With an increasingly deep international integration on the rise, investing in a country’s tourism sector is not only an opportunity but also a challenge for foreign investors. Establishing a travel company sometimes becomes a journey full of complex conditions and factors, posing great challenges that those interested in this field must face. For foreign investors, establishing a travel company will be more complicated than for domestic investors as you must understand the specific regulations that Vietnamese law sets out for businesses with foreign investment capital when operating in the tourism industry in Vietnam.

This article will provide you with information about the conditions that you, as a foreign investor, need to meet when doing domestic or international tourism business.

1. Market access conditions

The first condition that investors need to pay attention to is that Vietnam’s commitments are recorded in the WTO commitment schedule for the tourism industry. In other words, regulations on marketing restrictions for tourism business activities in Vietnam can be seen in the table below that displays specific content:

2. Investment forms of foreign individuals/organizations

Foreign investors are not allowed to own 100% capital in a travel company. Therefore, to establish a tourism service company in Vietnam, foreign investors are required to operate according to one of the following models:

• A pre-established Vietnamese company providing tourism services. Then the foreign investor can buy shares or capital contribution of a Vietnamese company that has registered to do tourism service business, the acquisition ratio will not be 100% of the capital contribution or capital contribution of the Vietnamese company.
• Conduct joint venture cooperation with Vietnamese partners (registered in the tourism industry). Foreign investors are to contribute capital to the joint venture at any rate less than 100%.

3. Conditions of international travel services

International travel service businesses serve international tourists coming to Vietnam and tourists going abroad. This is also what investors want to achieve when conducting tourism business in Vietnam. To carry out this activity, in addition to establishing a company with the function of providing tourism services, that company must also meet the conditions to apply for a Certificate of International Travel Services.

Conditions of international travel services include:

• The enterprise is established as prescribed by the Law on Enterprises;
• The enterprise has paid a deposit to a bank;
• The person in charge of the provision of travel services holds a college degree or higher in travel; in case he/she holds a college degree or higher in another major, a certificate of training in international tour operation is required.

After determining that the enterprise meets the above conditions, the enterprise prepares a set of application documents for a License for the Provision of International Tours, including:

• An application form for issuance of the license for the provision of international tours according to the specimen prescribed by the Minister of Culture, Sports, and Tourism;
• A certified true copy of the business registration certificate or investment registration certificate issued by a competent authority;
• A certificate of deposit payment;
• Certified true copy of qualifications of the person in charge of the provision of travel services;
• A certified true copy of the decision on appointment or employment contract between the travel service provider and the person in charge of the provision of travel services.

The procedures, and authority for issuance of the License for Provision of International Tours are prescribed as follows:

• The enterprise applying for the license for the provision of international tours shall submit 01 application to the General Department of Tourism;
• Within 10 days from the day on which a valid application is received, the General Department of Tourism shall assess and issue the license for the provision of international tours to the enterprise and inform the tourism authority of the province where the enterprise is located. In a case of refusal, a written response stating relevant reasons must be given.

While investing in a country’s tourism sector can bring many business opportunities, foreign investors also need to face many challenges and factors that are not easy. Conditions for establishing a travel company are not only a matter of legal regulations but also require acumen and flexibility in shaping business strategies based on a deep understanding of the market and local culture.

While these challenges can increase difficulty, they also present opportunities for innovation and creativity. For investors who are adventurous and willing to learn, investing in foreign tourism not only brings profits but is also the key to opening the door to diverse experiences and international relationships.

Time of writing: 31/01/2024

The article contains general information which is of reference value, in case you want to receive legal opinions on issues you need clarification on, please get in touch with our Lawyer at info@cdlaf.vn

You can refer for more information:

• Foreign investors doing business in mining and purchasing minerals in Vietnam
• When is an Arbitration Agreement Unenforceable?
• Procedures for Vietnamese Enterprises Regarding Outward Investment
• Transferring Profits to Vietnam and how to handle Violations in Outward Investment Activities