What is the logistics service business? Business conditions?

Logistics service business requires a deep understanding of operating procedures and legal compliance. This activity involves managing the flow of goods and information from the point of origin to the point of consumption. Mastering business conditions and legal regulations helps businesses operate effectively. This article will present relevant aspects in detail.

What is logistics?

According to the provisions of Article 233 of the Law on Commercial 2005, logistics services is a commercial activity whereby a trader organizes the performance of one or more tasks including receiving goods, transporting, warehousing, storing, carrying out customs procedures, other paperwork, consulting customers, packaging, marking, delivering or other services related to goods as agreed with customers to receive remuneration. Logistics services are transliterated in Vietnamese as logistics services.

Enterprises need to clearly determine the type of logistics that is suitable for their business model. Effective logistics operations optimize costs and improve competitiveness.

Businesses operating in the logistics field need to clearly understand regulations on transportation, warehousing, and goods management. Complying with these regulations helps avoid legal risks. Logistics activities need to be carried out efficiently to ensure customer satisfaction. Information management is a key factor in logistics. Businesses need to invest in information systems to track and manage goods.

Logistics service business conditions

To do logistics service business in Vietnam, businesses need to meet legal conditions according to the law. These conditions are specified in Article 234 of the Law on Commercial and guided by Article 4 of the Decree 163/2017/ND-CP. Conditions include:

1. Traders providing specific services under logistics services must meet the investment and business conditions prescribed by law for that service. Specific Logistics services are specified in Article 3 of Decree 163/2017/ND-CP.

2. Traders that conduct part or all of logistics business activities by electronic means connected to the Internet, mobile telecommunications networks or other open networks, in addition to meeting the provisions of law for specific services, must also comply with regulations on e-commerce.

3. Conditions for foreign investors in logistics service business:

In addition to meeting the above conditions, foreign investors belonging to countries and territories that are members of the World Trade Organization are provided with logistics services under the following conditions:

In case of cargo transportation service business belonging to marine transportation services (except domestic transportation):

• To establish companies operating fleets flying the Vietnamese flag or to contribute capital, buy shares, or contribute capital in enterprises, in which the capital contribution ratio of foreign investors does not exceed 49%. The total number of foreign seafarers working on ships flying the Vietnamese flag (or registered in Vietnam) owned by these companies in Vietnam is not more than 1/3 of the ship’s capital. The captain or first mate must be a Vietnamese citizen.
• Foreign shipping companies are allowed to establish businesses or contribute capital, buy shares, or contribute capital in the business.

In case of container handling service business belonging to maritime transport support services (some areas may be reserved to provide services or apply licensing procedures in these areas), it is possible to establish an enterprise or contribute capital, buy shares, or contribute capital in the enterprise, in which the capital contribution ratio of foreign investors does not exceed 50%. Foreign investors are allowed to establish a commercial presence in Vietnam in the form of business cooperation contracts.

In case of container loading and unloading service business belonging to services supporting all modes of transport, except services provided at airports, it is allowed to establish a business or contribute capital, buy shares, or contribute capital in the business, in which the capital contribution ratio of foreign investors does not exceed 50%.

In the case of customs clearance service business belonging to maritime transport support services, you are allowed to establish a business or contribute capital, buy shares, or capital contributions in the enterprise, including capital contributions from domestic investors. Foreign investors are allowed to establish a commercial presence in Vietnam in the form of business cooperation contracts.

In case of business of other services, including the following activities: Checking bills of lading, freight brokerage services, goods inspection, sampling and weight determination services; goods receiving and acceptance services; Transport document preparation services, establishment of a business or capital contribution, purchase of shares or capital contribution in an enterprise, including capital contribution of domestic investors.

In case of freight transport services belonging to inland waterway transport services, freight transport services belonging to railway transport services, it is allowed to establish a business or contribute capital, buy shares, or contribute capital in the enterprise, in which the capital contribution ratio of foreign investors does not exceed 49%.

In case of freight transport service business belonging to road transport services, it is carried out through the form of business cooperation contract or establishment of an enterprise or capital contribution, purchase of shares, capital contribution in the enterprise, in which the capital contribution ratio of foreign investors does not exceed 51%. 100% of the company’s drivers must be Vietnamese citizens.

In the case of an air transport service business, it must comply with the provisions of aviation law.

In case of technical analysis and inspection services business:

• For services provided to exercise the authority of the Government, they are carried out in the form of enterprises with capital contributions from domestic investors after three years or in the form of enterprises with no restrictions on capital contributions from foreign investors after five years, from the time the private service provider is allowed to do business in those services.
• Do not provide inspection and certification services for transport vehicles.
• The implementation of technical analysis and inspection services is limited to geographical areas determined by competent authorities for national security and defense reasons.

4. In case a foreign investor is subject to international treaties with different regulations on logistics service business conditions, the investor may choose to apply the investment conditions specified in one of those treaties.

Mastering logistics service business conditions helps businesses operate legally and effectively. Businesses need to update the latest regulations to ensure legal compliance.

Some notes when starting a Logistics service business

When starting a logistics service business, businesses need to pay attention to some important issues. Businesses need to research the market and identify target customers. Businesses need to build a detailed and feasible business plan.

• Businesses need to choose the type of logistics service that suits their capabilities and resources.
• Businesses need to build a network of trusted partners.
• Businesses need to invest in information technology to manage logistics activities effectively.
• Businesses need to focus on service quality and customer satisfaction.
• Businesses need to build brand and reputation in the market.

Businesses need to master regulations on transportation, warehousing, and goods management. Complying with these regulations helps avoid legal risks. Logistics activities need to be carried out efficiently to ensure customer satisfaction. Information management is a key factor in logistics. Businesses need to invest in information systems to track and manage goods.

Frequently asked questions about logistics service business

Here are some frequently asked questions:

What are the common types of freight transportation in logistics services?

Including road, sea, air and rail transport.

What do customs procedures in logistics services include?

Including customs declaration activities, goods inspection, and payment of import and export taxes.

What tasks does warehouse management in logistics include?

Including warehousing, warehousing, storage of goods and inventory management activities.

What capital conditions do businesses need to meet when doing logistics service business?

Capital conditions depend on the specific type of logistics service that the enterprise operates.

Are foreign investors restricted when doing logistics service business in Vietnam?

Have. The investment capital ratio as well as some professions are limited. Details are specified in the commercial law and Decree 163/2017/ND-CP.

What types of transport documents are included in logistics?

Including bills of lading, shipping notes, shipping invoices, and other related documents.

What are the benefits of using 3PL services?

Helps businesses focus on core business activities, save costs, and improve logistics efficiency.

What information technology do businesses need to equip to effectively manage logistics?

Includes warehouse management software, shipping tracking systems, and data analysis tools.

What are common risks in the logistics service business?

Commodity risks, transportation risks, legal risks and information risks.

How to choose a reputable logistics service provider?

It is necessary to consider experience, capacity, scope of services, and reviews from previous customers.

Logistics service business registration service at Long Phan Consulting Company

Long Phan Consulting Company providing professional logistics service business registration services. Customers will receive comprehensive advice and support during the registration process. Long Phan Consulting Company helps customers save time and costs, including:

• Consulting on logistics service business conditions.
• Prepare documents and procedures for registering logistics service business.
• Support customers in the process of working with state agencies.
• Providing consulting services related to logistics activities.

Using Long Phan Consulting’s services helps customers feel secure and focus on their main business activities. Businesses need to master regulations on transportation, warehousing, and goods management. Complying with these regulations helps avoid legal risks.

Conclude

Logistics service business in Vietnam offers many development opportunities. Customers need to master business conditions and legal regulations. Long Phan Consulting Company is ready to support customers in the process of registering a logistics service business. Contact the hotline 0906735386 for detailed advice.