The limit for foreign investors’ ownership in Vietnamese air transport businesses will be increased to 34 per cent from the current 30 per cent, according to a decree signed by Prime Minister Nguyen Xuan Phuc last week.
Decree 89/2019/ND-CP, revised from Decree 92/2016/ND-CP issued in 2016, includes regulations relating to conditional business lines in the fields of air transport and general aviation activities.
The decree also requires air transport businesses to have at least one Vietnamese individual or a Vietnamese legal entity holding the largest portion of charter capital. In case the Vietnamese legal entity has foreign capital, the foreign capital shall not exceed 49 per cent of the legal entity’s charter capital.
According to the Ministry of Transport, which drafted the decree, the foreign investors’ new ownership cap does not only ensure the attraction of foreign investment capital into enterprises but also the interests of domestic investors.
With the goal of reducing and simplifying business conditions and creating favourable conditions for investors to access the aviation market, the new decree regulates that an air transport business operating 10 aircraft or fewer will need to have a minimum capital, including ownership capital and loan, of 300 billion dong ($12.9 million).
Businesses operating from 11 to 30 aircraft will need minimum capital of 600 billion dong, while those with more than 30 aircraft will be 700 billion dong.
In terms of airport service, the minimum capital for businesses is 100 billion dong, in which the foreign investor’s ownership will not exceed 30 per cent of the charter capital.
The decree will come into effect on January 1, 2020.
VIET NAM NEWS/ASIA NEWS NETWORK