Singapore-based APL-NOL has acquired a license from the Vietnamese government to set up a wholly-foreign owned shipping logistics company in the highly protected sector.
APL-NOL Vietnam, the first wholly Singapore invested firm, valued at US$1 million will provide shipping logistics services inside and outside of the country.
It plans to set up its head office in the downtown District 1, the southern hub Ho Chi Minh City.
The proposal on APL-NOL Vietnam establishment made by the Singapore shipping logistics firm received the go-ahead in-principle from the government in September, in line with the bilateral agreement Singapore signed to support Vietnam’s entry into WTO.
The establishment is also in tune with another agreement inked between the two countries in December 2005.
The shipping logistics sector is restricted until Vietnam becomes a full WTO member, and investments in the industry are under tight control.
Foreign firms, operating with more capital and expertise have only been allowed limited involvement in the sector to protect local shipping logistic firms.
Under government Decree 10/2001/ND-CP, which provides guidelines to invest in shipping services, a foreign party can hold no more than 49 percent of the total investment capital in any foreign-invested firms.
Upon WTO entry, a foreign shipping operation in Vietnam can set up joint ventures with 51 percent foreign ownership, and after five years from the date of accession, can run a wholly-foreign owned enterprise.
At present, only one Danish and one Japanese shipping firm have been operating under wholly foreign-invested status in Vietnam.
The $1 million Danish Maersk A/S, which opened last year, and the recently opened $3 million Japanese Mitsui O.S.K.Lines Vietnam both resulted from Vietnam’s commitments to the EU and Japan in protected sectors.
Pressure after-WTO will certainly be on the local logistics sector to perform.
Large Vietnamese companies include Vietnam Ocean Shipping Co (Vosco), Vinaship and Falcon Shipping Co – which have managed to develop their own brands and gradually adapt with help from reliable foreign partners.
But by and large, industry experts feel most local companies would be unable to compete with bigger shipping lines.
APL-NOL Vietnam, the first wholly Singapore invested firm, valued at US$1 million will provide shipping logistics services inside and outside of the country.
It plans to set up its head office in the downtown District 1, the southern hub Ho Chi Minh City.
The proposal on APL-NOL Vietnam establishment made by the Singapore shipping logistics firm received the go-ahead in-principle from the government in September, in line with the bilateral agreement Singapore signed to support Vietnam’s entry into WTO.
The establishment is also in tune with another agreement inked between the two countries in December 2005.
The shipping logistics sector is restricted until Vietnam becomes a full WTO member, and investments in the industry are under tight control.
Foreign firms, operating with more capital and expertise have only been allowed limited involvement in the sector to protect local shipping logistic firms.
Under government Decree 10/2001/ND-CP, which provides guidelines to invest in shipping services, a foreign party can hold no more than 49 percent of the total investment capital in any foreign-invested firms.
Upon WTO entry, a foreign shipping operation in Vietnam can set up joint ventures with 51 percent foreign ownership, and after five years from the date of accession, can run a wholly-foreign owned enterprise.
At present, only one Danish and one Japanese shipping firm have been operating under wholly foreign-invested status in Vietnam.
The $1 million Danish Maersk A/S, which opened last year, and the recently opened $3 million Japanese Mitsui O.S.K.Lines Vietnam both resulted from Vietnam’s commitments to the EU and Japan in protected sectors.
Pressure after-WTO will certainly be on the local logistics sector to perform.
Large Vietnamese companies include Vietnam Ocean Shipping Co (Vosco), Vinaship and Falcon Shipping Co – which have managed to develop their own brands and gradually adapt with help from reliable foreign partners.
But by and large, industry experts feel most local companies would be unable to compete with bigger shipping lines.