On February 20 2018, new logistics regulations under
Decree 163/2017/ND-CP took effect and rescinded Decree
140/2007/ND-CP. Although Decree 163 introduces a few changes,
including the digitalisation of logistics processes, it fails
to open up market access and provide further clarification as
expected, and may even create grey areas in practice.
Redefinition of 'logistics'
Unlike its predecessor, Decree 163 redefines logistics more
broadly, in harmony with descriptions in Vietnam's WTO service
sector commitments. For example, article 3.7 of Decree 163
provides the content of other logistics services which is
similar to section II.11.H.d of the WTO commitments. In
addition, article 3 of Decree 163 excludes pipeline transport
and specifies all types of freight transportation services
while keeping silent on 'passenger transport'.
No changes to foreign ownership limitations
Decree 163 does not give any extra room for foreign
investment and merely restates the foreign ownership
limitations of various logistics services as stipulated in the
WTO commitments and its preceding Decree. Given the silence on
passenger transport, the Decree is equally silent on relevant
foreign ownership in such services. As such, foreign investors
should check the foreign ownership limitations on passenger
transport in the WTO and other relevant domestic regulations
before making an investment decision.
New conditions added but could increase uncertainty
The regulation applies a few new conditions for foreign
investors, such as allowing maritime freight transport
companies with up to 49% foreign ownership to employ up to
one-third non-Vietnamese crew members serving in ships
registered in Vietnam or flying the Vietnamese flag. The
captain and the first officer must be Vietnamese citizens.
Although this new condition was not stated in the old
regulations, it is not entirely new as it was already
stipulated in the WTO commitments.
Another new condition in Decree 163 is that it requires a
logistics business conducting part of or its entire business
electronically over the internet, mobile or other open networks
to comply with e-commerce regulations (ie notifying/registering
with the authority of e-commerce services and protecting
personal information and consumer interests).
Given that there is no further guidance on such e-logistics
business, this requirement seems very general and could apply
to any means of electronic communication (eg via email or a
social network page). Consequently, this new regulation may
create a grey area in practice which could lead to confusion
among enterprises and even for the authorities.
||Nguyen Tuan Anh