The Government’s Decree 92/2016 ND-CP issued on July 1 says enterprises in the civil aviation sector that want to add new business activities are not required to produce banks’ confirmations. They can now choose to submit their two latest annual financial reports to apply for a new license.

The liberal rule came out after Vietstar Airlines was caught in technicalities earlier this year when it sought an air transport license.

The Ministry of Transport in March wrote to the Government proposing an exception. The ministry said the carrier should be allowed to use its financial reports as evidence of its chartered capital. At the time, its chartered capital was only VND625.7 billion (US$28.06 million), compared to the required level of VND700 billion as regulated by Government Decree 30/2013.

The Government turned down the request, insisting a bank confirmation was a must.

It is not immediately clear why the ministry has proposed easing business requirements for air transport.

Decree 92 also has more specific regulations regarding aviation firms with foreign direct investment (FDI). Particularly, foreign capital must account for no more than 30% of a firm’s chartered capital and there must be at least a Vietnamese individual or entity holding a majority  stake. Foreign holdings in the Vietnamese entity, if any, must not exceed 49% of an entity’s chartered capital.

If air transport firms without foreign investment want to transfer their stake to foreign investors, the transfer could only proceed after two years.

Source: thesaigontimes.vn