Vietnam has a huge advantage of its geographical location. Besides a 3000-kilometer long coastline, a Nature’s Gift to the nation, Vietnam also has a growing manufacturing industry, play an emerging role in global outsourcing chains of the world as well as an importing country of materials and goods from foreign countries. All of them make Vietnam become a potential place for maritime business. Among maritime services, shipping agency service is considered as a highly demanded one. Foreign investors, especially those from extraordinary maritime histories such as Singapore, Hong Kong, United Kingdom…, have a strong competitive advantage if they invest in shipping agency services in Vietnam.
The Maritime Code 2015 of Vietnam approved by the National Assembly on November 25th 2015 contains many regulations on foreign investors in maritime business. This Code shall take effects on July 1st 2017. Foreign investors should conduct research on those new regulations, especially the limitation on foreign capital and required conditions in order to make your business goes well. Avoiding legal issues is a necessary job like market research or business relationship establishment.
To give foreign investors a hand to establish foreign-owned shipping agency services company in Vietnam, HNLAW&PARTNERS Law Firm collects and provides some basic information as follows:
- The Law on Investment 2014;
- The Law on Enterprises 2014;
- The Maritime Code 2015 of Vietnam (takes effects on July 1st 2017);
- Decree No. 160/2016/NĐ-CP regulating on conditions on sea transportation business, shipping agency services and towage services (takes effects on July 1st 2017).
In accordance with Article 235 of the Maritime Code 2015 of Vietnam, shipping agency services include:
- Performing procedures for the ship’s entering and leaving the port;
- Signing contracts on: carriage, marine insurance, goods loading and unloading, charter-party, seafarers employment;
- Signing and issuing bills of lading or equivalent transport documents;
- Furnishing the ships with materials, fuel, food, potable water;
- Filing sea protest;
- Keeping contact with the ship owner or operator;
- Providing seafarer-related services;
- Collecting and spending sums relating to ship operating activities;
- Resolving any dispute arising from carriage contracts or marine accidents;
- Other ship-related services.
Because shipping agency service is a conditional business sector listed in the Law No.03/2016/QH14, foreign investors shall satisfy conditions regulated in specialized laws:
Limitation on foreign capital: In accordance with clause 1 Article 242 of the Maritime Code 2015 of Vietnam and Article 11 Decree No. 160/2016/NĐ-CP, foreign investors are unable to establish 100% foreign-owned shipping agency company. They just can corporate with Vietnamese partners to establish foreign-owned company in which foreign capital cannot exceed 49% of the charter capital.
Organization’s structure and employees:
- Employees specializing in business and operation of shipping agency services must obtain at least a college degree or above in maritime, foreign trade, commerce or economic;
- Having employees specializing in legal affairs must obtain a college degree or above in law;
- Shipping agency staffs must be Vietnamese citizens being granted professional certificates of shipping agency by state-authorized agencies.
To invest in Vietnam, foreign investors may choose one of the following options:
Option 1: Establish a foreign-owned shipping agency services company in Vietnam
Step 1: Apply for the Investment Registration Certificate
- A written request for permission for project execution;
- Individual investors: copies of ID or passport of each individual;
- Organization investors: copies of Establishment Certificate or equivalent paper confirming the legal status;
- Project proposal specifying: the investors, project’s objectives and scale; capital and capital rising method; location, duration and schedule of the project; labor demand;
- Copies of financial statements in the current 02 years or financial support commitment of the parent company or financial institutions; guarantee for investors’ financial capacity, description of investors’ financial capacity; request for investment incentives; assessment of socio-economic effects of the project;
- Land use demand. If the project does not use land allocated or leased by the State or does not require the State to change land use purpose, the copies of the lease agreement or equivalent papers proving that investors have rights to use the location shall be submitted;
- If the project use any technology in the List of technologies restricted from transfer, investors have to submit the explanation on technology transfer.
Submit the application at: The Department of Planning and Investment.
The process: Within 15 days from the receipt date of the valid application, the Department of Planning and Investment will grant the Investment Registration Certificate to foreign investors. If the Department of Planning and Investment refuse to grant, they will respond in notices and explain the reasons.
Step 2: Establish a foreign-owned shipping agency services company in Vietnam
Apply for the Business Registration Certificate:
An application includes:
- A written request for business registration;
- The Articles of Associates;
- The list of members of the multi-member limited liability company or the list of partners of partnership;
- Notarized copies of ID or valid passport of each individual member; notarized copies of the Business Registration Certificate/Establishment Certificate of each organization member; notarized copies of ID or valid passport of each legal representative of each organization;
- Power of attorney (Clients grant to HNLAW);
- Certificate of Investment Registration of foreign investors.
Submission place: The Department of Planning and Investment.
Duration: 03 – 06 working days.
Announce the business registration contents:
- Business registration information must be announced publicly on the National Portal of Business Registration within 30 days from the date of issuance of the Business Registration Certificate. The contents of the announcement are all the information stated in the Business Registration Certificate.
- Notice: In accordance with Clause 1 Article 26 of the Decree 50/2016/NĐ-CP, if the company does not announce or lately announce the business registration information on National Portal of Business Registration, they are fined an amount of money from 1.000.000 VND to 2.000.000 VND.
Engrave the seal and publish the seal sample:
- The company can authorized HNLaw Firm or can engrave the seal by itself then announce the seal sample to the Department of Planning and Investment. The company is allowed to decide about the appearance, quantity and the contents of the deal but it must contain the name and the code of the company;
- After receiving the announcement on the seal sample, the Business Registry Office shall grant the receipt to the company, post the announcement on the National Portal of Business Registration and issue the Announcement on Publication of the seal sample to the company.
Providing shipping agency services does not require any sub-license after establishing the company. Investors can run their business as long as they satisfy conditions on foreign capital limitation, organization’s structure and employees as mentioned above during operation time.
Option 2: Contribute capital, purchase shares, purchase capital contributions in a Vietnamese shipping agency services company
Another option for foreign investors when investing in Vietnam is contributing capital, purchasing shares, purchasing capital contributions in a Vietnamese shipping agency services company. If foreign investors choose this one, they do not have to apply for the Investment Registration Certificate but apply for registration of capital contribution, shares purchase, capital contributions purchase. Please notice that in order to be granted the approval of capital contribution, shares purchase, capital contributions purchase, foreign investors shall ensure that foreign capital in the company does not exceed 49% of the charter capital. This option saves time and money as well as a Vietnamese shipping agency services company has satisfied other conditions when it is operated.
Step 1: Foreign investors register to contribute capital, purchase shares/capital contributions to the company
- Application for capital contribution, shares/capital contributions purchase indicating: the information of the target company, the foreign capital contribution after completing the procedures;
- Copies of the ID or passport of each individual investor; copies of Establishment Certificate or equivalent papers confirming the legal status of each investor who is an organization.
Submission place: The Department of Planning and Investment.
The process: If the capital contribution, shares purchase, capital contribution purchase of foreign investors comply with the regulations on investment forms and foreign capital contribution, within 15 days from the date of receipt of the valid application, the Department of Planning and Investment will grant a written announcement. If the application does not satisfies conditions, the Department of Planning and Investment will grant a written announcement providing reasons and explanation.
Step 2: Transfer the shares, capital contributions and change the shareholders or members of the company
Foreign investment services in HNLAW&PARTNERS Law Firm:
- Consult about conditions of each business sectors applied to foreign investors in Vietnam;
- Consult about procedures, process relating to foreign investment in Vietnam;
- Draft, prepare and perform the procedures at the state-authorized agencies when being authorized by Clients;
- Consult about after-establishing issues: contracts, labor, tax, social insurance…
Foreign investors who seek for legal advice on regulations and procedures relating to establishment of foreign-owned shipping agency services companies in Vietnam as well as other legal issues, please feel free to contact HNLAW&PARTNERS Law Firm for more information!