In an effort to overcome an economic shadow of the Covid-19 pandemic, Vietnam is one of the Asian countries that is fully open to international tourists. According to the Global Tourism Development Capability Index 2021 report of the World Economic Forum (WEF), Vietnamese tourism ranked 52nd out of 117 economies, rising by 8 places since 2019. This shows that Vietnam is gradually becoming an attractive destination for international tourists, leading to the interest of foreign investors in this field. This article will provide general conditions for foreign investors to conduct business in travel services in Vietnam.
Market access conditions
According to WTO commitments, Vietnam does not limit the capital contribution of foreign service providers in joint ventures for travel agency and tour operator services (CPC 7471), , which is also reflected in the Free Trade Agreement between the European Union and Vietnam (EVFTA).
With this commitment of Vietnam, investors are required to:
- Participate in a joint venture with a Vietnamese legal entity with an unlimited capital contribution; and
- The foreign investor must be a legal entity (not an individual).
Scope of operation
Business travel service in Vietnam is divided into the following activities:
- Domestic travel services for domestic tourists.
- International travel service serving international tourists to Vietnam and tourists going abroad.
Enterprises providing international travel services are entitled to provide international and domestic travel services. However, foreign-invested enterprises are only allowed to provide international travel services to serve international tourists to Vietnam.
Accordingly, with each different type of travel service business, investors will have to meet the corresponding business conditions.
Regulations of Vietnamese Law
Travel services are regulated as a conditional business (196), according to which:
Domestic travel service requires the following conditions:
- Being an enterprise established in accordance with the Law on Enterprises (2020).
- Deposit 20,000,000 (twenty million) VND at the bank.
- The person in charge of a business in travel services must have an intermediate or higher degree in travel; In case the personnel graduated from an intermediate level or higher in another major, they must have a certificate/degree in domestic tourism operations.
International travel service requires to meet the following conditions:
- Being an enterprise established in accordance with the Law on Enterprises (2020).
- Deposit 50,000,000 (fifty million) VND at the bank.
- The person in charge of the travel service business must have a college or a higher degree in tourism; In case the personnel graduated from college or higher in another major, they must have an international tourism management certificate.
Additionally, a tour operator providing travel services for international tourists to Vietnam and tourists going abroad must pay a deposit of VND 100,000,000 (one hundred million).
Steps to set up a company
The establishment of a travel service company is usually done through the following steps:
Step 1: Apply for an investment registration certificate;
Step 2: Apply for an enterprise registration certificate;
Step 3: Apply for a license for the provision of tourism services.
Points to note
- Enterprises need to publicize their business name, and travel service business license number on signboards at headquarters, branches, transaction offices, travel contracts, advertising publications, and electronic transactions.
- Buy insurance for tourists for the travel program’s duration, unless the tourist already has insurance for the entire travel program.
- Assist tourists with entry, exit, transit and customs
- Implement periodical reporting and statistics: for the 20th of each following month (for monthly reports) and by February 20th of the following year (for annual reports).
- Foreign individuals are not allowed to be tour guides in Vietnam.
The article is based on the current law at the time noted above and may no longer be relevant at the time readers access this article due to changes in applicable law and specific cases. that the reader wants to apply. Therefore, the article is for reference only.
