1. Introduction to Vietnam Law on Tourism Services and Hotel Services
It is our understanding that you are now considering possibilities of forming a foreign invested company (FIC) for providing tourism servicesand hotel services in Vietnam.
Under Vietnam WTO’s Commitments, foreign investor is entitled to provide tourism services and hotel services in Vietnam.
For tourism services, you must joint venture with a Local Partner who has been granted License for International Tourism Operation in Vietnam. Foreign Ownership in the Joint Venture Company is not limited.
We also would like to note that the Joint Venture Company is only allowed to provide In-bound Tour Services only.
Furthermore, the Joint Venture Company must credit an amount of 250 million Vietnam Dong (about 12,500USD) in a blocked Bank Account in Vietnam.
Regarding hotel services, you must own or at least have a plan to setup a hotel or resort in Vietnam.
You are required to prepare necessary documents to prove that you own a hotel/resort in Vietnam or you are licensed to setup a Hotel/Resort in Vietnam. Such documents must be included in the Application Dossier for establishment of the FIC.
We also would like to note that, tourism and hotel service is considered as conditional investment sector in Vietnam and therefore following key factors shall be taken in account:
- Parent Company must have positive business operation result in at least 02 recent years. This must be evidenced by audited Financial Statements for 02 recent years.
- Parent Company must be experienced in the field at least 03 years.
- Head office address of the FIC in Vietnam must be compliant with master plan of Vietnam.
2. formation of Wholly Foreign Invested Company
The establishment of the FIC requires an Investment Certificate from the licensing authority.
Depending upon the location of FIC, the licensing authority may be the Provincial People’s Committee (for companies located outside industrial or export processing zones) or the provincial Industrial and Export Processing Zones Management Authority (for companies located in industrial or export processing zones).
We would like to clarify that the procedure for establishment of a foreign invested company in Vietnam generally takes a rather long time in comparison with other countries in the region.
Our practical experiences show that although the total time for establishment of a foreign invested company as stipulated under Vietnam Investment Law 2005 is only 45 days, the actual process may take a longer time due to that the competent authority must consult other relevant offices to evaluate the investment project.
Under Vietnam Law on Investment, for incorporating a foreign invested company (Hereinafter referred to as “FIC”), you are required to propose an Investment Project initially to obtain Investment certificate. The relevant licensing authorities shall evaluate the legitimacy and the feasibility of such Investment Project to determine on granting of the Investment Certificate on the following basis:
a. The legal framework including Vietnam’s WTO Commitments, Vietnam Investment Law, Vietnam Enterprise Law, Regulations applicable to specific industries as well as the master economic development plan of the city or province that the FIC shall register its head-office.
b. Your financial ability, investment capital to put in the Investment Project, facilities and human resources serving the implementation of such investment project in Vietnam.
c. Head office of the FIC should be in line with master plan of the City.
The roadmap for the incorporation of the FIC for trading activities can be described in following steps as follows:
- Preparing the application dossier: We shall collect necessary information and documents from you. Upon receipt of necessary information and documents from you, we shall translate documents from English into Vietnamese and prepare the application dossier under the standard forms. The initial drafted application dossier shall be sent to you for your comments. Then, after updating the application dossier based on your comments, we shall obtain the preliminary comments from the competent authority and send the finalized application dossiers for you to sign and seal. We anticipate that this phase shall be completed within 07 working days.
- Submission of application dossier:Within 02 working days from receipt of duly signed and sealed application dossier, we shall submit the application dossier to the competent authority. It shall take about 4 months from submission of application dossier to the competent authority for the provincial licensing authority to grant the Investment Certificate. In some case the process can be longer as it takes time to consult relevant Ministries such as Ministry of Industry and Trade, Ministry of Planning and Investment, Ministry of Finance and Ministry of Culture, Sport and Tourism.
- Post licensing:Within 13 working days we shall complete the post licensing procedures such as publishing the FICin News Paper, obtaining seal and tax code registration.