7 notable points in restaurant business for foreign investors in Vietnam

Vietnam is one of the most attractive culinary destinations in Asia. With its diverse and rich cuisine, Vietnam is a promising market for foreign investors to develop their restaurant brands. What form of business investment should foreign investors pursue when doing business in restaurants in Vietnam? What kinds of licenses should they apply for to be eligible for business, and what legal issues should they keep in mind during business operations?  Let’s explore the crucial steps and necessary procedures for investing a restaurant in Vietnam for foreign investors.

Through this article, we delve into the 7 crucial points to consider when investing in the restaurant industry in Vietnam, along with detailed information about the steps of opening a restaurant and necessary legal procedures.

1. Restaurant business operation conditions

Previously, according to the content of Vietnam’s commitments in WTO, within 8 years from the date of accession, the restaurant service business should be carried out in parallel with the investment in construction, upgrading and improvement or acquiring hotels. This has a certain limitation on the investment of foreign individuals and organizations looking to invest in Vietnam’s restaurant industry. However, at the present, the above restriction has ended, and foreign investors are free to choose the model and way of operating restaurant services.

2. Premise rental

Finding a satisfactory location is crucial for business success. However, unexpected rent increases can significantly impact the profit. Consequently, it can even lead to financial loss. Investors can minimize this risk by drafting a comprehensive lease agreement. The contract should clearly outline the issues on the rental, term, price increase mechanism, cases of change of premises owner, unilateral termination of the contract, etc. This is often the case, especially in areas with frequent changes in planning such as Ho Chi Minh City and Hanoi. To ensure a tightly drafted lease agreement, investors should seek legal advice from professional organizations.

3. Restaurant name and business model

The restaurant’s name and business model are valuable assets throughout the operation of the restaurant. Therefore, it is necessary to register for the protection of intellectual property right from the beginning. In addition, the procedure to register for protection of restaurant names and models need to be done in early. As this procedure often takes up to a year or more in Vietnam.

4. Food safety and hygiene compliance

Mistakes in food hygiene issues can damage a restaurant’s reputation. Therefore, the investor must have all the permits of the competent authority on food safety and hygiene, such as: a Certificate of knowledge on food safety for the owner of the restaurant business; Certificate of eligibility for food safety and hygiene. In addition, investors must use food sources of clear origin, provided by reputable and fully licensed organizations and individuals according to regulations.

5. Fire protection measures

Fire prevention is a problem that investors often make mistakes with due to improper implementation of regulations. Therefore, to ensure fire safety in accordance with regulations, it requires to have a firefighting plan, firefighting equipment in place, fire water supply pipe, an automatic fire fighting system or automatic smoke alarm. Moreover, the managers must be trained in firefighting. The electrical system should be able to handle peak load. Furthermore, the kitchen must have good ventilation. Additionally, the restaurant should use only standard gas cylinders from reputable suppliers.

6. Service prices in Vietnamese Dong

In addition to the restaurant business license, foreign investors who would like to do business in alcohol products need to apply for a License to retail alcohol products as prescribed by law.

Vietnam is an attractive market for restaurant investment. However, navigating the local market requires a deep understanding of legal frameworks, cultural nuances, and operational challenges. Check out our Doing Business articles. PLF will provide you with detailed information on the steps involved in opening a restaurant, along with in-depth knowledge of the legal framework, culture, and business challenges in Vietnam.

Contact PLF Law Firm today via email at inquiry@plf.vn or +84913 902 906 or Zalo | Viber | WhatsApp to receive a free 30-Initial Minute Consultation.