1. Main Legal Framework Governing the Aviation Sector in 2026

1.1. The Enactment of Law 130/2025/QH15

The civil aviation legal system in Vietnam is entering a historic transition phase in 2026, marking a comprehensive shift in management orientation and international integration. For nearly two decades prior, all aviation activities in Vietnam were primarily governed by the 2006 Vietnam Civil Aviation Law and its 2014 amendments. To thoroughly resolve practical shortcomings and meet the rapid development of the transport market, the National Assembly officially passed Law 130/2025/QH15 on December 10, 2025. This core legislation officially takes effect on July 1, 2026, serving as the highest legal basis shaping the entire value chain of the Vietnamese aviation industry in the new era.

Law 130/2025/QH15 is highly detailed, comprising 11 chapters and 107 articles, regulating a very broad scope of activities. The systematically regulated contents include air traffic management, aircraft registration and operation regulations, commercial air transport, general aviation, as well as new issues like the application of sustainable aviation fuels and the management of low-altitude air transport.

1.2. Transitional Mechanism and System of Guiding Documents

For enterprises currently operating in the market, the legal transitional mechanism is stipulated in Article 107 of Law 130/2025/QH15 to ensure the continuity of business operations. Any air transport business licenses, aircraft operator certificates, or airport operation licenses granted before the new law takes effect will maintain their full legal validity until they are revoked or replaced by state management agencies according to new procedures.

Alongside the original law, the current legal framework is materialized and implemented into management practice by a system of detailed guiding decrees. A typical example is Decree 92/2016/ND-CP regulating conditional business lines in the aviation sector. This document has been continuously amended and supplemented through various stages by Decree 89/2019/ND-CP, Decree 15/2024/ND-CP, and most recently Decree 14/2026/ND-CP issued on January 13, 2026. Decree 14/2026/ND-CP focuses on cutting and simplifying administrative procedures, thereby creating a transparent investment environment and minimizing compliance costs for investors.

2. Authority and Structure of State Management Agencies

2.1. Defining the State Management Responsibilities of the Ministry of Transport

Within the national administrative governance system, the Government uniformly manages civil aviation. The Ministry of Transport is the agency directly responsible to the Government for executing state management functions in this field. Entrusting this authority to the Ministry of Transport ensures consistency in the national transport network planning, seamlessly connecting air transport with road, rail, and inland waterway transport modes.

2.2. The Specialized Power Enforcement Role of the Civil Aviation Authority of Vietnam

The Civil Aviation Authority of Vietnam (CAAV) under the Ministry of Transport acts as the highest specialized state power enforcement agency for the entire aviation industry ecosystem. This agency performs comprehensive management functions including formulating long-term development policies, organizing the licensing of air transport businesses, monitoring technical safety standards, managing the allocation of national airspace, and conducting aircraft nationality registration procedures.

For international enterprises operating or strategically planning to invest in Vietnam, the CAAV serves as the sole legal contact point for most critical administrative procedures, from appraising and approving cross-border aircraft lease agreements to issuing authorization codes for registering international interests in aviation assets under international treaties. Concentrating power into a single management focal point helps standardize administrative processes and improves the efficiency of the state apparatus.

3. Market Entry Barriers Regarding Financial Capacity

3.1. Minimum Capital Requirements for Domestic Route Operations

The air transport market in Vietnam is strictly controlled by state management agencies through stringent market entry barriers to ensure economic security and maintain maximum operational safety. The foundational requirement for any economic organization wishing to enter the air transport business is to prove strong financial resources through a minimum capital level. According to Decree 92/2016/ND-CP and its amending documents, the minimum capital is systematically stratified based on the intended fleet size and the scope of the planned route network.

For enterprises registering to operate only domestic routes within Vietnam’s territory, the mandatory minimum capital must reach 300 billion VND if the airline plans to operate a fleet of up to 10 aircraft. When an enterprise expands its fleet to between 11 and 30 aircraft, the mandatory minimum capital is raised to 600 billion VND. This statutory capital threshold hits 700 billion VND if the enterprise registers to operate more than 30 aircraft.

3.2. Statutory Capital Requirements for International Routes and Niche Services

If an enterprise establishes a strategy to operate an international route network, the requirements for maintaining charter capital become significantly stricter. An airline operating international routes with a fleet of fewer than 10 aircraft must maintain a minimum capital of 700 billion VND. This financial barrier increases to 1,000 billion VND for fleets of 11 to 30 aircraft. Particularly for airlines operating more than 30 aircraft on international routes, the law requires a massive capital of 1,300 billion VND.

For auxiliary business models, the law also establishes separate financial thresholds. The minimum capital to establish a commercial general aviation service enterprise is set at 100 billion VND. Meanwhile, enterprises specializing in passenger terminal operations or aviation fuel supply services only need to meet a minimum capital of 30 billion VND.

4. Ownership Structure and Business Licensing Procedures

4.1. Foreign Investor Ownership Limits and Control Principles

The policy of attracting foreign direct investment into the Vietnamese aviation industry is carefully designed based on the principle of balancing the mobilization of international capital and the protection of national economic security. Current law stipulates that foreign investors are not allowed to own more than 30 percent of the total charter capital of an air transport business enterprise in Vietnam.

To ensure that the strategic decision-making power and actual control over the airline’s operations always belong to Vietnamese citizens, the enterprise’s shareholder structure must satisfy the condition of having at least one Vietnamese individual or Vietnamese legal entity holding the largest proportion of charter capital.

The law also applies a strict legal risk control mechanism for cases where the largest shareholder is a Vietnamese legal entity that receives foreign investment capital. In this situation, the capital contribution of foreign parties within that Vietnamese legal entity must not exceed the limit of 49 percent of the intermediary legal entity’s own charter capital.

4.2. Transaction Restriction Timeframe for Founding Shareholders

To prevent speculative takeovers or the transfer of licenses contrary to the initial investment purpose, the law dictates a strict transaction restriction timeframe. The transfer of shares or capital contributions to foreign investors for initially pure domestic aviation enterprises is only permitted after a minimum period of 2 years has elapsed, calculated from the date the enterprise is officially granted a business license.

4.3. The Five-Step Administrative Process for Approving Business Licenses

The process of granting an Air Transport Business License in Vietnam is a highly complex administrative procedure that requires approval at the highest level of the Government. The completion of this legal procedure is governed by Decree 89/2019/ND-CP and the administrative reform regulations in Decree 14/2026/ND-CP. This entire process consists of 5 basic steps.

The first step requires the enterprise to prepare and submit a complete licensing application dossier to the CAAV. This dossier must contain a detailed business operation plan, authentic evidence of financial capacity, the organizational structure of key personnel, and documents confirming the legal status of the founding shareholders. Within 3 working days from the time of receipt, if the dossier shows signs of deficiencies or invalidity, the CAAV is obligated to issue detailed written instructions for the enterprise to supplement it.

The second step is executed when the dossier meets the validity requirements. The CAAV will allocate a timeframe of 20 days to conduct a comprehensive appraisal of the project regarding technical safety, aviation security, and commercial feasibility. Following this appraisal, the CAAV prepares an evaluation report to submit to the Ministry of Transport.

The third step stipulates that the Ministry of Transport has 15 days to review the entire appraisal report submitted by the CAAV. If they agree with the specialized appraisal results, the Ministry of Transport will officially submit the entire project dossier to the Prime Minister.

The fourth step is the phase where the Prime Minister dedicates 10 working days from the date of receiving the submission to review the project based on macro aspects of national economic development strategy and national airport network planning, and officially makes a decision to allow the issuance of the business license.

The fifth step takes place immediately after receiving the official approval document from the Prime Minister. The Ministry of Transport will perform the final administrative procedure of signing, promulgating, and issuing the Air Transport Business License to the enterprise within 5 working days.

5. Operating Regulations for International Airlines and Preferential Policies

5.1. Operational Limits and Domestic Cabotage Ban

Vietnam’s air transport market operates on a platform that harmoniously combines international integration with protectionist policies for the domestic market. International airlines wishing to operate commercial routes connecting to Vietnam must strictly comply with the principle of reciprocity in economic diplomacy. The airline must be designated by its home country to perform the flight and then must be appraised and granted commercial traffic rights by the CAAV based on bilateral or multilateral air transport agreements signed by the Vietnamese Government.

Despite the open international market, the Vietnamese legal system establishes a strict restriction on transportation activities within the territory, known as domestic cabotage rights. Any foreign-registered airline is absolutely prohibited from transporting passengers, baggage, or commercial cargo with both the departure and arrival points located entirely within Vietnam’s national airspace.

Granting an exceptional permit to allow a foreign airline to perform domestic transport activities is a special procedure only directly reviewed and approved by the Prime Minister or the Minister of Transport in force majeure situations. These exceptional situations include national disasters, urgent humanitarian relief campaigns, or when there are pressing demands for economic security interests that the actual transport capacity of domestic airlines cannot meet in time.

5.2. Administrative Fee Reduction Policies under Circular 40/2026/TT-BTC

To assist the air transport industry in overcoming the consequences of global fuel price fluctuations, the Ministry of Finance designed and promulgated various policies to exempt or reduce key taxes and fees in 2026. A prime example is Circular 40/2026/TT-BTC, effective from April 7, 2026, which waives all fees and charges related to administrative management in the transport sector.

This policy is applied for a limited time until the end of June 30, 2026. The list of exempted fees includes aircraft nationality registration certificates, aircraft sale and purchase dossier appraisals, and all fees for organizing professional licensing exams for flight crew members and ground service personnel. Cutting these fees helps airlines save on administrative costs and maintain ticket prices at a reasonable level for consumers. Service fees that directly constitute the flight ticket price paid by passengers, such as security screening fees or passenger terminal service fees, continue to be collected normally by the airport system according to regulations.

6. Conclusion

The new legal framework for the Vietnamese aviation market in 2026 represents a harmonious combination of deep international integration goals and the protection of national economic security. By establishing strict standards on financial capacity and foreign ownership limits, while simultaneously deploying a series of preferential tax and fee policies, the Government not only creates a transparent competitive environment but also provides a solid launchpad for domestic aviation enterprises to achieve sustainable growth in the new era.

This article is for informational purposes only and does not replace professional legal advice. For support tailored to your situation, please contact HMLF lawyers.

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