Foreign express enterprises are not ready to set up wholly foreign-owned businesses in Vietnam.
DHL-VNPT Express illustration photo
Recently, on the occasion of its new $1.4 million Hanoi facility close to Noi Bai international airport, when asked that DHL whether would set up a wholly owned entity in Vietnam or not, DHL-VNPT Express director Tim Baxter said: “We see that business cooperation between DHL and VNPT Express is bringing the desired effect. We haven’t a tendency to invest independently in Vietnam”.
“A joint venture model is similar with a marriage. If the marriage is going very well, it will be continued. At present, both DHL and VNPT Express are supporting together well,” he said.
DHL-VNPT Express was the first among three express joint-ventures in Vietnam when the country became a member of World Trade Organization (WTO). DHL has held 51 per cent of shares and VNPT Express 49 per cent in the joint venture.
DHL has joined hands with VNPT Express for five years with $20 million total investment capital in Vietnam.
Baxter said: “We will cooperate for the next five years. For DHL, our strong point is capacity of connection with a global network composed of more than 220 countries and territories and about 275,000 employees worldwide”.
In a similar situation, United Parcel Service (UPS) enterprise, which has operated in Vietnam for15 years, said it had not yet made a decision to set up its own company with 100 per cent capital in Vietnam.
In early 2010, UPS officially set up a joint venture with Vietnamese partner in which, the leading US express firm holds 51 per cent of shares.
According to Decree 121/2008/ND-CP dated December 3, 2008, foreign investors are allowed to set up joint ventures with domestic investors with foreign parties holding more than 51 per cent and even establish 100 per cent foreign-owned firms in Vietnam’s express services from January 11, 2012.