Vietnam raises foreign ownership limit at domestic airlines to 34%

The ratio has been raised from the previous limit of 30%.

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.

The new decree is scheduled to take effect from 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 $13 million. 

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

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

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.