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Vietnam Today

Foreign ownership cap in air transport lifted

Released at: 15:23, 20/11/2019

Foreign ownership cap in air transport lifted

Illustrative image (Photo: Viet Tuan)

Ownership limit to increase from 30% to 34% under new government decree.

by Linh Chi

The Vietnam News Agency on November 19 quoted a government decree signed by Prime Minister Nguyen Xuan Phuc last week as stating that the foreign ownership limit (FOL) in Vietnam’s air transport businesses will be increased to 34 per cent from the current 30 per cent.

Decree No. 89/2019/ND-CP, which was a revision of Decree No. 92/2016/ND-CP issued in 2016 and will be effective from January 1, 2020, includes regulations relating to conditional business lines in the fields of air transport and general aviation activities.

The decree also requires air transport businesses have at least one Vietnamese individual or a Vietnamese legal entity holding the largest proportion of charter capital. In cases where the Vietnamese legal entity has foreign capital, such foreign capital shall not exceed 49 per cent.

According to the Ministry of Transport, which drafted the decree, the new FOL not only ensures the attraction of foreign investment capital in enterprises but also satisfies the interests of domestic investors.

With the goal of reducing and simplifying business conditions and creating favorable conditions for investors to access the aviation market, the new decree regulates that an air transport business operating ten aircraft or less must have minimum capital, including ownership capital and loans, of VND300 billion ($12.9 million). Businesses operating from eleven to 30 aircraft will need minimum capital of VND600 billion ($25.8 million), while those with more than 30 aircraft will need VND700 billion ($30.2 million).

In terms of airport services, the minimum capital for businesses is VND100 billion ($4.3 million), in which foreign investor’s ownership is not to exceed 30 per cent.

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