[2025] Setting Up a Foreign Logistics Business in Vietnam

I. Legal Basis:

- Specific Commitments on Trade in Services WTO (GATS);

- Law on Investment No. 61/2020/QH14 dated June 17, 2020;

- Law on Enterprises No. 59/2020/QH14 dated June 17, 2020;

- Commercial Law of 2005;

- Decree No. 163/2017/ND-CP regulating logistics service business.

II. Logistics Services in Vietnam:

The logistics services landscape in Vietnam encompasses a broad spectrum of activities, including:

Logistics services include:

1. Container handling services, except for services provided at airports.

2. Container warehousing services classified as auxiliary services for sea transport.

3. Warehousing services classified as all auxiliary services for multimodal transport.

4. Delivery services.

5. Freight transport agency services.

6. Customs brokerage services (including customs clearance services).

7. 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.

8. Wholesaling auxiliary services and retailing auxiliary services including management of goods in storage, and collection, collation and classification of goods and their delivery.

9. Cargo transport services classified as sea transport services.

10. Cargo transport services classified as inland waterway transport services.

11. Cargo transport services classified as rail transport services.

12. Cargo transport services classified as road transport services.

13. Air carriage services.

14. Multimodal transport services.

15. Technical inspection and analysis services.

16. Other auxiliary services for transport.

17. Other services under the agreement signed between the logistics service provider and customer according to basic rules of the Law on Commerce.

III. Business Conditions for Foreign Investors in Logistics Services in Vietnam

Based on Vietnam's Specific Commitments on Trade in Services upon WTO accession and Decree No. 163/2017/ND-CP, the capital contribution ratio of foreign investors in the logistics sector varies depending on the specific sub-sector:

Sector	Investment Form	Maximum Foreign Investor Capital Contribution Ratio
Cargo transportation services classified as sea transport services (excluding domestic transport) - CPC 7211, 7212	Establishment of companies operating ships flying the Vietnamese flag or capital contribution, share purchase in Vietnamese companies	49%
Container handling services (supporting sea transport) - CPC 7411	Establishment of companies or capital contribution, share purchase in Vietnamese companies	50%
Container handling services classified as supporting all transport modes, excluding airport services – CPC 7411	Establishment of companies or capital contribution, share purchase in Vietnamese companies	50%
Customs clearance services classified as supporting sea transport	Establishment of companies, joint ventures with Vietnamese investors, or capital contribution, share purchase in Vietnamese companies	100%
Bill of lading inspection, cargo brokerage, cargo inspection, sampling, weighing, goods receipt, acceptance, transport document preparation services – CPC 749	Establishment of joint ventures with Vietnamese investors or capital contribution, share purchase in Vietnamese companies	100%
Cargo transportation services (inland waterway) - CPC 7222	Establishment of companies or capital contribution, share purchase in Vietnamese companies	49%
Cargo transportation services (rail) - CPC 7112	Establishment of companies or capital contribution, share purchase in Vietnamese companies	49%
Cargo transportation services (road) - CPC 7123	Establishment of joint ventures with Vietnamese investors or capital contribution, share purchase in Vietnamese companies	51%
Warehousing services - CPC 742	Establishment of 100% foreign-owned companies, joint ventures, or capital contribution, share purchase in Vietnamese companies	100%
Freight forwarding agency services - CPC 748	Establishment of 100% foreign-owned companies, joint ventures, or capital contribution, share purchase in Vietnamese companies	100%
Courier services - CPC 7512	Establishment of 100% foreign-owned companies, joint ventures, or capital contribution, share purchase in Vietnamese companies	100%

If a foreign investor is subject to multiple international agreements with varying regulations on logistics service business conditions, they have the right to choose to apply the most favorable investment conditions stipulated in any of those agreements.

Furthermore, if an investor plans to provide multiple types of logistics services concurrently, the maximum foreign capital contribution ratio will be determined by the lowest limit among the intended activities. For instance, if an investor plans to offer container handling, warehousing, and road freight services, the maximum foreign capital contribution ratio will be 50%, as road freight services currently have this limitation.

IV. Limitation of Liability When Operating Logistics Services in Vietnam

Another crucial aspect that foreign investors must understand when operating logistics services in Vietnam is the limitation of liability for damages. Decree No. 163/2017/ND-CP specifically addresses this issue as follows:

1. General Liability Limit: This represents the maximum compensation that a logistics service provider is responsible for to customers for losses incurred during service provision.

2. Priority of Specialized Laws: If other relevant laws stipulate different liability limits, those laws will take precedence.

3. Agreement Between Parties: In cases where relevant laws do not specify limits, the liability limit will be determined by agreement between the logistics company and the customer.

In the absence of an agreement: If no agreement is established, the following provisions apply:

• Customer does not declare the value of goods in advance: The maximum liability limit is 500 million VND per claim.
• Customer declares the value of goods in advance and it is confirmed: The liability limit will not exceed the actual declared and confirmed value of the goods.

Multiple Service Stages: If the logistics company performs multiple service stages with varying liability limits, the highest limit among those stages will apply.

IV. Foreign Investment Procedures in Vietnam:

In accordance with Articles 21-28 of the Law on Investment 2020, foreign investors can adopt the following investment vehicles:

1) Establishing Economic Organizations:

a) Foreign investors establishing economic organizations must meet the market access conditions for foreign investors specified in Article 9 of this Law;

b) Before establishing an economic organization, foreign investors must have an investment project and carry out the procedures for issuing and adjusting the Investment Registration Certificate, except for the establishment of innovative startup small and medium-sized enterprises and innovative startup investment funds in accordance with the law on supporting small and medium-sized enterprises

From the date of issuance of the Enterprise Registration Certificate or other legally equivalent documents, the economic organization established by the foreign investor is the investor implementing the investment project as specified in the Investment Registration Certificate.

2) Capital Contributions and Acquisitions:

The foreign investor's capital contribution, share purchase, and capital contribution portion purchase in economic organizations must comply with the following regulations and conditions:

a) Market access conditions for foreign investors specified in Article 9 of the Investment Law.

b) Ensuring national defense and security as prescribed by this Law;

c) Land law provisions on conditions for receiving land use rights and conditions for land use on islands, border communes, wards, and towns, and coastal communes, wards, and towns.

3) Investment Project Execution:

Direct project implementation.

4) Business Cooperation Contracts (BCCs):

BCC contracts signed between domestic investors are implemented in accordance with civil law.

BCC contracts signed between domestic investors and foreign investors or between foreign investors are subject to the procedures for issuing Investment Registration Certificates as specified in Article 38 of the Investment Law.

Parties participating in the BCC contract establish a coordination board to implement the BCC contract. The functions, tasks, and powers of the coordination board are agreed upon by the parties.

5) New forms of investment and types of economic organizations as prescribed by the Government.

Foreign investors make investments according to new types of economic organizations as prescribed by the government.

V. Conclusion:

Vietnam's logistics sector offers promising investment opportunities for foreign businesses in 2025, particularly amidst deepening international economic integration. ¹ However, mastering the legal conditions, including regulations on capital contribution ratios for specific services and liability limitations, is crucial to ensure smooth and efficient business operations. DB Legal, with its team of experienced lawyers, is ready to support and provide comprehensive legal consulting services, helping clients realize their investment plans in Vietnam's promising logistics market. Please do not hesitate to contact us for detailed and professional assistance.

Read more at: https://dblegal.vn/news/setting-up-a-company-in-vietnam/set-up-a-logistics-company-in-vietnam-1187.html

 

The information contained in this article is general and intended only to provide information on legal regulations. DB Legal will not be responsible for any use or application of this information for any business purpose. For in-depth advice on specific cases, please contact us.

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