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Licensing logistics services get easier
Since the passage of the Commercial Law, its provisions on logistics services, contained in Articles 233, 234 and 238, have cried out for clarification.
Article 233 of the Commercial Law defines logistic services as such commercial services as receipt, transportation, warehousing, and yard storage of goods and cargo, completion of customs procedures and other formalities and paperwork, provision of consultancy to customers, services of packaging, marking, and delivery of goods, or other services for a fee related to goods.
The Government responded to calls for greater detail on the provision of the services by issuing Decree 140/2007/ND-CP on September 5 to provide conditions for logistic services and limitations of liability of logistic services providers.
The decree classifies logistic services into three categories and sets out the conditions for both domestic and foreign providers for each of these categories. All of the provisions are consistent with Viet Nam’s WTO commitments.
The three categories of logistics services defined in the new decree are: i) primary logistic services; (ii) logistic services related to transportation; and (iii) other related logistic services.
Primary logistics services include loading and unloading of goods including loading goods into containers; warehousing and yard storage of cargo; freight transport agency services including completion of customs clearance procedures and preparation for loading and unloading goods; and other auxiliary services such as receiving, archiving and managing information about transportation and storage of goods throughout the full service logistical chain.
Logistics services related to transportation include marine, interior waterway, air, rail, road and pipeline transport services.
Other logistics services include technical checks and analysis; postal services; wholesale and retail services such as management of warehousing, collection, gathering, classification, redistribution and delivery of goods; and other services auxiliary to transport.
Before Decree 140 was issued, obtaining an investment license for logistic services was often difficult given uncertainty as to what that phrase meant. Logistic services were understood to be various industries related to goods, including some restricted lines such as transport services, postal services, and wholesale or retail services. Local authorities often refused applications for business licences where "logistic services" was specified as the relevant industry.
To avoid this, applicants tended to separate each element of the intended logistic services into a separate industry. However, given the introduction of Decree 140, such line-by-line application may no longer be necessary. "Logistic services" no longer need to be viewed as a full-service logistical chain, but can refer to a single service, such as warehousing goods.
The need to differentiate a one component of "logistic services" is particularly important because the Commercial Law and Decree 140 enable logistics service providers to limit their liability to customers. The Commercial Law and Decree 140 are not clear, however, on whether applicants for business registration would enjoy the limitation of liability provision if they register their business under a single component of logistic services.
Decree 140 does set forth restrictions on foreign service providers, consistent with Viet Nam’s WTO commitments.
For loading and uploading of goods, warehousing and freight transport agency services, foreign service providers can only operate under joint ventures in which the foreign investor’s participation is limited.
For marine transport services, foreign investors are permitted to establish joint ventures for operating fleets as of 2009, although the foreign investor’s participation cannot exceed 49 per cent (or 51 per cent for international marine transport services), a restriction that will be removed in 2012.
Road transport services can only be established as joint ventures in which the foreign investor’s participation does not exceed 49 per cent, a restriction that would increase up to 51 per cent in 2010.
Pipeline transport services would not be permitted for foreign participation, unless international treaties of which Viet Nam is a member otherwise provide.
Foreigners would aso be barred from providing transport verification and certification services; and provision of services of technical checks and analysis is limited in some geographic areas for security reasons;
Foreign participation in postal, wholesale and retail services would be subject to limitations set out in relevant regulations.
Decree 140 is significant in clarifying the concept of "logistics services" and acknowledging the restrictions provided for in Viet Nam’s WTO commitments. — VNS
The Government responded to calls for greater detail on the provision of the services by issuing Decree 140/2007/ND-CP on September 5 to provide conditions for logistic services and limitations of liability of logistic services providers.
The decree classifies logistic services into three categories and sets out the conditions for both domestic and foreign providers for each of these categories. All of the provisions are consistent with Viet Nam’s WTO commitments.
The three categories of logistics services defined in the new decree are: i) primary logistic services; (ii) logistic services related to transportation; and (iii) other related logistic services.
Primary logistics services include loading and unloading of goods including loading goods into containers; warehousing and yard storage of cargo; freight transport agency services including completion of customs clearance procedures and preparation for loading and unloading goods; and other auxiliary services such as receiving, archiving and managing information about transportation and storage of goods throughout the full service logistical chain.
Logistics services related to transportation include marine, interior waterway, air, rail, road and pipeline transport services.
Other logistics services include technical checks and analysis; postal services; wholesale and retail services such as management of warehousing, collection, gathering, classification, redistribution and delivery of goods; and other services auxiliary to transport.
Before Decree 140 was issued, obtaining an investment license for logistic services was often difficult given uncertainty as to what that phrase meant. Logistic services were understood to be various industries related to goods, including some restricted lines such as transport services, postal services, and wholesale or retail services. Local authorities often refused applications for business licences where "logistic services" was specified as the relevant industry.
To avoid this, applicants tended to separate each element of the intended logistic services into a separate industry. However, given the introduction of Decree 140, such line-by-line application may no longer be necessary. "Logistic services" no longer need to be viewed as a full-service logistical chain, but can refer to a single service, such as warehousing goods.
The need to differentiate a one component of "logistic services" is particularly important because the Commercial Law and Decree 140 enable logistics service providers to limit their liability to customers. The Commercial Law and Decree 140 are not clear, however, on whether applicants for business registration would enjoy the limitation of liability provision if they register their business under a single component of logistic services.
Decree 140 does set forth restrictions on foreign service providers, consistent with Viet Nam’s WTO commitments.
For loading and uploading of goods, warehousing and freight transport agency services, foreign service providers can only operate under joint ventures in which the foreign investor’s participation is limited.
For marine transport services, foreign investors are permitted to establish joint ventures for operating fleets as of 2009, although the foreign investor’s participation cannot exceed 49 per cent (or 51 per cent for international marine transport services), a restriction that will be removed in 2012.
Road transport services can only be established as joint ventures in which the foreign investor’s participation does not exceed 49 per cent, a restriction that would increase up to 51 per cent in 2010.
Pipeline transport services would not be permitted for foreign participation, unless international treaties of which Viet Nam is a member otherwise provide.
Foreigners would aso be barred from providing transport verification and certification services; and provision of services of technical checks and analysis is limited in some geographic areas for security reasons;
Foreign participation in postal, wholesale and retail services would be subject to limitations set out in relevant regulations.
Decree 140 is significant in clarifying the concept of "logistics services" and acknowledging the restrictions provided for in Viet Nam’s WTO commitments. — VNS
Luatgiaviet
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