Conditions for establishing a foreign-invested travel company in Vietnam

Realizing that in the coming time, more and more international travel service businesses will be established, to create conditions for companies operating in the field of travel, on October 28, 2021, the Government issued Decree No. Decree 94/2021/ND-CP amending Decree 168/2017/ND-CP detailing a number of articles of the Law on Tourism regarding changes in deposit levels for international travel business.

Legal grounds

• Law on tourism 2017;
• Law on investment 2020;
• Law on enterprises 2020;
• Decree No.168/2017/ND-CP;
• Decree No.01/2021/ND-CP;
• Decree No. 94/2021/NĐ-CP;
• Schedule of commitments on services of Vietnam in WTO.

Scope of travel services

Foreign-invested enterprises shall only provide international travel services for international tourists to Vietnam, unless otherwise prescribed by the treaties to which the Socialist Republic of Vietnam is a signatory.

Investment formation

When setting up a foreign-invested company in Vietnam, there are usually two methods:  Investment in the form of capital contribution or purchase of shares or stakes and investment in the establishment of a business organization. However, to establish a foreign-invested tourism company in Vietnam, foreign enterprise may only put the company into operation by allowing foreign investors to contribute capital or purchase shares or stakes in the enterprise in Vietnam.

Capital and capital contribution ratio of foreign investors

According to the Schedule of commitments on services of Vietnam in WTO, foreign investors are allowed to provide travel agencies and tour operator services (CPC 7471) through a joint venture with a Vietnamese partner there is no restriction on the capital contribution of the foreign side, provided that the capital contribution is less than 100%. In addition, for tour organization activities, foreign investors are required to enter into a joint venture with a domestic travel company that has been granted an international travel business license.

Conditions on investors

Foreign investor

Individuals shall have full legal capacity. If it is an organization, it must have a business registration certificate with consular certification. Investor’s nationalities are countries in WTO

Vietnamese partner

Vietnamese enterprises have a license to provide international travel services. The enterprise has paid a deposit to a bank with a deposit level of 50.000.000 VND (Fifty million Vietnam dongs). This margin is valid until December 31, 2023.  From January 1, 2024, the deposit level for international travel service business according to Article 14 of Decree 168/2017/ND-CP is 250.000.000 VND (Two hundred fifty million Vietnam dongs).

Conditions for international travel business

1. Being an enterprise established in accordance with the law on enterprises;
2. Escrow for international travel service business at the bank.
3. The person in charge of the travel service business must have a college degree or higher, majoring in travel. In case of graduating from a college or higher in another major, those must study and take the exam for an international tourism management certificate. According to Circular 06/2017/TT-BVHTTDL dated December 15, 2017 of the Ministry of Culture, Sports and Tourism, the following training qualifications are considered to be specialized in travel:

• Management of tourism and travel services;
• Travel management;
• Manage the tour;
• Tourism marketing;
• Tourism;
• Travel and tourism;
• Tourism business and management.
• MICE Tourism Management
• Travel agent
• Tourguide
• Sectors, professions, and majors may show one of the phrases “tourist”, “tourism”, “tour guide” trained and awarded by an educational institution in Vietnam before the date of this Circular. This is in effect.
• Sectors, occupations or majors may show one of the phrases “tourism”, “travel”, “tour guide” which is trained and awarded by a foreign training institution.
• In case the diploma does not show the fields, occupations or majors specified at Points l and m of this Clause, the graduation transcript or diploma appendix showing the industry, profession or major, in which there is one in the phrases “tourist”, “travel”, “tour guide”.
• In case the person in charge of international travel service business does not study the above-mentioned specialties, he/she must participate in international tourism operator training courses including the following training contents:
• Basic knowledge of the industry: Vietnam’s political system; legal documents related to tourism; Tourism Overview; tourism marketing; tourist psychology and communication art; international cultural exchange;
• Specialized knowledge and operation of tourism: an overview of the travel service business; tourism market and tourism products; product design and travel program pricing; tourist areas, tourist attractions in Vietnam; tourism operations; sales and customer care; marketing and communication; currency and international payments in tourism; entry and exit operations; domestic and international air transportation procedures; application of information technology in business management and development;
• Practice international tourism management.

The person in charge of the provision of travel services and tour guides

The person in charge of the provision of travel services holds a college degree or higher in travel; In case he/she holds a college degree or higher in another major, a certificate of training in international tour operation is required.

Tour guides in foreign-invested travel companies in Vietnam must be Vietnamese citizens.

Escrow margin for issuance of travel business license

( Applicable from October 28, 2021 to the end of December 31, 2023 )

According to the provisions of Decree 94/2021/ND-CP detailing the Law on Tourism 2017 as follows:

Margin for international travel service business:

• Business travel services for international tourists to Vietnam – inbound travel service: 50,000,000 (fifty million) VND;
• Business travel services for tourists going abroad – outbound travel service: 100,000,000 (one hundred million) VND;
• Business travel services for international tourists to Vietnam and tourists going abroad: 100,000,000 (one hundred million) VND

Submit escrow and issue Escrow Certificate

• When the enterprise requests to deposit the escrow to the account at the bank, the bank receives the escrow and the enterprise enters into the escrow contract. On the basis of the escrow contract, the escrow-receiving bank shall freeze the escrow amount deposited by the enterprise at the bank.
• An escrow contract has the following main contents: Name, address, representative of the enterprise; name, address, representative of the bank; reason for escrow payment; escrow amount; escrow interest rates; paying interest on escrow margin; use of escrow money; escrow withdrawal; return the escrow; responsibilities of related parties and other agreements in accordance with the provisions of law and not contrary to the provisions of law.
• After freezing the escrow, the escrow receiving bank shall issue a certificate of escrow for providing travel services to the enterprise according to Form No. 01 specified in the Appendix to this Decree 168/2017/ND-CP as amended from time to time.

Management and use of escrow money

• In case a tourist died, has an accident, is at risk, or has his or her life infringed upon which needs to be brought back to his/her place of residence or for urgent treatment that the business cannot afford to arrange funds to deal with in a timely manner, the enterprise sends a request for temporary release of the escrow to the travel business license granting agency. Within 48 hours from the time of receiving the enterprise’s request, the travel business license granting agency shall consider and request the bank to allow the enterprise to deduct the escrow account for use or refuse.
• Within 30 days from the date the money is withdrawn from the escrow account, the enterprise is responsible for supplementing the used escrow to ensure the escrow margin as prescribed in Article 14. Decree 94/2021/ND-CP. In case the enterprise fails to comply, the bank shall send a written notice to the licensing agency for handling measures in accordance with law.
• Enterprises send a written request for escrow refund to the bank in the following cases:
  • There is a written notice from the travel business license granting agency that the enterprise is not allowed to issue a travel service business license or change the escrow receiving bank;
  • There is a document issued by the travel business license granting agency on the refund of the escrow after revoking the travel service business license.

Negotiate deposit interest rate with the Bank

 According to our current update, the banks that receive the deposit of the international travel business usually apply the agreement on the annual interest rate with the deposit. this of the business. Banks with relatively professional international travel business deposit operations are Bank for Foreign Trade of Vietnam (Vietcombank); Asia Commercial Joint Stock Bank (ACB), An Binh Bank,…

Change deposit level for international travel business

For businesses that have been granted an international travel business license before October 20, 2021, make a deposit to withdraw the excess deposit and notify the new deposit file to the National Administration of Tourism.

Procedures for establishing a foreign-invested travel company in Vietnam

Step 1: Establishing a travel company in Vietnam with 100% domestic capital

When you establish a travel company in Vietnam, the business line must have an industry code: Tour operators, details: Domestic travel business; International tourism business. (Industry code: 7912)

Documents include:

• Application form for enterprise registration.
• The company’s charter.
• List of members of the multi-member limited liability company; lists of founding shareholders and shareholders that are foreign investors of the joint-stock company;
• A certified copy of your identity card or citizen identification card or passport (if you are an individual); establishment decision, business registration certificate or equivalent document, and citizen identification card or identity card or passport with written authorization for the capital manager in Vietnam (if an organization);
• Authorization letter for Viet An law firm.

The person responsible for the application for enterprise registration shall submit the application to the Business Registration Office of the province where it is headquartered.

Step 2: Apply for an international travel business license

An application for the license for the provision of international tours includes:

• An application form for issuance of the license for the provision of international tours according to the specimen prescribed by the Minister of Culture, Sports and Tourism;
• A certified true copy of the business registration certificate or investment registration certificate issued by a competent authority;
• A certificate of deposit payment;
• A certified true copy of qualifications of the person in charge of the provision of travel services prescribed in Point c, Clause 2, Article 31 of this Law;
• A certified true copy of the decision on appointment or employment contract between the travel service provider and the person in the charge of the provision of travel services.

The enterprise applying for the license the for provision of international tours shall submit 01 application to the General Department of Tourism.

For your further information, kindly refer to Procedures for granting an international travel business license of Viet An Law Firm.

Step 3: A foreign investor shall follow procedures for registration of capital contribution or purchase of shares/stakes of Vietnamese tourism companies

Documents for registration of capital contribution or purchase of shares or stakes of Vietnam tourism companies include:

• A registration form for capital contribution/purchase of shares/stakes
• Copies of legal documents of the individual or organization that contributes capital or purchases shares/stakes and of the business organization to which foreign investors contribute capital or whose shares/stakes are purchased by foreign investors;
• A principal agreement on capital contribution or purchase of shares/stakes between the foreign investors and the business organization to which foreign investors contribute capital or whose shares/stakes are purchased by foreign investors or between the foreign investors and the shareholders or members of such business organization;
• Authorization letter for Viet An Law Firm.

Enterprises submit an application for capital contribution/purchase of shares/stakes to the Investment Registration Office of the province where it is headquartered.

Customers wishing to establish a foreign-invested travel company, please contact Viet An Law Firm for detailed support!