Opening a Restaurant in Vietnam - Things you may not know

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Opening a new Restaurant in Vietnam – Things you may not know before

Can a foreigner open a restaurant in Vietnam?

Foreigners are free to start a business in the food and beverage industry in Vietnam. It means that a foreigner can open a restaurant, bar, or cafe in the same way that a local can.

How to open a restaurant in Vietnam?

A restaurant is a business that is owned by a company. As a result, if you want to open a restaurant, the first step is to register a company under the F & B business line. This business line can be acquired by a new or existing company.
In Vietnam, a single entity (company) can have multiple business lines. As a result, many investors have merged several businesses into a single corporation. Instead of forming multiple entities for different businesses, you can do the same thing, which will incur significant operational costs to keep them all running.

Conditions to open a restaurant in Vietnam

Before beginning the application process, you should research the food F&B industry to better prepare yourself for what it will take to open a restaurant in Vietnam. The registration process for opening a restaurant in Vietnam can be broken down into three steps, which are as follows:

Select a proper location for the restaurant
Obtain the F&B business line into the company license
Obtain proper licenses for the restaurant to get it ready for operations.

Condition 1 and 2 usually go hand in hand; to grant the F&B business line to the company’s license, the investor must show proof that the restaurant location has been secured. Inspectors will be dispatched by the authority to inspect the location, primarily to ensure that the restaurant is properly located.

Select location for a restaurant in Vietnam

From a regulatory standpoint, the restaurant’s location must meet the two conditions listed below:

Does not bring any security threat (not close to any military areas or national security forces, etc.)
If there will be alcohol selling on the premises, the restaurant must NOT be within 100m (diameter) from schools, hospitals, kindergartens, etc. (Vietnam has adopted the Law on alcohol control).

It is recommended that the investor sign an initial memorandum of understanding (MOU) with the landlord, which can be accompanied by a small deposit to reserve the location for inspection. You should not sign the leasing contract or pay any rent until the Business license has been obtained successfully.

Obtain F&B business line

After the location inspection is completed, the company will be granted the business line, which will then be printed on the company’s Investment Certificate.

Get licenses for the restaurant to make it ready for operations.

If the location inspection is approved, the company will be granted the F&B business line.
After successfully obtaining the business line, the investor can begin obtaining other additional licenses to fully operationalize the restaurant. The following are the operational licenses:

Certificate of Food Safety Condition (COFSC)
Fire Protection System Registration (if any)
Alcohol License (if any)
Environmental Protection Plan Registration

What are the costs to open a restaurant in Vietnam?

The capital to start a business in Vietnam

The capital investment required to open a restaurant in Vietnam is comparable to that required to open a consulting, IT, or trading company in Vietnam. The law does not specify the minimum capital investment required for the establishment of a restaurant. It all comes down to the investor’s estimation and budgeting plan.
However, because the capital information is printed on the business license, any changes must be made through a license amendment before the change can be implemented. This process may take up to 30-45 days to complete.

Design and Decoration cost

Visual effects are an important part of running a successful restaurant in Vietnam. People visit the restaurant to enjoy the food and drinks and the atmosphere, ambiance, and overall experience. Get a good interior designer and an agency to help you win the hearts of your customers at first sight.
Interior decor expenses can be estimated at $250-$350/sqm for a turn-key project. The budget can be negotiated, and the decoration materials can differ, causing the price to rise or fall accordingly.

Employment cost

A restaurant is a type of hospitality service. The people who work for it are a critical component of its success. Because of this, employment is one of the most important aspects of the job. Those who are unfamiliar with hiring in Vietnam may become overwhelmed by the plethora of employment information and regulations, such as the Labor Law. This also put some strain on the employment budgeting process.

When estimating an employment budget, the following guidelines should be followed: It’s all about the gross salary in Vietnam (not net). Furthermore, the employer must pay the majority of the costs for the employees’ four types of state insurance (estimated to be 23% -23.5% of total gross payroll (capped at $321/person/month).
Aside from the chef, the market salary range for other positions in restaurants can range from $150-$300/month for part-time waiters to $400-$600/month for full-time waiters. A team leader or supervisor can earn 20% more, plus a bonus or share tips. Because Vietnam does not have a strong tip culture, tips should not be the primary source of income for employees. When looking for a job in a restaurant, a fixed gross salary is still the most important factor. Start hiring employees with VNBG today.

Equipment cost

The cost of equipment and facilities varies depending on the type, origin, capacity, brand, and so on. If you look into domestic brands or traditional materials, you can find inexpensive cooking utensils and tableware. There are markets or wholesale centers with affordable prices for the equipment and tools just a few clicks away.

Owning a successful restaurant in Vietnam requires a lot of effort and planning ahead of time. Vietnam Business Gateway is here to help motivated entrepreneurs and business owners by providing insightful advice on conducting business in Vietnam. If you want to own a restaurant in Vietnam, contact our consultant today to schedule a free consultation.

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