31st Sea Games - Vietnam 2021 Covid-19 Pandemic
Home / Investment / News
Vietnam raises cap on foreign ownership at domestic airlines to 34%
Ngoc Thuy 16:29, 2019/11/18
There will be no difference in the required minimum amount of capital for airlines providing international and domestic air transport services.

Instead of the previous limit of 30% of registered capital, foreign investors in the aviation sector can now own up to a 34% stake in a domestic airline, according to a new government decree.

 Illustrative photo.

Concurrently, there will be no difference in the required minimum amount of capital for airlines providing international and domestic air transport services, stated in the government’s Decree No.89 amending Decree No.92, issued on November 15, stipulating conditional business sectors or activities in the civil aviation industry. 

The decree is scheduled to become effective on January 1, 2020.

Moreover, there must be at least one Vietnamese natural or legal entity owning the highest share of registered capital in a foreign-invested airline. In case a Vietnamese legal entity has foreign investment capital, the foreign holding must not exceed 49% of that entity. 

Concerning the minimum amount of capital required for establishment and maintenance of an airline, the decree stipulates that an airline operating up to 10 aircraft must have at least VND300 billion (US$13 million). 

In the previous decree, airlines providing international air transport services are required to have at least VND700 billion (US$30.2 million) in registered capital, while an airline operating domestic routes needs at least VND300 billion (US$13 million). 

For an airline operating from 11 to 30 airplanes, the minimum capital base was VND1 trillion (US$43.25 million) required for an airline providing international services in the previous legislation, and VND600 billion (US$25.95 million) for an airline operating domestically.

However, the new decree recommends all airlines operating from 11 to 30 airlines must have at least VND600 billion (US$25.95 million), while airlines with over 30 airplanes are required to have a minimum registered capital of VND700 billion (US$30.2 million).

For an airline operating over 30 airplanes, the previous legislation required airline providing international routes to have at least VND1,300 billion (US$56.2 million), while VND700 billion (US$30.3 million) is required for an airline providing domestic routes.

Decree No.89 also removes the requirement on the transfer of stake and capital contribution in foreign-invested airlines to foreign investors which would only be proceeded two years after the issuance of aviation license.

For companies providing services at airports, the minimum capital requirement is VND30 billion (US$1.3 million). The rate of foreign ownership in such enterprises is at maximum of 30%.

Such requirement is much lower than previous legislation with minimum capital of VND100 billion (US$4.3 million) for enterprises providing services at domestic terminal, and VND200 billion (US$8.6 million) for those at international terminal.

TAG: Vietnam foreign ownership limit airlines aviation charter capital Decree No. 89
Other news
16:26, 2023/26/02
FDI to Vietnam’s real estate rises by over 70% in 2022
Vietnam's real estate market continues to show strong appeal to foreign investors despite global economic difficulties.
21:36, 2023/36/12
Laos vows to facilitate Vietnam's investors
The Government of Laos pledged to amend the law to facilitate the investment of Vietnamese companies that have poured more than US$5.34 billion in the neighboring country so far.
17:49, 2023/49/02
Hanoi lures nearly $1.7 billion in foreign investment in 2022
The capital city ranks among the top localities in foreign direct investment attraction.
17:33, 2022/33/11
European Investment Bank will provide Vietnam climate finance
Vietnam's Minister of Finance will visit Luxembourg soon to discuss the update of mutual agreements and address issues in regard to EIB-funded projects in the Southeast Asian country.
16:56, 2022/56/09
Vietnam stands as credible partner for foreign investors
The Vietnamese Government has made efforts to create favorable conditions for local and foreign businesses to ensure their long-term operation.
12:47, 2022/47/01
Vietnamese Gov’t to divest state capital at 141 businesses until 2025
The Government is determined to accelerate the divestment and privatization process at state firms that have stagnated due to the impacts of the Covid-19 pandemic.