Capital Conditions in Air Transportation Business

 Air transportation is the conditional business line and conducted by air transportation enterprises. Air transportation business includes air transportation activity, advertising, marketing and sale of air transportation products on the market for the purpose of making profit.

Therefore, trading in this business line is subject to strict rules of law. The conditional business lines in the field of civil aviation are detailed in Decree 92/2016/ND-CP dated July 1st 2016.

Accordingly, in the field of air transportation, business must meet capital requirements as follows:

The minimum capital requirement to establish and maintain air transportation business:Operating up to 10 aircrafts: 700 billion VND for enterprises engaging in international air transportation; 300 billion VND for enterprises only engaging in domestic air transportation;

Operating between 11 and 30 aircrafts: 1,000 billion VND for enterprises engaging in international air transportation; 600 billion VND for enterprises only engaging in domestic air transportation;

Operating more than 30 aircrafts: 1,300 billion VND for enterprises engaging in international air transportation; 700 billion VND for enterprises only engaging in domestic air transportation;

The minimum capital requirements to establish and maintain general air transportation business: 100 billion VND.

Air transportation business that has foreign investment must meet the following conditions:The foreign parties take up less than 30% of charter capital;

Must have at least one Vietnam individual or legal entity hold the largest part of the charter capital. In case Vietnam legal entity has foreign investment capital, the foreign capital share should not exceed 49% of the charter capital of the legal entity.

The transfer of share and capital contribution of air transportation business without foreign investment to foreign investor shall be made only after 02 years from the date of issuance of the air transportation business license.

Enterprises have to send the share and capital transfer proposal to foreign investor to Civil Aviation Administration of Vietnam, which includes: The transferee, transfer condition, the number of transferring shares and capital contribution; Development plans for aircraft teams, business plan, development strategies referred to in Paragraph 1, Article 9 of the Decree 92/2016/ND-CP (if any).

Within 05 working days from the date of receiving the proposal from business, Civil Aviation Administration of Vietnam will report to the Ministry of Transportation the appraisal results.

Within 05 working days from the date of receiving the appraisal result report of the Civil Aviation Administration of Vietnam, the Ministry of Transportation will consider approval or disapproval and clearly state the reasons.

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers have Attorneys in Hanoi, Attorneys in Ho Chi Minh and Attorneys in Danang.

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What Goods Allowed to Be Imported into Vietnam?

  Foreign owned companies in Vietnam wishing to import and distribute physical goods into Vietnam must comply with many regulations. It is imperative that the right to conduct import business of foreign investors and FDI companies differ from the right of Vietnamese traders having no foreign direct investment capital because trading activities are considered conditional investment area.

1. General Principles of Imported Goods

In principle, as other countries, the importers have to follow the general rules when importing and distributing physical goods into Vietnam:

1. Not to import goods specified under the list of goods banned from import or suspended from import provided, published by Vietnam government;
2. Follow the guideline or import regulations and conditions required by ministries and ministerial-level agencies. There are specific conditions for importing certain goods which the importers have to follow i.e. certain medical equipment have to be approved by the Ministry of Health; Food, cosmetics products need to be testedReceiving and transmitting telecom equipment must be inspected by Ministry of Information and Communication; Books, CDs will be checked and scanned for contents to be approved by Ministry of Cultures, Sport and Tourism; Equipment must satisfy energy, environmental regulations to be inspected and labeled by Ministry of Science and Technology…
3. Implement other relevant laws, commitments of the Socialist Republic of Vietnam in treaties which it has signed or acceded to, and the roadmap announced by the Ministry of Industry and Trade.

2. Goods Prohibited to Be Imported into Vietnam

1. For the goods being banned to be imported and distributed in Vietnam, the importers have to follow strictly to avoid penalties:
2. Weapons, ammunitions, explosives (excluding industrial explosives), military technical equipment.
3. Assorted fireworks, sky lanterns, assorted devices causing interference to vehicle speedometers.
4. Used consumer goods: Textiles and garments, footwear, clothes; Electronic appliances; Refrigerating appliances; Home electric appliances; Medical equipment; Interior decoration goods;
5. Assorted publications banned from dissemination and circulation in Vietnam
6. Assorted cultural publications banned from dissemination and circulation or decided to be suspended from dissemination and circulation in Vietnam.
7. Right-hand drive means of transport; assorted automobiles and their spare parts which have their frame or engine numbers erased, modified or tampered with; Assorted motorcycles, special-use motorbikes and motorbikes which have their frame or engine numbers erased, modified or tampered with
8. Used supplies and vehicles
9. Chemicals in Annex III of the Rotterdam Convention.
10. Pesticides banned from use in Vietnam.
11. Wastes and scraps, refrigerating equipment using C.F.C.
12. Products and materials containing asbestos of the amphibole group
13. Schedule-I toxic chemicals; Chemicals on the list of banned chemicals

It is important for foreign trader wishing to establish a trading company in Vietnam to not only study the market demand in Vietnam but also the country’s law on import, export, customs law to ensure their compliance during the operation.  If doubted, the Client is suggested to reach out for help and advisory of law firms in Vietnam by qualified lawyers in the area of import, export and customs.

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