Vietnam’s strategic location in Southeast Asia and its extensive coastline on the South China Sea make it a popular destination for foreign investors looking to establish logistics operations. This guide outlines the key steps for setting up your logistics company in Vietnam, covering everything from ownership structures to mandatory licenses, and expert compliance insights.
Overview of Vietnam’s Logistics Industry
Understanding Vietnam’s Logistics Sector
Vietnam’s logistics sector is supported by its participation in free trade agreements (FTAs), premium infrastructure, and the government's focus on cultivating a robust, pro-business environment for foreign investors. The country’s logistics industry comprises a broad range of commercial services including transportation, warehousing, and storage of goods. Key logistics services in Vietnam include:
- Freight forwarding: Domestic and international shipping solutions.
- Warehousing: Storage and inventory management.
- Third-Party Logistics (3PL) and Fourth-Party Logistics (4PL): Outsourced supply chain solutions.
- Customs Clearance: Facilitating imports and exports of goods.
- Courier Services and Last-Mile Delivery: Expedited delivery to end consumers.
Types of Foreign-Ownership Structures in Vietnam’s Logistics Industry
Vietnam’s foreign ownership structures are based on Vietnam’s WTO commitments and domestic regulations. Factors like investment capital, company location, and applicable free trade agreements can influence the specific structures allowed. The most common legal structure for setting up your logistics company are: :
- Full Ownership (Committed): This structure allows foreign investors to have full ownership (100%) in certain sectors. Certain sub-sectors may have restrictions or higher capital requirements for foreign investors.
- Partial Ownership (Restricted): Foreign ownership is capped to at least 50% or less, depending on the specific service.
Note that some logistics services allow more flexible ownership structures with up to 99% foreign ownership:
- Customs clearance services.
- Services related to bill of lading inspection, goods transport brokerage, cargo inspection, sampling and weight determination, receiving and accepting goods, and transportation document preparation.
Popular Sectors for Foreign Investments in Vietnam’s Logistics Industry
According to the Law on Investment 2020 (LOI 2020), you are allowed to invest in the following categories of logistics services. The table below breaks down the specific foreign ownership limitations that apply to various logistics sectors in Vietnam according to Vietnam’s WTO commitments:
| Logistics Sectors | WTO Commitments | ||
|---|---|---|---|
| Market Access | Foreign Ownership Limit | ||
| Freight Transportation | Maritime Freight Transportation | Restricted | ≤49% |
| International Maritime Transportation | Committed | 100% | |
| Road Freight Transportation | Restricted | ≤50% | |
| Internal Waterways Freight Transportation | Restricted | ≤49% | |
| Rail Freight Services | Restricted | ≤49% | |
| Container Handling Services, except services provided at airports | Restricted | ≤50% | |
| Container Handling Services (sea freight support) | Restricted | ≤50% | |
| Storage and Warehousing Services (services auxiliary to all modes of transport) | Committed | 100% | |
| Freight Transport Agency Services | Committed | 100% |
Keep in mind that these limits may vary based on specific regulations and free trade agreements. Emerhub's team of local experts can help you navigate these regulations, assess the most appropriate investment structure, and identify suitable locations for your logistics operations.
Key considerations for starting your logistics company in Vietnam
If you are planning to establish a logistics company in Vietnam, the process involves navigating extensive legal, operational, and compliance requirements that ensure your business operates as per Vietnamese law. Below are critical considerations that may influence your intended business structure and logistics activities, which Emerhub’s local experts can help you navigate:
1. Minimum Capital Requirements: While there’s no fixed minimum capital requirement for most logistics services in Vietnam, the investment must be sufficient to cover your business expenses. Some specific sectors may also have higher capital requirements.
2. Local Presence: A physical office address in Vietnam is mandatory for registration purposes. Alternatively, Emerhub can provide virtual office solutions that meet this requirement.
3. Legal Representative: You must have at least one legal representative who is a resident of Vietnam. If the sole legal representative is not a Vietnam resident, you must appoint a legally authorized representative in Vietnam.
4. Sector-Specific Regulations: Be aware of additional regulations that may apply to your specific logistics sub-sectors. For example, in road transport services, there are specific requirements for foreign drivers like obtaining additional approval from the Ministry of Public Security.
5. Environmental Regulations: Sustainability is becoming increasingly important and companies must be prepared to implement green logistics initiatives such as using electric vehicle fleets, to align with Vietnam’s environmental goals.
How to Set Up a Logistics Company in Vietnam
Mandatory Licenses for Operating in Vietnam’s Logistics Industry
To operate a logistics company in Vietnam, you must obtain several mandatory licenses based on your specific business activities:
- Business License- for the sale of goods and other activities, issued by the local Department of Industry and Trade where your business is located.
- Customs Declaration Employee Code- for agents performing customs clearance activities to act on behalf of customs clearance service companies
- Transportation Business License– required for companies offering transportation services, obtained from the Department of Transport (DOT) in the province of your business.
- Custom Clearance Service Decision– for customs-related services, issued by the GDC.
- Postal Service License– required for courier services, obtained from the Ministry of Information and Communications (MIC).
These licenses require periodic renewals to avoid penalties or license revocation. Our experts can help notify you well in advance of expiration dates, manage the renewals on your behalf, and ensure continuous compliance for uninterrupted operations.
Key Steps for Setting Up Your Logistics Company in Vietnam
Registering your logistics company in Vietnam requires careful coordination with local authorities and adherence to sector-specific requirements. Emerhub’s comprehensive company incorporation services offer a strategic advantage in this layered process. Our team of experts possesses localized insights that can help simplify every step of the process.
Before starting a logistics company in Vietnam, you must choose a suitable business entity that aligns with your intended logistics services. Depending on your specific situation, you can choose from the following entity types:
- Wholly Foreign-Owned Enterprise (WFOW): Foreign investors have full ownership and complete authority over business activities and choices. However, there are market entry barriers in specific sub-sectors and possibly higher capital requirements for foreign investors.
- Joint Venture (JV): A collaboration between a foreign entity and a Vietnamese partner. It provides easier access to restricted sectors and the advantage of local insights, but comes with shared decision-making.
It’s worth noting that the time required to set up a logistics company in Vietnam can range from 2 to 4 months, depending on the nature of your business and the successful submission of all mandatory documents. Our local experts can ensure timely submissions for all documents along with ensuring certified translations and proper attestations, which are critical to avoid delays or rejection during the application process.
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