23 January, 2017
New Maritime and Shipping Regulations
On 29 November 2016, the Government issued Decree No. 160/2016/ND-CP on conditions for maritime transportation services, shipping agency services, and shipping towage services ("Decree 160") which shall take effect from 1 July 2017 (replacing Decree No. 30/2014/ND-CP on the same subject). The Decree 160 confirms the limitation of foreign ownership to 49% in companies engaging in domestic maritime transportation services, shipping agency services or shipping towage services as committed in Vietnam's WTO Commitments.
Decree 160 also introduces new conditions for operating the aforementioned services, for example:
- maritime transportation services companies have to obtain a bank guarantee with a minimum value of VND 5 billion or VND 500 million to guarantee the ship owner's obligation to its crews in relation to international maritime transportation, or domestic maritime transportation, respectively; and
- shipping towage services companies can use foreign-flag towing vessels to provide the service in Vietnam if Vietnam-flag towing vessels have not met conditions to do this service (the Ministry of Transportation will inform the capacity of Vietnam-flag towing vessels annually).
This Decree is expected to provide clear and transparent conditions for investors who wish to invest in maritime transportation services, shipping agency services and shipping towage services.
New List of Conditional Business Lines
On 22 November 2016, after much debate, the National Assembly of Vietnam adopted Law No.03/2016/QH14 to modify, supplement, and categorise the list of conditional business lines issued under the Law on Investment 2014.
The issuance of the list of conditional business lines was a solution by the legislators of Vietnam to limit the powers of the authorities from issuing by-laws that impose additional licensing conditions on or request sub-licenses for business sectors. As a result, the administrative authorities may now only provide conditions on certain business lines as specified in the list of conditional business lines. The list that was initially issued under the Law on Investment 2014 was not readily applicable in practice – hence, the recent amendments.
This list is expected to preclude the burdensome administrative requirements for investors who invest in business activities which were provided for in the previous list but are excluded in this list.
For further information, please contact:
Eng Beng SC, Partner, Rajah & Tann