Open A New Tourist Agency In Vietnam

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Open A New Tourist Agency In Vietnam

Tourism Business has always been Vietnam’s top goal for economic development. In an effort to recover from the COVID pandemic as quickly as possible, the Vietnamese government has been implementing measures that foster the growth of this industry.

In the last few years, the number of international and domestic visitors to this industry has increased annually. Between 2013 and 2019, the number of international tourists increased from 7.75 million to 18 million.

Furthermore, 49 million domestic tourist arrivals mark a significant rise. There is a strong probability that Vietnam’s tourism sector will continue to flourish in the next few years. This is the potential for opening a travel/tourism agency in Vietnam. If you are interested in launching a tourist business in Vietnam, you will find useful information in this article.

What are the entry barriers for foreign investors in the tourism business in Vietnam?

Vietnam’s laws classify tourism as a conditional business. Vietnam pledged to remove all entry barriers outlined in the 2007 Schedule of Specific Commitments in Services, in accordance with its commitment to the World Trade Organization. Consequently, “Tourism Services/Agencies” (CPC – 7471) is now open for foreign investment as of January 11, 2007.

However, the door is not really wide open. To enter the market, international service providers must create a Joint Venture (JV) with a local corporate partner that is authorized to perform tourist services in Vietnam. Despite the WTO’s pledge that there should be “no constraint” on foreign capital investment, the foreign side cannot own the whole business but can reach 99.9% of the firm.

Special conditions for setup of tourism business in Vietnam

In reality, having a local corporate partner to start a joint venture is only one of two requirements (unless the investor is from a country member of CPTPP). It will aid in the formation of the corporation, but not in the operation of the company. The company must get a sub-license from the Department of Tourism in order to commence operations. In addition, the foreign-owned tourism company is allowed to provide inbound tours only (bringing international tourists into Vietnam).

In summary, to successfully open a travel agency in Vietnam, you must first establish a business entity (often as a LLC) by forming a joint venture with a local corporate partner. The IRC and BRC obtained from the Department of Planning and Investment (DPI) as a result of this procedure serve as proof of the company’s official establishment.

Secondly, after the company is successfully formed, and before launching your service, you must obtain a sub-license known as an International travel service business license from the Vietnam National Administration of Tourism.

Detailed instructions for each step can be found below:

FROM THE START – you need to establish your business in Vietnam!

At this step, you need to prepare:

A local corporate partner (skip this step if you are from CPTPP country member): As stated previously, you must acquire a local corporate partner in order to establish your firm. Your partner must have a business license allowing them to provide “tourist services.”
A Business Address: This is where the company will be situated. Some business sectors, such as training, and coaching need physical locations. However, the tourist business does not need a physical location, therefore a virtual office is conceivable.
A Legal Representative: There must be at least one legal representative for every business in Vietnam. The individual can be a Vietnamese citizen or a foreigner (including you), but they must obtain a permanent address in Vietnam in order to be considered a resident. In the event that you are unable to find a suitable candidate, you may hire a director nominee from VNBG for six months and then appoint your own or send your candidate to assume the position.
Capital Investment: The minimum amount of capital is not prescribed by law, but since you will seek a sub-license in the future, it should not be too low. A USD 30,000 investment is deemed viable.

The whole procedure will take around three to four weeks after submission.

TO FINISH – You need to apply for the International travel service business license

To obtain the license you need to prepare some requirements as below:

Requirement for Business Personnel: Tourist guides in firms with foreign investment must be Vietnamese citizens.
Requirement for the head of business: The representative of the firm or the individual directly managing the foreign-invested tourist service must possess a bachelor’s degree or higher in travel or tourism. If they do not have a degree in tourism management, they must possess a tourism management certificate.
Requirement of escrow: Having an escrow account of USD 10,500 or VND 250 million.

HOW CAN VNBG ASSIST YOU?

Over the last four years, we have seen a substantial rise in Vietnam’s economy, which has created a great deal of profit-making opportunities for businesses. During this period, we have assisted thousands of firms in entering the market and unlocking their bright potential.

Through a legal agreement, we are pleased to offer you with a local corporate partner. You will have entire authority over the firm, while our involvement will be confined to assisting you in establishing the company.

In addition, we provide EOR services to hire and manage your Vietnam-based workforce. We will assist you with personnel recruitment and business operations (paying salary, tax, managing team, etc).

Combining our knowledge and market understanding, we are delighted to be the most efficient and cost-effective provider of business solutions in Vietnam, assisting thousands of businesses in incorporating successfully.

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