Wednesday, 19 Sep 2018
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Vietnam to increase foreign ownership limit at domestic airlines to 49%

Updated at Friday, 13 Jul 2018, 09:14
The Hanoitimes - There will be no difference in the required minimum amount of capital for airlines providing international and domestic air transport services, according to the Ministry of Transport (MoT).
Under MoT's new draft decree, instead of the previous limit of 30% of charter capital, foreign investors in the aviation sector can now own up to 49% of charter capital in a domestic airline.
 
Illustration photo.
Illustration 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 MoT's draft decree amending Decree No.92, which stipulates conditional business sectors or activities in the civil aviation industry. 

Moreover, there must be at least one Vietnamese natural or legal entity owning the highest share of charter 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. 

The draft decree also removed requirement that legal representative of an airline must be a Vietnamese national.  

Concerning the minimum amount of capital required for establishment and maintenance of an airline, the draft decree stipulated that an airline operating up to 10 aircraft must have VND700 billion (US$30.3 million). 

In the current decree, this regulation is subject to airlines providing international air transport services, while an airline operating domestic routes only needs at least VND300 billion (US$13 million). 

Under existing legislation, for an airline operating from 11 to 30 airplanes, the minimum amount of capital shall be VND1 trillion (US$43.25 million) required for an airline providing international services, 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 VND1 trillion (US$43.25 million), while airlines with up to 30 airplanes are required to have VND1.3 trillion (US$56.2 million).

Currently, for an airline operating up to 30 airplanes, airline providing international routes is required 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.

Vietnam currently has four airlines, including national carrier Vietnam Airlines, budget operator Jetstar Pacific Airlines (partly owned by Vietnam Airlines), budget carrier Vietjet Aviation, and Vietnam Air Services (VASCO).

On July 9, Prime Minister Nguyen Xuan Phuc gave his approval to the FLC-backed Bamboo Airways investment project at Phu Cat Airport, Binh Dinh province, which will later on become Vietnam's fifth airline.
Ngoc Thuy
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