Decree No.163 Opportunity for FDI in Vietnam Logistics

GDP Vietnam growth Estimate 2018: 6,83 %

Import – Export Vietnam 2017

Import – Export Vietnam 2018

FDI Vietnam 2017

FDI Vietnam 2018

FDI Vietnam 2018 / 2017

New decree replaces regulations on logistics business Based on the current total export and import turnover of $425 billion and the increasing trend, the development potential of logistics services remains strong in Vietnam and is even stronger in the ASEAN. Issued in 2007, at the time of Vietnam’s accession to the WTO, Decree 140 is ancient by Vietnamese legal standards. Foreign investors and Vietnamese businesses seeking foreign investment must closely review each business activity they plan to conduct in Vietnam to see if foreign ownership limitations and other conditions apply. 20th February 2018 163/2017/NĐ-CP 140/2007/NĐ-CP

Classification of logistics services Logistics services under Article 3 of Decree 163: Container handling services, except for provision of such services at airports; Container warehousing services as part of maritime transport support services; Warehousing services as part of support services for all modes of transport; Delivery services; Freight transport agency services; Customs brokerage services (including customs clearance services);

Classification of logistics services Logistics services under Article 3 of Decree 163: Customs brokerage services (including customs clearance services); 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; 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; Freight transport services as part of inland waterway transport services;

Classification of logistics services Logistics services under Article 3 of Decree 163: Freight transport services as part of rail transport services; Freight transport services as part of road transport services; Air transport services; Multimodal transport services; Technical analysis and testing services; Other transport support services; Other services provided by logistics service providers and as agreed with their clients in accordance with the basic principles of the Commercial Law.

Foreign ownership limitations (FOL) Foreign Ownership Limitations (FOL) in the logistics sector under Decree 163 in comparison to Vietnam's WTO Services Sector Commitments (WTOSSC) (Unit: per cent) Service Description FOL (under WTOSSC) FOL (under Decree 163) Storage and Warehouse 100 x Freight transport agency (including freight forwarding services) Bill auditing; freight brokerage; freight inspection, weighing and sampling; freight receiving and acceptance; transportation document preparation on behalf of cargo owners 99 Maritime transport (Passengers; less cabotage) 49 (a) Maritime transport (Freight; less cabotage) – joint-venture fleet flying Vietnamese flag (b) Maritime transport (Freight; less cabotage) – foreign fleet Internal waterways transport (Passengers) Internal waterways transport (Freight) Rail transport (Passengers) Unbound Rail transport (Freight) Road transport (Passengers) Road transport (Freight) 51 Custom clearance Container station and depot Container handling (except at airports) 50 Distribution (import/export, commission agents, wholesale, retail)

Conditions for business in logistics services Decree 140/2007 / ND-CP requires traders dealing in logistic services to have sufficient means, equipment, tools to ensure safety and technical standards and have staff to meet the requirements. However, Decree 163/2017 / ND-CP does not specify this requirement, but the specialized legal documents of each kind of service shall specify

Limitation of liability Decree 163 stipulates that the limitation of liability is the maximum limit for which a business entity engaging in the provision of logistic services is liable for damages to its customers for losses incurred in the course of organizing the provision of logistic services stipulated in this Decree. In cases where the parties do not have an agreement, if the customer does not give advance notice on the value of the goods, the maximum liability limit is 500 million VND for each claim. If the customer has informed in advance of the value of the goods and is certified by a logistics business entity, the liability limit will not exceed the value of the goods.

E-commerce in Logistics One thing that is new in Decree 163 is its express requirement to comply with Vietnam’s e-commerce regulations. Vietnam’s main e-commerce regulation is Decree No.52/2013/ND-CP, which requires e-commerce service providers to either notify or register at the Ministry of Industry and Trade. These e-commerce requirements will be applicable to logistics services that conducted e-commerce activities before Decree 163.

Opportunity for FDI in Vietnam Logistics E-commerce development in the field of logistics. To expand the business scope of logistics services. Strengthen the ability to contribute investment capital.

Logistics infrastructure. Logistics investment. Evaluation of the VLA Logistics growth. + Logistics costs are quite high (18,6% of GDP). + Logistics continues to grow. Logistics infrastructure. + Infrastructure is under development. + There are many traffic difficulties. Logistics investment. + Develop logistics hub. Infrastructure investment. + High quality warehouse system. + E commercial. + Logistics M&A.

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