- Hotel Ownership Regulations for Foreigners
- Due Diligence: A prerequisite to buying a hotel in Vietnam
- Other regulations you must be aware of before buying a hotel in Vietnam
- Minimum Capital Requirements
- Best Place to Buy Hotels in Vietnam
- Future Outlook on the Tourism Industry in Vietnam
- How Can Cekindo Help?
The global economy that lay in shambles has now entered a reconciliation period as we learn to live with the Coronavirus. Vietnam, likewise, has been deeply impacted by Covid-19, and its hospitality industry was no exception. The country had a great reputation for its tourism and hospitality industry pre-covid. The number of domestic and international tourists had reached 80 million and 15.5 million in 2018, respectively. As a result, the hotel business in Vietnam increased largely in terms of both occupancy and income per room (1).
Investing in Vietnam? See Cekindo’s Company Registration Services in Vietnam
However, as a result of government restrictions including a closure of the border, hotel owners in famous tourist spots like Nha Trang have started putting up their properties for sale owing to the official large-scale restrictions that disrupted the hospitality industry in Vietnam. As a large number of hotels have begun to be put up for sale, the prices have subsequently gone down. Under such circumstances, buying a hotel in Vietnam at this low price as a foreigner can prove to be very lucrative for when normalcy is entirely restored.
Hotel Ownership Regulations for Foreigners
According to the Vietnamese legislation, foreigners can 100% own hotels, however, they must get a tourist operating license if they want to provide tourism-related services. Foreigners can buy a license to operate a hotel for up to 50 years with the option to extend the contract. It’s also possible for a foreign investor to purchase an existing operating license from a previous hotel owner.
One can apply for the operation license acquisition from abroad, provided they have a local consultant or agent like Cekindo as their proxy in Vietnam.
In case a foreigner wants to acquire an existing operation certificate, all the necessary changes according to the acquirer will be required to transfer the ownership.
Due Diligence: A prerequisite to buying a hotel in Vietnam
Due Diligence offers a thorough analysis on not just the individual owner, but also any associated parties with whom the company does business, as well as any potential dangers or difficulties that have occurred in the past & therefore may arise in the future.
After gathering all of the information, one may determine whether or not the prospective hotel or vendor is eligible to be considered trustworthy. While conducting due diligence, one must be vigilant of any impending debt, or tax evasion, while also confirming that all the paperwork is in order.
Other regulations you must be aware of before buying a hotel in Vietnam
Residential areas must satisfy the following fire safety criteria, according to the revised Fire Prevention and Fighting Law:
- Obtain approval from appropriate authorities for the firefighting plans.
- To fulfill on-the-spot fire control demands, establish self-defense forces obtaining firefighting and preventive training, as well as other groups preparing to undertake firefighting responsibilities.
- Electricity systems must adhere to strict fire safety regulations.
- Have firefighting and prevention plans drawn up, and have them reviewed in newly constructed residential zones.
The prospective hotel should be well examined for its ratings (star ratings) and must be registered with the Ministry of Tourism before proceeding with the transaction.
Minimum Capital Requirements
While buying a hotel in Vietnam as a foreigner under 100% sole proprietorship, one is exempt from any minimum capital requirements.
Best Place to Buy Hotels in Vietnam
Hotel owners in vacation hubs like Nha Trang and Da Nang are putting their properties up for sale on realty sites after being hit severely by consecutive waves of Covid-19. Many hotels that struggled to withstand the second and third Covid-19 waves, only to be weakened further by the fourth wave, are now for sale. They range in price from USD 879k to USD 13 million, the majority being in the USD 1.3 million – USD 3 million range. There are now more hotel sellers than purchasers post-covid (2).
Future Outlook on the Tourism Industry in Vietnam
With the advent of the mass inoculation drive taken on by the Vietnamese government, they plan on opening up the country fully to tourists by the summer of 2022. With a slow rollout of the reopening starting in October 2021, by June 2022 the country plans on being fully open to all vaccinated tourists with no quarantine restrictions for fully vaccinated tourists (3). With this in mind, you can expect a travel boom to Vietnam by the end of the year 2022.
How Can Cekindo Help?
Buying a hotel and incorporating a hospitality company in Vietnam is indeed a lucrative opportunity for foreign investors, however, is not easy. Having a company registration professional like Cekindo can help you have a seamless incorporation experience. Moreover, as due diligence makes up for an important part of buying a hotel in Vietnam, Cekindo provides A-Z top-notch due diligence and background check services. To further assist you in making your experience comprehensive, Cekindo handles your transfer of certificate, prepares all the necessary documents for share purchase agreements, and helps you open a local bank account. For a complete and transparent service for you to buy a hotel in Vietnam with no headaches, fill out the form below.