Vietnam to revise legislation regarding airline start-ups

Dino D'Amore
By Dino D'Amore June 28, 2016 20:09

Vietnam to revise legislation regarding airline start-ups

The Vietnamese Ministry of Transport has outlined proposed revisions to local legislation governing airline start-up minimum capitalization requirements. Under the existing Decree 30, a start-up operating ten aircraft or less, regardless if it is in the domestic or international market, is required to have a minimum capitalization of at least VND700 billion (US$32.6m).
Under the revisions, the Ministry wants all start-up carriers to be capitalized to the tune of at least VND100 billion (US$4.65m). Thereafter, for a start-up with between one and ten aircraft, the capital benchmark is at least VND300 billion (US$14m) for domestic services and at least VND700 billion (US$32.6m) for international services.
For start-ups with between eleven and thirty aircraft, investors are required to guarantee at least VND600 billion (US$28m) for a domestic operator and VND1 trillion (US$47m) for an international operator.
Additionally, foreign investment in local airlines is to be capped at 30% while Vietnamese citizens or investors are not to be permitted to hold more than 49% of charter capital. Locals may also only sell their shares to a foreign entity after two years from the date of a carrier’s acquisition of a license.
Dino D'Amore
By Dino D'Amore June 28, 2016 20:09