Establish a company in Vietnam for hotel service

Our country is encouraging and creating maximum conditions for the tourism industry to develop. Therefore, hotel business activities are constantly increasing to meet the requirements of domestic and foreign tourists. However, this is a conditional business line, so it is necessary to carry out the necessary procedures to conduct business activities legally. Viet An Law hereby will analyze the procedures to establish a company in Vietnam for hotel service according to the current law.

Legal basis

• Vietnam’s WTO Commitment Schedule;
• Law on Enterprise 2020;
• Law on Investment 2020;
• Law on Tourism 2017;
• Decree 01/2021/ND-CP on business registration;
• Decree 31/2021/ND-CP detailing and guiding the implementation of several articles of the Investment Law;
• Decree 168/2017/ND-CP detailing several articles of the Law on Tourism, as amended and supplemented by Decree 142/2018/ND-CP, Decree 94/2021/ND-CP;
• Decree 122/2021/ND-CP regulates sanctions for administrative violations in the field of planning and investment.

What is the hotel service business?

Hotels are one of the types of tourist accommodation establishments as prescribed in Article 48 of the Law on Tourism 2017. According to the instructions in Article 21 of Decree 168/2017/ND-CP, hotels are tourist accommodation establishments. Quality assurance schedule for necessary facilities, equipment, and services to serve tourists; including: Resort hotels, roadside hotels, floating hotels, and city hotels.

Conditions for hotel service business

Market access conditions for foreign investors

For hotel services, Vietnam has committed to the WTO Schedule of Specific Commitments on services in the Hotel accommodation services (CPC 64110), food provision services (CPC 642), and beverage provision services (CPC 643).

To establish a company in Vietnam, foreign investors must meet conditions including:

• Regarding capital contribution: the capital contribution ratio of foreign investors in the hotel service industry is unlimited;
• Regarding investment form: foreign investors can establish representative offices, branches, and companies in Vietnam with a capital contribution ratio of up to 100% foreign capital;
• In addition, within 8 years from the date of accession, service provision needs to be carried out in parallel with investment in construction, upgrading, renovation, or acquisition of hotels. Currently, this condition has expired.

General conditions

• Have business registration according to the law;
• Meet the conditions of security, order, environmental sanitation, safety, fire prevention, and fighting according to the provisions of law for tourist accommodation establishments.

Specific conditions

Regarding technical facilities and services:

• Have a minimum of 10 bedrooms; There is a reception desk and shared bathroom.
• There is parking for guests at resort hotels and motels.
• There are kitchens, dining rooms and catering services for resort hotels, floating hotels, and roadside hotels.
• There are beds, mattresses, blankets, pillows, face towels, and bath towels; Change mattress covers, blanket covers, pillow covers, face towels, and bath towels when there are new guests.
• There is staff on duty 24 hours a day.

Procedures for establishing enterprises with Vietnamese capital

Step 1: Prepare the type of business.

According to regulations, to do hotel service business, it is necessary to register the business according to the law. Therefore, if a business wants to do hotel service business, it needs to register its business. Enterprises can choose business forms according to the Enterprise Law 2020 such as joint stock companies, partnerships, limited liability companies, and private enterprises.

When choosing the type of business, you also need to pay attention to choosing the business name, headquarters, and cases where it is not possible to establish a business that meets the conditions under the Enterprise Law 2020.

Note, that when doing hotel business, businesses will register for short-term accommodation services with industry code 5510. For hotels that combine the provision of food and beverage services, you can refer to some additional industry codes:

Step 2: Prepare documents to register a company in Vietnam

The registration dossier to establish a hotel service business includes the following documents as prescribed in Decree 01/2021/ND-CP:

• Application for business registration.
• Company charters.
• List of Members for multiple-member limited liability companies; List of founding shareholders and list of shareholders who are foreign investors for joint stock companies.
• Copies of legal documents of organizations and individuals who are members/shareholders of the company; Legal documents of the individual for the authorized representative and document appointing the authorized representative.
• Investment registration certificate in case the enterprise is established or participates in the establishment by foreign investors or economic organizations with foreign investment capital according to the provisions of the Investment Law.
• Power of Attorney for Viet An Law to carry out the procedure.

Step 3: Submit the application and the competent authority

• After preparing the documents, the applicant to establish a hotel service business submits the documents to the Business Registration Office of the Department of Planning and Investment where the business is headquartered.
• After receiving the business registration application, the Business Registration Office issues a Receipt of receipt of the application to the applicant.
• After giving the receipt of the application, the Business Registration Office fully and accurately enters the information in the business registration application, checks the validity of the application, and downloads the digitized documents. in the business registration dossier in the National Business Registration Information System.
• Enterprises are granted a Registration Certificate when they meet all the conditions prescribed in Clause 1, Article 27 of the Law on Enterprises. The Business Registration Office issues the Business Registration Certificate in the National Business Registration Database within 03 working days from the date of receipt of valid documents.

Step 4: Publish the business registration content

After being granted a business registration certificate, an enterprise must make a public announcement on the National Business Registration Portal within 30 days from the date of publication. Enterprises pay the fee and send a request for publication of enterprise registration contents to the Business Registration Office where the enterprise is registered.

The published content includes the contents of the Business Registration Certificate and the following information:

• Business lines;
• List of founding shareholders; List of shareholders who are foreign investors for joint stock companies (if any).

Note: Enterprises that fail to disclose or disclose business registration content on time may be subject to an administrative penalty of between 10 million and 15 million VND according to the provisions of Article 45 of Decree 122/2021/ND-CP.

Step 5: Engrave the company seal

Currently, after engraving the seal, like other types of businesses, the company manages the seal itself without having to carry out the procedures for posting the seal announcement as before. The Company reserves the right to engrave multiple seals without any restrictions. Business seals only need to ensure uniformity in form and contain the name and business code information.

After establishment, for the hotel service business to operate legally, the following issues need to be noted:

• Hang signs at company headquarters;
• Engraving and printing signs;
• Notice of issuance of electronic invoices and bank accounts;
• Initial tax declaration.
• Declare and pay license tax;
• Contribute capital in full on time according to legal regulations.

Procedures for establishing foreign business in Vietnam

The procedures for establishing a foreign-invested hotel service business are similar to establishing a domestic enterprise. However, because it is an investment project of a foreign investor, before carrying out procedures such as establishing a domestic enterprise, the enterprise needs to carry out procedures to apply for an Investment Registration Certificate.

For projects subject to investment policy approval

If the project to establish a hotel service business is subject to investment policy approval according to the provisions of Articles 30, 31, and 32 of the Investment Law 2020, it is necessary to carry out the procedures as prescribed in Article 35 of the Decree. Decree 31/2021/ND-CP. Specifically:

• Pursuant to the Decision approving the investment policy and decision approving the adjustment of the investment policy, the investment registration agency shall issue and adjust the Investment Registration Certificate within 05 working days from the date of receipt. Decision approving investment policy, Decision approving investment policy adjustment;
• For investment projects under the investment policy approval authority of 02 or more provincial People’s Committees, based on the request of the Ministry of Planning and Investment, the Prime Minister assigns the Department of Planning and Investment to a province or centrally run city where the investor implements an investment project, places or plans to locate an executive office to implement an investment project and issue an Investment Registration Certificate.
• For investment projects that have had their investment policy approved and the investor has won the auction or bid; the investor submits a written request for an Investment Registration Certificate to the investment registration agency to receive an Investment Registration Certificate within 05 working days from the date the investment registration agency receives proposed documents.

For projects not subject to investment policy approval

If the project to establish a hotel service business is not subject to investment policy approval, it is necessary to carry out procedures to apply for an Investment Registration Certificate as prescribed in Article 36 of Decree 31/2021/ND-CP. Specifically:

• The investor submits 01 set of application documents for an Investment Registration Certificate to the investment registration agency. In case the investment project is implemented in 02 or more provincial administrative units, the investor submits documents to the Department of Planning and Investment of a province or centrally run city where the investor implements the project, sets up, or plans to set up an executive office to apply for an Investment Registration Certificate for the project.
• For investment projects that have been put into operation, the investor submits an application in which the investment project proposal is replaced by a report on the implementation of the investment project from the time of implementation to the time of issuance of the Investment Registration Certificate.
• The investment registration agency issues an Investment Registration Certificate to the investor within 15 days from the date of receipt of valid documents when the project meets the prescribed conditions.

Services of Viet An Law on establishing hotel service businesses

• Legal advice on documents, procedures, and licenses to establish a hotel service business;
• Drafting documents, records, and papers for customers;
• Representing customers, conducting procedures at state agencies to obtain an Enterprise Registration Certificate as well as other legal documents:
• Regular legal advice for businesses after they are established.

If you have related questions or need legal support to establish a company in Vietnam for hotel service as well as establishing other businesses, please contact Viet An Law for the best support.