Table Of Contents

The legal framework for establishing a domestic travel business in Vietnam comprises a set of laws, decrees, and circulars that govern the process and set out the requirements for operation. Understanding these regulations is crucial for ensuring compliance and avoiding potential complications during the setup process. Here's a breakdown of the key legal documents involved:

1. Enterprise Law No. 59/2020/QH14:

  • This law establishes the general framework for establishing and operating businesses in Vietnam, including provisions on company types, registration procedures, and corporate governance.
  • It outlines the basic requirements for all businesses, regardless of their specific industry, including registration formalities, capital contribution, and ongoing compliance obligations.

2. Decree 01/2021/ND-CP on business registration:

  • This decree provides detailed instructions and procedures for business registration in Vietnam.
  • It outlines the documents required for registration, the processing timelines, and the fees associated with the process.
  • This decree ensures uniformity and efficiency in the business registration process across the country.

3. Law on Tourism No. 09/2017/QH14:

  • This law specifically regulates the tourism industry in Vietnam, including the activities of travel agencies, tour operators, and other tourism service providers.
  • It defines the different types of travel businesses, their scope of operations, and the licensing requirements for each category.
  • This law plays a crucial role in ensuring the quality and safety of tourism services offered in Vietnam.

4. Decree 168/2017/ND-CP detailing a number of articles of the Law on Tourism:

  • This decree provides further details and clarifications on specific provisions of the Law on Tourism, particularly regarding licensing requirements and qualifications for personnel involved in travel services.
  • It specifies the deposit amounts required for different types of travel businesses (domestic, international, or both) and outlines the qualifications needed by the person in charge of travel services.
  • This decree helps ensure a clear and consistent interpretation of the law and facilitates its practical application.

5. Circular 06/2017/TT-BVHTTDL on guidance on the Law on Tourism:

  • This circular issued by the Ministry of Culture, Sports and Tourism provides further guidance on implementing the Law on Tourism and its related decrees.
  • It clarifies specific procedures for obtaining travel business licenses, the qualifications recognized for the person in charge of travel services, and other operational requirements.
  • This circular offers practical instructions for businesses to comply with the legal framework and operate within the established regulations.

Understanding the Interplay:

These legal documents work together to form a comprehensive framework for establishing and operating domestic travel businesses in Vietnam. Each document builds upon the previous one, providing specific details and clarifications to ensure clarity and enforceability.

 

2. Key Conditions

Successfully establishing a domestic travel business in Vietnam hinges on fulfilling several critical conditions. These conditions encompass both the general requirements for business establishment and the specific regulations pertaining to the travel industry. Let's delve deeper into each key condition:

1. Company Establishment:

  • Business Registration: You must register your company at the business registration office in the relevant province or city. This process involves submitting the necessary documents, such as the company charter, proof of address, and personal identification of founding members.
  • Business Registration Certificate: Upon successful registration, you will receive a business registration certificate, which serves as official recognition of your company's existence and legal status.

2. Travel Business License:

  • Licensing Authority: Obtaining a domestic travel business license is mandatory to operate legally and offer travel services within Vietnam. This license is issued by the provincial/municipal tourism department.
  • Deposit Requirement: To qualify for a license, you must deposit a specific amount of money at a Vietnamese bank. The current requirement for domestic travel businesses is VND 100 million (approximately USD 4,200). This deposit serves as a financial guarantee and demonstrates your commitment to the business.
  • Certificate of Deposit: After making the deposit, the bank will issue you a certificate of deposit, which is a crucial document required for the license application.
  • Person in Charge of Travel Services: This individual plays a critical role in managing and overseeing the travel operations. They must possess a relevant qualification, such as:
    • A diploma in travel management or a related field from a recognized educational institution.
    • In case of holding a diploma in another major, they must obtain a certificate of domestic tourism operation through additional training and assessment.

3. Additional Requirements:

  • Engraving the Company Seal: Every business in Vietnam requires a company seal for official documentation and contracts. You need to design and engrave your company seal after obtaining the business registration certificate.
  • Tax Registration and Invoicing: Register your business for initial taxes with the relevant tax authorities and obtain authorization to issue invoices for your services.
  • License Tax Payment: Pay the annual license tax applicable to travel businesses, as determined by Vietnamese tax regulations.
  • Capital Contribution: Ensure you make the full capital contribution declared during registration within 90 days of receiving the business registration certificate.

Additional Considerations:

  • Foreign Investors: While foreign investors can participate in the Vietnamese tourism industry, they can only establish domestic travel businesses in joint ventures with Vietnamese partners.
  • Tour Guides: Vietnamese citizenship is mandatory for individuals working as tour guides in domestic travel businesses.

Importance of Compliance:

Fulfilling these key conditions is essential for establishing and operating a domestic travel business in Vietnam. Failing to comply with these regulations can lead to legal consequences, including fines, license suspensions, or even business closure.

 

3. Process Steps

Setting up a domestic travel business in Vietnam involves a series of interconnected steps. Following these steps systematically ensures a smooth and efficient establishment process while adhering to legal requirements. Here's a breakdown of the key steps involved:

Step 1: Prepare Company Establishment Documents:

  • Gather essential documents: This includes the company charter outlining details like the company name, purpose, capital contribution, and management structure. Additionally, prepare personal identification documents of founding members/shareholders and proof of address for the company's headquarters.
  • Seek professional guidance: Consider consulting with lawyers and accountants specializing in business establishments in Vietnam. Their expertise can help navigate legal complexities, ensure document accuracy, and address potential challenges.

Step 2: Submit the Application to the Department of Planning & Investment:

  • Visit the relevant office: Locate the Department of Planning & Investment (DPI) in the province or city where you plan to establish your business.
  • Submit the application package: Present the prepared company establishment documents along with the required application form. Ensure all documents are complete, accurate, and translated into Vietnamese if necessary.
  • Pay processing fees: Submit the applicable fees associated with business registration as determined by government regulations.

Step 3: Disclosure of Business Registration Information:

  • Public announcement: Once your business registration is approved, you are required to publicly announce your company's establishment on the National Portal for Business Registration in Vietnam.
  • Transparency and accessibility: This step ensures transparency and provides public access to information about your newly established business.

Step 4: Engraving the Seal and Completing Post-Establishment Procedures:

  • Design and engrave the company seal: This official seal will be used on legal documents and contracts, signifying your company's identity.
  • Register for initial taxes and obtain invoices: Register your business with the relevant tax authorities and obtain authorization to issue invoices for your travel services.
  • Declare and pay license tax: Pay the annual license tax applicable to travel businesses, as determined by Vietnamese tax regulations.
  • Make full capital contribution: Ensure you contribute the full capital amount declared during registration within 90 days of receiving the business registration certificate.

Additional Considerations:

  • Timeline: The processing time for business registration typically takes around 3 working days from the date of application submission, subject to the completeness and accuracy of the documents.
  • Post-registration support: Following successful registration, consider seeking ongoing legal and accounting support to ensure compliance with regulations and navigate operational complexities.

 

4. Additional Considerations

While the core steps and conditions outlined previously provide a roadmap for establishing your domestic travel business in Vietnam, several additional considerations deserve your attention:

Foreign Investors:

  • Joint Ventures: Foreign investors seeking to enter the domestic travel market must establish joint ventures with Vietnamese partners. This collaboration requires the careful selection of a reliable and experienced Vietnamese partner to navigate cultural nuances, legal complexities, and ensure successful business operations.
  • Restrictions: Foreign investors cannot hold a controlling stake in the joint venture, and tour guides must be Vietnamese citizens. Understanding these limitations is crucial for informed decision-making when structuring your business partnership.

Human Resources:

  • Qualified Personnel: Apart from the person in charge of travel services, ensure your team possesses the necessary skills and qualifications to deliver exceptional travel experiences. This may involve recruiting individuals with expertise in areas like tour planning, customer service, and destination management.
  • Training and Development: Investing in ongoing training and development programs for your staff can enhance their knowledge, skills, and ability to cater to diverse customer needs, ultimately contributing to your business's reputation and success.

Marketing and Promotion:

  • Understanding the Market: Conduct thorough research to understand the Vietnamese tourism market, including target customer segments, popular destinations, and prevailing trends. This knowledge will guide your marketing strategies and ensure effective outreach to your desired audience.
  • Developing a Marketing Plan: Develop a comprehensive marketing plan that leverages various channels, such as online platforms, social media, and collaborations with local tourism agencies, to reach potential customers and promote your travel packages effectively.

Operational Considerations:

  • Building Partnerships: Establishing partnerships with hotels, transportation providers, and local attractions can create a network of reliable partners, enhance your service offerings, and provide competitive advantages in the market.
  • Technology Adoption: Integrating technology solutions like online booking systems, travel management software, and digital marketing tools can streamline operations, improve customer experience, and enhance your business's efficiency.

Staying Informed:

  • Legal Updates: The Vietnamese legal landscape can evolve, so staying informed about updates to regulations, licensing requirements, and tax policies is crucial to ensure ongoing compliance and avoid potential disruptions to your business operations.
  • Industry Trends: Continuously monitor emerging trends in the Vietnamese tourism industry, such as traveler preferences, sustainability practices, and technological advancements. Adapting your offerings and strategies to align with these trends can help you stay competitive and cater to evolving customer demands.

 

5. Conclusion

Establishing a domestic travel business in Vietnam presents an exciting opportunity to tap into the country's thriving tourism industry. While navigating the legal framework and fulfilling specific requirements may seem intricate, this comprehensive guide has equipped you with the essential knowledge and steps to embark on your entrepreneurial journey with confidence.

Remember, meticulous planning, adherence to legal regulations, and a commitment to quality service are paramount for success. By carefully considering the additional factors discussed, such as foreign investment limitations, human resource development, and continuous industry adaptation, you can position your business for sustainable growth and contribute to enriching travel experiences for both domestic and international visitors.

Embrace the vibrant Vietnamese tourism landscape, leverage its potential, and pave the way for a successful and rewarding venture in this dynamic market. 

If you need further explanation on this subject, please don't hesitate to contact us through email at lienhe@luatminhkhue.vn or phone at: +84986 386 648. Lawyer To Thi Phuong Dzung