Vietnam construction ministry proposes raising foreign ownership cap in airlines to 49%

Vietnam’s Ministry of Construction has proposed lifting the foreign ownership cap in domestic airlines from 34% to 49%, under a draft decree on air transport now open for public consultation.

Under the draft provisions on commercial air transport, foreign investors would be allowed to hold up to 49% of charter capital in a Vietnamese carrier.

The ministry said the proposed adjustment aims to create more favorable conditions for businesses to participate in the aviation sector while enhancing regulatory oversight.

The 34% ceiling has long been viewed as a constraint on attracting foreign capital, particularly as several Vietnamese carriers undergo restructuring.

In 2024, Luong Hoai Nam, former CEO of Bamboo Airways, said the cap limited foreign investors’ veto rights and reduced their ability to engage deeply in strategic and operational decisions.

Regionally, Thailand, Indonesia, and Cambodia permit foreign ownership of up to 49% in airlines, while the Philippines allows 40%. More than a decade ago, foreign partners were also permitted to hold up to 49% in Vietnamese carriers.

Several airlines, including Vietravel Airlines and Bamboo Airways, are currently restructuring and seeking additional capital from both domestic and foreign investors.

Beyond ownership limits, the draft decree also revises minimum equity requirements for establishing and maintaining regular commercial air transport operations.

Under the proposal, airlines operating up to 30 aircraft would need minimum equity of VND300 billion ($11.55 million). Carriers operating 31 aircraft or more would be required to maintain at least VND700 billion ($26.95 million) in equity.

Under current rules, VND300 billion permits operations of up to 10 aircraft. Airlines operating 11-30 aircraft must have VND600 billion ($23.1 million) in equity, while those with more than 30 aircraft are required to hold at least VND700 billion.