Legal Framework to Know When Investing in Domestic Delivery Business Model in Vietnam

Jun 18

With the explosive growth of e-commerce in Vietnam, domestic delivery services have become an essential link in the supply chain. Thanks to a young population, high smartphone penetration, and increasingly common online shopping habits, the delivery market presents a highly attractive opportunity for international investors. However, to seize this opportunity, investors must thoroughly understand the legal framework in Vietnam – a developing market with evolving laws but still considerable challenges.

So, if you are a foreign investor aiming to enter the logistics sector, specifically the domestic delivery service in Vietnam – where should you start? What regulations might impact your ability to invest and operate?

Can Foreign Investors Establish a Domestic Delivery Company in Vietnam?

Although promising, the domestic delivery sector is not entirely open to all investors. For foreign investors, this is a conditional business line, meaning there are specific restrictions on ownership, legal structure, and licensing procedures. This section provides a legal overview before you make any investment decisions.

Sector Restrictions and Ownership Ratio

According to Vietnamese law, domestic delivery services fall under the logistics industry – a conditional investment sector for foreign investors. Particularly, freight transportation by automobile is subject to Vietnam’s WTO commitments, implying ownership limitations.

Foreign investors are allowed to hold a maximum of 51% of the charter capital in a domestic delivery company. Therefore, forming a joint venture with a Vietnamese partner is required.

Licensing and Vehicle Requirements

To operate legally, the company must obtain a Road Transport Business License from the Department of Transport. Conditions include:

Compliance with appropriate business type: contract-based freight transport or tech-based freight delivery.
Ownership or lease of transportation vehicles.
Meeting safety and driver qualifications.
Implementing a vehicle management system with GPS tracking devices.

Legal Roadmap for Foreign Investors

Understanding the opportunity is only the beginning. Investors need a clear legal roadmap to establish a domestic delivery company in Vietnam. Lack of preparation or misunderstanding of laws could lead to time loss, high costs, or missed competitive advantages. This section outlines the legal process step by step.

Step 1: Establish a Foreign-Invested Enterprise (FIE)

This is the foundational step. Investors need to:

Prepare and submit the Investment Registration Certificate (IRC) application.
File with the Department of Planning and Investment of the relevant province/city.
Demonstrate financial capacity, legal status, and a suitable business plan.

Joint venture with a Vietnamese partner is mandatory to meet the ownership ratio.

Step 2: Obtain the Enterprise Registration Certificate (ERC)

Once the IRC is granted, proceed to register the business with the Business Registration Office. Specify the company type (typically LLC or JSC), legal representative, headquarters address, and business lines.

Step 3: Obtain the Road Transport Business License

For transport activities, the company must:

Prepare and submit the application.
Verify the vehicle fleet, lease contracts if not owned.
Register the vehicles and install tracking equipment as required.

Step 4: Post-Incorporation Procedures

After licensing, the company must:

File initial tax registration and open a bank account.
Contribute capital within the committed timeline.
Register employees, enroll in social insurance, and set up labor regulations.

Establishing a domestic delivery company in Vietnam is a lucrative opportunity, yet requires navigating a complex legal environment. Choosing the right joint venture structure, complying with legal requirements, and following proper procedures are critical to success.

DEDICA – your trusted legal partner for international investment, is ready to support you from the very first step, turning business plans into sustainable results.

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