Foreign investors permitted to hold 34 percent stake at Vietnamese airlines

The limit for foreign investors’ ownership in Vietnamese air transport businesses will be increased to 34 percent from the current level of 30 percent, according to the Prime Minister’s decree signed last week.

(Illustrative photo:SGGP)

(Illustrative photo:SGGP)

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 percent 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 VND 300 billion (US$ 12.9 million). Businesses operating from 11 to 30 aircraft will need minimum capital of VND 600 billion, while those with more than 30 aircraft will be VND 700 billion.

In terms of airport service, the minimum capital for businesses is VND 100 billion, in which the foreign investor’s ownership will not exceed 30 percent of the charter capital.

The decree will come into effect on January 1, 2020.


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