HCMC – Vietnamese transport firms wherein foreign investors contribute over 51% of the chartered capital will not be licensed, according to the Ministry of Transport.
Recently, some transport firms with over 51% of foreign stake had questions about the investment in vehicles for the road transport business.
In response, the Ministry of Transport stated in a document that the granting of badges and transport licenses is based on Decree 10/2020 and certain trade agreements.
For example, in line with the trade deals and commitments of Vietnam while joining the World Trade Organization, since its participation in the organization, foreign service suppliers are allowed to provide cargo and passenger transport services through contracts or joint ventures. The capital contribution from foreign investors must not exceed 49% of the total capital.
“Three years after the participation, based on the demand of the market, joint ventures to supply cargo transport services will be permitted to be established, but the stake owned by foreign investors must not exceed 51%, and 100% of the drivers of these joint ventures must be Vietnamese,” according to the document.
As such, firms where foreign investors contribute over 51% of the chartered capital and whose investment certificates do not cover the transport business sector, as regulated, will not be granted licenses for the road transport business.
As for the sea transport sector, foreign investors or firms can hold a stake of not more than 49% of the chartered capital in Vietnamese enterprises active in the sector, while similarly, the foreign holding in inland waterway and railway transport firms must not exceed 49%.
As such, road, sea and railway transport firms with over 51% of foreign investment will not be qualified to be licensed for the transport business in Vietnam.