Dutch firms seek business and investment opportunities in Vietnam’s aviation

13:12 | 15/04/2019

The Netherlands, the biggest EU investor in Vietnam, is seeking to venture further into the country’s burgeoning aviation sector to cash in on growing demands amid the upcoming enforcement of the landmark EU-Vietnam Free Trade Agreement.

dutch firms seek business and investment opportunities in vietnams aviation
Dutch aviation firms see a wide selection of opportunities in Vietnam

Last week, a group of more than 70 enterprises from the Netherlands gathered at the Vietnam-Netherlands Business Forum to work with Vietnamese partners on the possibility of co-operating in a number of sectors of their expertise, including aviation. The gathering took place in the framework of Dutch Prime Minister Mark Rutte’s Hanoi visit on April 9.

“I see a lot of opportunities for Dutch firms in the aviation sector, including airport development and infrastructure projects. Our company is seeking to work with VATM and ACV in increasing airspace capacity and air traffic control, while planning to seek for Vietnamese partners to join aviation projects under the public-private partnership model in the near future, with the Tan Son Nhat and Long Thanh international airport projects among many on our radar,” MovingDot, a leading Dutch consultancy firm, told VIR.

Together with MovingDot, its partners in the Dutch Aviation Cluster, including NACO, Van der Lande, Districon, and AviaVox are among the most interested.

Not only the Tan Son Nhat and Long Thanh international airport projects, but also many others are offering numerous business and investment opportunities for Dutch firms. For example, the newly-inaugurated Van Don International Airport located in the northern province of Quang Ninh, which is the first private-invested airport, needs more infrastructure and services.

“We have developed all the core infrastructure of the airport, while other infrastructure elements are not in place yet, including hangars, airport maintenance, catering, and others. We are willing to welcome private investors, including foreign ones to join,” said Pham Ngoc Sau, CEO of Van Don International Airport.

Thus far, Vietnam and the Netherlands have been co-operating well in the aviation sector and now more opportunities are expected to come as the prime ministers of the two countries last week agreed in their joint statement to strengthen partnership in logistics and airports, as well as aviation in the coming time.

With its double-digit annual growth in passenger number and cargo, the aviation sector now has the highest-ever demand for infrastructure development to ensure its stronger future growth. Thus, Vietnam is now opening its door wider to private domestic enterprises and foreign investors.

In the latest move, Vietnam began working on the amendments of Decree No.92/2016/ND-CP, which governs the conditions for investment and business in the aviation industry. Yjr amended decree is expected to help loosen some restrictions in the sector, thus further liberalising the investment regime.

According to the draft amendment, the foreign ownership limit in an aviation enterprise will be raised to 49 from the previous 30 per cent of the share capital. The largest shareholder will be required to be a Vietnamese company or individual.

The new Vietnamese-to-foreign shareholder ownership ratio contemplated in the draft is generally in accordance with other Southeast Asian countries. For example, foreign ownership in Thai airlines is limited to 49 per cent. In both Indonesia and Malaysia, local investors must own more than 50 per cent. In the Philippines, foreign investors are limited to less than 40 per cent of ownership.

Looking forward, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement will likely have a positive effect on the Vietnamese aviation sector. In the past several months, various European countries such as Spain and the Czech Republic have announced expanding co-operation with Vietnam to increase air travel. The various member countries acceding to the CPTPP have made heftier commitments to each other on air transport-related services than with previous FTAs. This can include activities such as flight training, design and operation of airports, and ground-handling services in various countries.

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