Starting a business in Vietnam, particularly in the hospitality sector, is considered one of the lucrative investments for foreigners from all over the world.
Data have shown that the tourism in Vietnam is one of the major factors that has been boosting the country’s economy since its open policy with 18 million international visitors in 2019 – a 16% increase from the previous year and a 857% increase as compared to 2000 with 2.1 million of international arrivals.
Therefore, seeing the opportunities that tourism could bring to speed up the country’s development, the Vietnamese government has implemented a long-term plan to diversity the tourism and hospitality industry in order to bring in more foreign investments.
Foreign investors have also seen the huge potential and thus a lot of them are starting a business in Vietnam especially in the tourism and hospitality sectors. Many of them are opening up hotels in Vietnam as the demand for tourist accommodation is surging tremendously.
However, for locals and foreigners who wish to set up a hotel in Vietnam, they will need to fulfill several legal requirements particularly in obtaining trade registration and other compulsory licenses before they can fully operate their hotels.
A professional company and license registration consultant is often recommended when you set up a hotel as a foreigner who is new to the Vietnamese market and legal system.
Here’s your simple guide prepared by Cekindo on how to establish a hotel in Vietnam.
Starting a Business in Vietnam in the Hotel Sector is Profitable
Tourism is an important sector in Vietnam mostly due to the profits it brings into the country.
Vietnam has not only become the one of the most favourite destinations for people from Southeast Asia, it has also attracted visitors from all over the world including people from America, and other European countries.
The Vietnamse economy has gradually transformed from its agrarian economy to more of a service economy. Services have generated more than 33% of GDP in Vietnam, especially services from catering, hotel and transportation industries. In 2016 alone, tourism contributed VND 279,287 billion to Vietnam’s GDP.
How to Establish a Hotel in Vietnam
Foreign investors starting a business in Vietnam need to choose the legal entity suitable for their hotel business.
In accordance with Vietnam Law, foreigners can set up a hotel with 100% of foreign ownership or a joint-venture company with a local partner in Vietnam. This type of joint-venture company can be done through a nominee arrangement in Vietnam.
You will need to apply for an international tourism operation license when starting a hotel business with a Vietnamese citizen. An investment certificate must be issued from the Vietnamese Investment Board as well.
As for minimum capital requirement, the law doesn’t really specify the official requirement.
However, your submitted charter capital for setting up a hotel in Vietnam must be able to cover the expenses of all your business activities. For a joint-venture hotel, US$12,500 is considered the minimum capital required.
How Cekindo can Assist
Starting a business in Vietnam involves several considerations and in-depth research. You will first need to decide on the type of legal formation for your company, as well as the operational and business licenses.
At Cekindo, we will help you understand your options and decide on the solution that’s best for your hotel business in Vietnam.
Our established team of legal professionals will provide you with services with regard to complete company registration and formation, business setup, management and administration services in all aspects of your tourism and hotel businesses.
By being aware of the dynamic developments in Vietnam, we are here to offer foreigners, especially foreign newcomers valuable advice for starting a business in Vietnam.
Let us know how we can assist you by filling in the form below.