics services as per Article 233 of the Law on Commerce 2005, cover commercial activities like transportation, warehousing, and storage of goods.
A logistics company in Vietnam can offer various types of services, such as international freight forwarding, warehousing, 3PL & 4PL logistics services, courier services, last-mile delivery, and customs clearance.
Foreign ownership opportunities when setting up a logistics company in Vietnam
According to the Law on Investment 2020 (LOI 2020), foreign investors have the green light to invest in the following categories of logistics services. However, the allowed ownership percentage may vary depending on the service type. The foreign ownership is either:
- Full ownership (Committed): Foreign investors can own 100% of an enterprise.
- Partial ownership (Restricted): It means there’s a cap on how much of the business foreigners can own and other specific restrictions may also apply.
Based on the WTO Agreement that Vietnam has signed, the logistics sector here is broken down into different categories for foreign investors and their ownership percentages.
| No. | Investment sectors | Under the WTO Commitments | ||
| Status on market access for commercial presence | Additional requirements and in practice | |||
| 1 | Freight transportation | Maritime freight transportation less cabotage | Restricted | In the case of the establishment of a registered company to operate a fleet under the national flag of Vietnam: Foreign investment: ≤ 49% Investment form: Joint Venture with a Vietnamese partner |
| Committed | Applying for foreign shipping companies only: Foreign investment: 100% Type of service: international maritime transportation | |||
| Road freight transportation | Restricted | Foreign investment: ≤ 50 Investment form: Joint Venture with a Vietnamese partner | ||
| Internal waterways freight transportation | Restricted | Foreign investment: ≤ 49% Investment form: Joint Venture with a Vietnamese partner | ||
| Rail freight services | Restricted | Foreign investment: ≤49% Investment form: Joint Venture with a Vietnamese partner | ||
| 2 | Container handling services, except services provided at airports | Restricted | Foreign investment: ≤ 50% Investment form: Joint Venture with a Vietnamese partner | |
| 3 | Container handling services (sea freight support) | Restricted | Foreign investment: ≤ 50% Investment form: Joint Venture with a Vietnamese partner | |
| 4 | Storage and warehouse services (services auxiliary to all modes of transport) | Committed | ||
| 5 | Freight transport agency services | Committed | ||
The process of setting up a logistics company in Vietnam as a foreign investor
Here is how you can set up your logistics company in Vietnam, with support from Emerhub:
1. Choose your business entity type
Before starting a logistics company in Vietnam, the foreign investor needs to select a suitable business entity. Depending on your specific situation, you can choose from the following entity types:
- A Wholly Foreign-Owned Enterprise (WFOE) in Vietnam is a setup where foreign investors have full ownership, giving them complete authority over business activities and choices. However, there are some market entry barriers in specific sub-sectors and possibly higher capital requirements for foreign investors.
- A Joint Venture (JV) is a collaboration between a foreign entity and a Vietnamese partner. It provides easier access to restricted sectors and the advantage of local insights, but it comes with shared decision-making.
2. Apply for an Investment Registration Certificate (IRC)
After selecting a business type, Emerhub applies for an IRC at the Department of Planning and Investment (DPI) of the province where the business is set to operate. This certificate has the investor’s information, project specifics, investment capital, duration, and any associated conditions. The following documents are required to apply for an IRC:
- Application form for IRC
- Passport or ID card copy
- Enterprise’s draft charter
- Attorney letter (if necessary)
- Evidence of the investor’s financial capacity
- Proof of legal status for the land or premises of the enterprise
- Documentation validating a foreign investor’s eligibility for restricted sectors (if relevant).
Emerhub assists in preparing all the relevant documents for the IRC, ensuring a seamless application process.
3. Apply for a Business Registration Certificate (BRC)
Once you receive your IRC you have 90 days to apply for a BRC at the Department of Planning and Investment. BRC provides essential enterprise details such as name, address, tax code, legal representative, charter capital, and operational sectors. Emerhub prepares the following documents for BRC:
- BRC application form
- Enterprise’s draft charter
- List of enterprise members or shareholders
- Attorney letter (if necessary)
4. Securing additional licenses & permits for a logistics company in Vietnam
After obtaining BRC you may need to obtain additional permits based on your intended business activity.
- Auto Transport License: Obtainable from the Department of Transport (DOT).
- Custom Clearance Service Decision: From the General Department of Customs (GDC).
- Postal Service License: From the Ministry of Information and Communications (MIC).
Emerhub simplifies the process, helping you secure vital permits without the usual complexities.
Total time required to set up your company in Vietnam
In most circumstances, the time required to set up a logistics company in Vietnam can range from 5 to 15 working days, depending on government processing timelines and the successful submission of all the required documents.
Emerhub simplifies the process, helping you secure vital permits and expedite the process of Logistics company formation in Vietnam.
Key laws and regulations governing logistics business in Vietnam
If you’re interested in setting up your logistics business in Vietnam, the following are some key laws that you should look into:
- The Law on Investment 2020 (LOI 2020): This law sets out the general rules for foreign investment in logistics companies in Vietnam.
- The Law on Enterprises 2020 (LOE 2020): The law governs the establishment, operation, and dissolution of enterprises in Vietnam.
- The Commercial Law 2005: It defines the scope and types of logistics services and the rights and obligations of logistics service providers and users.
- Decree No.163/2017/ND-CP on Logistics Services (Decree 163): It provides detailed guidance on implementing the Commercial Law related to logistics services.
- The Schedule of Specific Commitments in Services between Vietnam and WTO (World Trade Organization) members details the rules and conditions set by Vietnam for foreign investors in specific logistics areas, as per their agreement with the World Trade Organization.
Using Emerhub to set up a foreign-owned logistics company in Vietnam
Emerhub provides tailored assistance for foreign investors looking to establish a logistics company in Vietnam. With a deep understanding of the local regulations and industry dynamics, partnering with Emerhub ensures a streamlined setup process in the Vietnamese market. Furthermore, our dedicated team supports you every step of the way, making your business venture in Vietnam efficient and compliant.
