Foreign investors entitled to contribute capital, purchase shares in logistics companies

Remedying the shortcomings of Decree 140/2007/ND-CP, Decree 163/2017/ND-CP dated 10 December 2017 of Government on provision of logistics services (“Decree 163”) permits foreign investor to not only establish the companies but also contribute capital, purchase shares in logistics companies in Vietnam with their ratio of shares ranging from 49% to 100% of the charter capital, subject to the registered logistics services, upon their satisfaction of a number of statutory conditions.

Under Decree 163, logistics services are categorized into 17 types, including: (i) Container handling services; (ii) Container warehousing services as part of maritime transport support services; (iii) Warehousing services as part of support services for all modes of transport; (iv) Delivery services; (v) Freight transport agency services; (vi) Customs brokerage services (including customs clearance services); (vii) Other services including the following activities: bill of lading inspection, freight brokerage services, cargo inspection, sampling and weighing services; goods receipt and acceptance services; and transport documentation preparation services; (viii) Wholesaling support services and retailing support services including activities being management of goods in storage, collection, sorting and classification of goods, and goods delivery; Freight transport services as part of maritime transport services; (ix) Freight transport services as part of inland waterway transport services; (x) Freight transport services as part of rail transport services; (xi) Freight transport services as part of road transport services; (xii) Air transport services; (xiii) Multimodal transport services; (xiv) Technical analysis and testing services; (xv) Other transport support services; and (xvi) Other services provided by logistics service providers and as agreed with their clients in accordance with the basic principles of the Commercial Law.

Furthermore, Decree 163 also sets forth the principle to determine the limitation of the responsibility of logistics companies in accordance with the following priority order:

(i) Pursuant to the relevant regulations;

(ii) Pursuit to the parties’ agreement;

(iii) Where no agreement on the limitation of the responsibility is concluded but the client has notified the value of cargoes in advance and has been confirmed by the logistics company, the limit of maximum liability will not exceed the value of such cargoes; or

(iv) Where no agreement on the limitation of the responsibility is concluded and the client does not notify the value of cargoes in advance, the limit of maximum liability will not exceed VND 500 million for each claim.

Decree 163 takes effect from 20 February 2018. Logistics service providers that have been registered or licensed to provide logistics services before the effective date of Decree 163 can continue providing services in accordance with the registered or licensed contents.