With a growing number of foreign travelers flocking to this beautiful country every year, Vietnam’s tourism industry has witnessed an unprecedented boom. With the number of visitors crossing the 18 million mark in 2019, the government’s proactive efforts to boost tourism are expected to further bolster the travel sector.
The tourism industry presents a wide scope for investors who are planning to run travel enterprises in Vietnam, ranging from tour operators and travel agencies to accommodations, dining outlets, transportation companies, and more.
During the COVID-19 pandemic, global travel restrictions significantly hindered tourism, which was one of Vietnam’s main service industries. As the pandemic’s effects waned, restrictions began to be relaxed, and people started travelling. For the first eight months of the year 2022, the number of international visitors to Vietnam reached over 1.4 million, a 1,272% jump over the previous year. Among them, air travel was the most popular mode of transport with 1.27 million passengers. Travel records based on visitors’ origins are detailed below:
|Origin||No. of travellers|
These statistics reaffirm how the country is recovering quickly from the aftermath of COVID.
As per the projections made by Statista, revenues in the Travel & Tourism market are projected to reach USD 2.47 billion by the end of 2022. Moreover, revenue is forecasted to show a compound annual growth rate of 13.38% in the next five years. By 2026, this will enable the tourism sector to clock a market volume worth USD 4,081 million. As indicated by the statistics, the prospects of the tourism business in Vietnam are highly promising.
Setting up A Travel Business in Vietnam as a Foreign Investor
As you can see, great opportunities in tourism sectors are widely available for foreign investors to grab, especially if you decided to set up a travel or tour agency in Vietnam.
Your travel business can provide many options to tourists such as adventure tours, luxurious vacations, water sports, historical and cultural tours.
Tour Operator vs Travel Agency
In Vietnam, the 2017 Law on Tourism differentiates between two distinct types of tourism business.
Generally, tour operators are allowed to offer more services (e.g. creating itineraries and guiding tours) and are subject to more demanding regulations for the benefit of tourists.
Travel agencies, on the other hand, cannot participate in the creation or coordination of tours. They can only act as an intermediary between the consumers and the tour operators. Only agency agreements with tour operators are needed to start a travel agency.
Conditions for Foreign Travel Businesses in Vietnam
As per Article 30 of the Law on Tourism, foreign-invested companies are only permitted to offer inbound tour services (bring visitors to Vietnam).
In addition, international tour providers are allowed to operate through joint ventures with local shareholders without any restrictions on investment capital. Meanwhile, travel agency companies are exempted from this requirement, which means 100% FDI ownership is available.
Whenever foreign companies invest in tourism, tour guides must be Vietnamese. Companies that provide services to foreign countries are allowed to carry out inbound tourism and operations.
Requirements for a Tour Operator in Vietnam
Tour Operation License
Article 31 of the Law on Tourism 2017 regulates requirements for tour operators directly providing travel services to consumers.
- The business is established in accordance with the Law on Enterprises;
- The business has paid a required deposit to the bank (this deposit acts as back-up compensation for customers in case of disputes, more on this below);
- The individual responsible for tour operations must have a diploma degree or higher in tourism management or a certification in international travel management if his major is another (which must be acknowledged by the relevant authorities).
The Ministry of Culture, Sports, and Tourism shall specify details for travel services, professional courses, conducting exams, and granting degrees for overseas and local travel provisions.
Deposit for Tour Operation Service
Besides the mentioned paperwork requirements, tour operators in Vietnam must also make a travel service deposit to an authorized bank. This deposit shows that the operator is fully capable of taking responsibility should there be any disputes from the customers.
- Joint venture tour operators providing inbound tourism services: VND 250 million (equivalent to USD 10,500)
As part of the subsidy plan for post-Covid development, for 2022 and 2023, according to Decree 94/2021/ND-CP, the deposit will be reduced by 80%, therefore inbound international tour operators will only have to make VND 50 million deposit for international inbound tourism. The incentive is only valid until 31 December 2023.
- International Travel Business License application form
- Enterprise Registration Certificate (ERC)
- Business plan
- Evidence of your international travel business experience
- Tour schedule
- Proof of bank deposit
- Certified copies of international tour guide cards
- Proof of office domicile
Application Procedure for Business License
Foreigners have to submit all required documents to the local Department of Culture, Sports and Tourism where your business is operated or headquartered.
- Submit the written request and the appraisal records within ten working days of receiving the application.
- VNAT will review the application and issue the international travel business license in 10 days if the application is approved.
- If your application is rejected, VNAT will also provide you with the reasons.
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