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Logistics Business Conditions for Foreign-Invested Companies

7 min readFLAT LAW FIRM
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"Logistics" is not one business line — it is a family of dozens of sub-sectors: transport, warehousing, freight forwarding, agency, distribution, multimodal transport. Each sub-sector has different business conditions and foreign ownership limits.

This article maps the conditions framework for foreign-invested companies doing logistics in Vietnam.

Contents

1. Logistics is a conditional business sector

Vietnamese law places many logistics sub-sectors in the conditional business lines group: you may only operate once you satisfy the conditions and (for many sub-sectors) obtain a license.

Two practical consequences:

  1. Registering the business line on the ERC/business registration is not enough — sectoral conditions must be met before operating;
  2. Conditions must be maintained throughout operations, not just at application.

A third consequence catches newcomers: authorities verify conditions against your actual operations, not your application narrative. A forwarding company whose "office" is a virtual address and whose "qualified personnel" left months ago will fail a post-licensing inspection even though the paperwork was perfect at application.

2. Market-access conditions for foreign investors

For foreign-invested companies, one more layer comes before sectoral conditions: market access — whether foreign investors may enter that sub-sector at all, and the maximum foreign ownership percentage.

Market access is determined by:

  • International commitments (WTO, CPTPP, EVFTA and other FTAs): each with its own logistics opening schedule;
  • The Law on Investment 143/2025/QH15 and the list of sectors with restricted market access for foreign investors;
  • Sectoral legislation for transport, maritime, aviation.

The golden rule: check the exact sub-sector, never apply one sub-sector's answer to another. "Warehousing allows 100%" does not mean "road transport does too".

In practice, investors should sequence the market-access check before spending on anything else: the ownership cap determines the deal structure (wholly foreign-owned versus joint venture, and the local partner's role), which in turn determines the IRC application. Discovering a 49% cap after signing a joint-venture agreement with the wrong partner — or after promising 100% ownership to headquarters — is an expensive lesson. Commitments also evolve: newer FTAs sometimes open sub-sectors wider than the WTO schedule, so check the most favorable applicable commitment rather than stopping at the WTO baseline.

3. Typical groups of business conditions

Depending on the sub-sector, conditions usually fall into these groups:

  • Capital: minimum capital, deposits or guarantees — for some transport and international forwarding sub-sectors;
  • Personnel: responsible persons with qualifications and professional certificates as required;
  • Facilities: warehouses, yards, vehicles, and equipment meeting technical standards;
  • Organization: management systems, safety procedures, liability insurance;
  • Ownership ratio: caps on foreign-held capital in some sub-sectors.

Specific levels are checked against current sub-sector regulations — this article states no figures to avoid going stale when texts change. Note also that conditions can tighten mid-project: a sub-sector reclassified into a more restricted group by a new decree changes the compliance baseline for existing operators, not just new entrants. Monitoring regulatory updates is part of the maintenance obligation, not an optional extra.

4. Sub-sectors needing special attention

Sub-sectors where foreign-invested companies commonly stumble:

  • Domestic transport (road, inland waterway): usually restricted or tightly conditioned for foreign investors;
  • International multimodal transport: separate capital/deposit and organizational conditions;
  • Agency and forwarding services: "softer" conditions, but market access must still be checked;
  • Warehousing and distribution: relatively open, but bonded warehouses and CFS have their own rules.

The list above is illustrative — not exhaustive and not a substitute for checking current texts.

Two practical traps deserve emphasis. First, misclassification: describing your activity as "general logistics services" on paper while actually running domestic trucking invites reclassification risk — the authority looks at what you do, not what you call it. Second, scope creep: a warehousing company that starts doing last-mile delivery has crossed into a different sub-sector with different conditions, and the original license does not cover it. Growth plans should be checked against sub-sector boundaries before new service lines launch, not after the authority asks.

5. Conditions vs. licenses: do not confuse them

Two concepts often conflated:

  • Business conditions = the "standards" to meet (capital, personnel, facilities, ownership ratio);
  • License = the "certificate" the state issues once you prove you meet the standards.

Meeting conditions without applying for the license still means you may not operate a conditional line. Holding a license but later failing the conditions can mean revocation (see section 6).

For application procedures for each logistics license, see the article "Logistics licenses for foreign-invested companies" (T-300 — in preparation, link will be added at publish) — which walks through the documentary requirements and authority for each license type.

6. Maintaining conditions after licensing

The obligation does not end at licensing. Throughout operations, the company must maintain the committed conditions:

  • Authorities may inspect periodically or unexpectedly;
  • If conditions lapse (capital reduced, key personnel left, facilities degraded): remedy within the deadline, or face suspension or revocation;
  • Major changes (ownership change, capital increase, scope expansion) may trigger reporting or re-approval obligations.

This is where foreign-invested companies get complacent: sweating the license application, then "forgetting" to maintain.

7. Pre-investment conditions checklist

Before putting money into logistics, run this checklist:

  1. Identify the exact sub-sector by industry code and actual activity description (not commercial habit);
  2. Check market access: international commitments + restricted list — allowed or not, maximum ownership;
  3. Check sectoral conditions: capital, personnel, facilities, which licenses;
  4. Assess feasibility: what exists, what must be built, at what cost;
  5. Sequence the procedures: IRC → ERC → sectoral licenses (this order matters);
  6. Plan maintenance: who owns post-licensing inspections and periodic reporting.

Complete all six before signing warehouse leases, buying trucks, or hiring — the reverse order is the fastest way to burn money in logistics.

A final sequencing note: foreign investors often underestimate step 5's lead times. The IRC stage is where market-access conditions get tested against your specific project, and authorities may take weeks to confirm a sub-sector classification you assumed was obvious. Build that confirmation into the timeline before committing to leases or equipment with fixed start dates — rent paid on a warehouse you cannot legally operate from is pure loss.

8. Frequently asked questions

Can a 100% foreign-owned company do logistics in Vietnam?

It depends on the sub-sector. Some logistics services allow 100% foreign ownership (e.g., warehousing, agency, per commitments and current law); others cap the ownership ratio (transport). Check the market-access conditions of each specific sub-sector before registering — there is no single answer for "logistics" as a whole.

Is minimum capital required for logistics business?

Some sub-sectors require minimum capital or deposits under sectoral regulations (e.g., international multimodal transport). Check the current regulations of each sub-sector; this article states no figures to avoid going stale.

Can foreign-invested companies do domestic transport?

Domestic transport (inland road, inland waterway) is usually restricted or tightly conditioned for foreign investors under international commitments and current law. Check the market-access conditions of the exact sub-sector.

Are business conditions and licenses the same thing?

No. Business conditions are the "standards" to meet (capital, personnel, facilities, ownership ratios); a license is the "certificate" the authority issues once you prove you meet them. Meeting conditions without applying for the license still means you may not operate a conditional business line.

What happens if you operate without meeting the conditions?

Administrative penalties, possible suspension or license revocation; signed contracts remain effective with counterparties (unless the law provides otherwise), but the company bears legal and reputational risk. Worse: it can affect the IRC and legal standing.

What if conditions change after licensing?

Conditions must be maintained throughout operations, not just at application. Authorities may inspect; if conditions lapse (capital reduced, key personnel left), remedy within the deadline or face suspension or revocation.

9. When to work with a lawyer

From before choosing the sub-sector — because choosing wrong (activity description mismatching market-access conditions) means redoing every later procedure. A lawyer helps you: identify the correct sub-sector; check market-access and sectoral conditions against current texts; structure suitable capital ownership; and handle the full IRC → ERC → licensing chain smoothly.

FLAT Law Firm advises foreign-invested companies on logistics investment: from conditions checks and deal structuring to licensing and post-licensing compliance. Engage us at the sub-sector selection stage — the earlier the conditions map is drawn, the cheaper every later step becomes for your investment. Contact our hotline at 0988424851 for advice on your plan.

References

  1. Law on Investment No. 143/2025/QH15 (replacing Law on Investment 61/2020/QH14), effective 01/03/2026.
  2. Commercial Law No. 36/2005/QH11, effective 01/01/2006.
  3. Vietnam's international services commitments (WTO, CPTPP, EVFTA…), per each commitment's schedule.