As one of Southeast Asia’s fastest-growing tourist destinations, Vietnam currently opens many attractive opportunities for foreign investors. The strong growth of the tourism industry brings significant economic benefits and promotes cultural exchange and international integration. However, foreign investors must clearly understand and comply with current legal regulations to conduct tourism services in Vietnam.

This article aims to provide an update on the latest legal regulations governing tourism (travel) business activities in Vietnam. We believe that the detailed information presented below will assist investors in acquiring the necessary knowledge to ensure smooth and efficient business operations, thereby laying a solid foundation for sustainable development in Vietnam’s tourism sector.

1. Tourism business sectors and market access conditions

Before establishing business operations in Vietnam under newly established entities or acquiring capital in existing Vietnamese enterprises, foreign investors should carefully consider the tourism-related sectors they are permitted to register and operate.

Currently, tourism service enterprises in Vietnam often register the following business sectors, such as Travel agency; Tour operator; Reservation services, and related support services for tourism promotion and organization; Other related services. The WTO Schedule of Specific Commitments on Services has recognized Vietnam’s commitments regarding the tourism sector. Accordingly, Vietnam does not restrict the participation of foreign investors, except for:

• Foreign service providers are permitted to provide services in the form of joint ventures with Vietnamese partners without any restrictions on foreign capital contribution.
• Tour guides working in foreign-invested enterprises must be Vietnamese citizens.
• Foreign-invested service providers are only permitted to provide inbound tourism and domestic tourism services to tourists entering Vietnam as part of inbound tourism services.

In accordance with the specialized tourism regulations of Vietnam, foreign enterprises must complete the procedure for applying for an International Travel Business License to engage in tourism activities in practice. This procedure is not complicated if the enterprise fully meets the prescribed conditions.

2. Forms of presence for Foreign investors in Vietnam

To commence tourism service business activities in Vietnam, foreign investors must first establish a commercial presence in Vietnam. Foreign investors can choose one of the following forms:

• Establish first a Vietnamese company providing tourism services, this company will be established by a partner who is a Vietnamese individual. After that, foreign investors buy shares or capital contributions of this company registered to do tourism services with an unlimited acquisition rate. Accordingly, foreign investors will own up to 99% of the company’s charter capital. With this capital ratio, foreign investors will have the right to make all decisions related to the company’s business operations in Vietnam.
• Foreign investor acquires capital, or shares of a tourism company registered in Vietnam. The ratio of transferred capital is not limited, except not allowed to own 100% of the capital.
• Foreign investors may collaborate in a joint venture with a Vietnamese partner (who is already registered in the tourism industry). Foreign investors may contribute capital to the joint venture at an unrestricted rate.

Foreign investors should carefully consider their specific needs and information about their Vietnamese partners when selecting the most appropriate form of presence in Vietnam.

3. Tourism activities that foreign enterprises are allowed to carry out

Foreign-invested tourism enterprises are permitted to engage in the following activities in the tourism sector:

• Domestic tourism services for domestic tourists;
• International tourism services shall only be provided to foreign tourists entering Vietnam, except in cases where international treaties to which the Socialist Republic of Vietnam is a member have other provisions;
• International travel service enterprises are authorized to provide both international and domestic travel services.

4. Legal conditions for Businesses to operate international travel services

To carry out activities of bringing foreign tourists to Vietnam, a foreign-invested enterprise will need to follow the procedures to apply for an International Travel Service Business License. The enterprise must meet the following criteria:

• Enterprises make deposits for international travel services at banks;
• The person in charge of the travel service business must have graduated from college or higher with a major in travel; If this person graduated from college or higher in another major, they must have a professional certificate in international tourism operations.

After determining that the enterprise meets the above conditions, the enterprise prepares a set of application documents for an International Travel Service Business License, including:

• Application form for an International Travel Service Business License in the format prescribed by the Minister of Culture, Sports and Tourism;

• Certified copy of the Certificate of Enterprise Registration Certificate or Investment Registration Certificate issued by a competent state agency.;
• Certificate of Deposit for International Travel Service Business;
• Certified copies of diplomas and certificates of the person responsible for international travel service business;
• Certified copies of the appointment decision or labor contract between the international travel service business enterprise and the person responsible for the international travel service business.

The Procedures, and Authorities for granting International Travel Service Business Licenses are as follows:

• The enterprise applies for an International Travel Service Business License by submitting one set of dossier to the Vietnam National Administration of Tourism (VNAT);
• Within 10 days from the date of receiving a valid dossier, the VNAT shall appraise and grant an International Travel Service Business License to the enterprise and notify the tourism authority of the province where the enterprise is headquartered; in case of refusal, it must be notified in writing and state the reasons.

Regarding deposit requirements, please note that starting from January 1, 2024, the deposit levels for domestic travel services will be: 100,000,000 (one hundred million) VND. The deposit level for international travel services will be divided into the following cases:

• Business of international inbound tourism services: 250,000,000 (two hundred fifty million) Vietnamese dong;
• Business of international outbound tourism services: 500,000,000 (five hundred million) Vietnamese dong;
• Business of both international inbound and outbound tourism services: 500,000,000 (five hundred million) Vietnamese dong.

5. Conditions for foreign employees working in Vietnamese enterprises

Foreign personnel working in Vietnam must comply with specific work permit regulations, which vary depending on their employment status. Whether an individual is exempt from obtaining a work permit or required to apply for one depends on their classification under Vietnamese law, specifically:

• Enterprise managers include: Chairman of the Board of Members, members of the Board of Members, Company President, Director or General Director, and individuals holding other management positions as prescribed in the Company Charter.
• An expert is a foreign individual who falls into one of the following categories: (i) Holds a bachelor’s degree or higher and has at least 3 years of relevant work experience in the position that the foreign employee intends to fill in Vietnam; (ii) Has at least 5 years of experience and holds a professional certificate relevant to the position that the foreign employee intends to fill in Vietnam.

In addition to the above requirements, foreign experts are required to provide the following supporting documents to verify their expertise: Diplomas, certificates, or licenses; Written confirmation from an agency, organization, or enterprise abroad regarding the number of years of experience or work permit that has been issued or confirmation that a work permit is not required.

• Human resources are technical workers, accordingly when a foreigner comes to work in Vietnam in one of the following cases, it is understood to be working in Vietnam as a technical worker: (i) At least 01 year of training and at least 03 years of relevant experience in the position that the foreign worker intends to hold in Vietnam; (ii) Have at least 5 years of experience working in a job suitable to the job position that the foreign worker plans to work in Vietnam.

The Vietnamese government always aims to create a favorable and transparent investment environment. Policy changes not only help attract investment but also promote stronger development of the tourism industry. For investors, understanding and complying with new regulations will open up many opportunities for cooperation and sustainable development in this potential tourism market.

Time of writing: 16/07/2024

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

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