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Vietnamese love taking holidays and as incomes have risen in recent years they have taken to travelling more and more. Furthermore, Vietnam has become a popular travel destination for travellers from outside of the country–in 2019, it welcomed some 19 million foreign visitors, a number it is expected to reach again in the not-too-distant future.

Opening a hotel or resort in Vietnam for foreign firms or individuals, however, is not always easy. Not only are there several technical and licensing requirements that need to be met, but Vietnam also has its own unique travel culture.

Understanding the nuances of Vietnamese travel culture and the complexities of business establishment procedures in advance of entering the market can therefore be crucial to the success of a new hotel or resort in Vietnam.

Travel culture in Vietnam

For foreign firms or individuals looking to open a hotel or resort in Vietnam, there are a few key differences in how Vietnamese consumers take their holidays, compared to many Western travellers.

Timing

In general, Vietnamese like cooler climates and are not big fans of being in the sun. With this in mind, Vietnamese tend to spend their time inside during the day when the sun is at its hottest. This typically means that outdoor attractions, beaches, for example, are generally deserted from noon until the sun goes down. In this light, hotel rooms are more likely to be occupied in the early afternoon than in the early evening.

Guided tours

Whereas tourists from Western countries tend to take a more self-guided approach, or at least limit paid tours to only a portion of the day, when visiting a new location, Vietnamese often prefer whole-day guided tours. Hoteliers providing tours to their clientele should keep this in mind and ensure they have options for both local and foreign travellers.

Foods

When Vietnamese travel in Vietnam it is very much all about the food. Bringing back a local delicacy to share with friends and family or colleagues in the office is common. Dried fruit in particular is a very popular gift. This is worth keeping in mind for hotel operators looking to add a gift shop to their establishment. Furthermore, ensuring local staff can direct guests to good quality local dining experiences, can add a lot of value to a local traveller’s trip.

Establishment procedures for hotels in Vietnam

Hotels in Vietnam with foreign ownership are generally established as a limited liability company either as a wholly owned foreign enterprise or a joint venture with a Vietnamese partner. This article provides a broad overview of establishment procedures with a more thorough, detailed technical guide available here: How to Form a Company in Vietnam: Technical Guide 2024

Wholly foreign-owned hotels in Vietnam

A wholly foreign-owned hotel or resort in Vietnam allows a foreign investor complete control over a company’s operations. It is, however, generally more costly and time-consuming.

Specifically, before they can apply to register a business, foreign entrepreneurs who want to set up a wholly foreign-owned company will need to first apply for an Investment Registration Certificate (IRC) which they do not have to do with a local partner.

An IRC is basically required to ensure that foreign firms are not engaging in business in restricted or forbidden business lines. The conditions for approving an IRC are outlined in the Law on Investment which also states that IRCs should be issued in between 5 to 15 days. In reality, however, it is usually around 30 to 45 days.

Joint venture hotels in Vietnam

With a local partner foreign business persons do not need to file for an Investment Registration Certificate, but rather the Vietnamese partner establishes the company and the foreign investor buys a share. In this sense, working with a local business partner can considerably reduce setup costs and application processing times. 

Joint ventures, however, can be risky. A mismatch in work ethics and management styles can cause conflict in the workplace, particularly in cross-cultural settings. For example, whereas in Vietnam it is common to financially penalise staff for arriving late or for using their phone during work hours, in Western countries, this would be unacceptable. Understanding these little nuances of cross-cultural communication, in a joint venture environment, may be crucial to a business’s success.

Hotel franchises in Vietnam

Buying into a hotel franchise is an option for foreign investors but they should be mindful that establishing a business via a franchise has its own governing regulations for foreign traders.

Those regulations are covered in Decree 35/2006/ND-CP and Decree 120/2011/ND-CP.

In order to open a hotel franchise in Vietnam approval must be granted by the Ministry of Industry and Trade. Said approval requires traders to compile an application including the following:

• A franchise brochure containing the full details of the agreement to be entered into between the franchisor and the franchisee.
• Documentation proving the existence of the foreign trader as a legal entity.
• Documentation outlining the protection titles of any industrial property rights.
• Audited financial statements of the franchisor for the previous year.
• Evidence of sub-franchise approval (if applicable).

According to Decreed 35/2006/ND-CP after submitting a franchising application to either the Ministry of Industry and Trade or the provincial Department of Industry and Trade, applicants should receive a response in five working days.

Visas for foreign hotel owners in Vietnam

Foreign business persons who establish a hotel in Vietnam are likely to qualify for an investor visa. The length and cost of an investor visa will depend on the value of the investment. 

Vietnam investor visas

Investor visas in Vietnam are known as DT visas (DT stands for đầu tư which translates to investor). There are four types of investor visas which vary in length depending on the value of the investment.

Investor visas in Vietnam 2023

Source: Vietnam Visas for Doing Business in Vietnam: Quick Read 2024 

Choosing a location for a hotel in Vietnam

Choosing the right location for any business can be the difference between success and failure. Firms and individuals looking to establish a hotel in Vietnam should consider the best market for their products and services. 

Market research

Market research is essential when choosing a location for a new hotel in Vietnam. Given the number of hotels in Vietnam’s biggest cities, the right location can make or break a new venture.

Most of Hanoi and Ho Chi Minh City’s key attractions are located in the city centres, however, space in these areas can be limited. These areas can also be packed with foreign tourists which might be off-putting for foreign visitors in town on business. These areas are also the most expensive.

That said, taxi services in Vietnam are very cheap and motorbike taxis, particularly through ride-sharing apps, can take travellers a few kilometres for just a dollar or two and can also be super quick. In this light, for budget accommodation providers locations outside of the downtown areas of the big cities could prove workable and profitable.  

Airbnb

AirBNB has become very popular in Vietnam. Rooms, apartments, and houses are available all over the country through the home-sharing app. Aspiring hotel proprietors should keep this in mind when conducting market research and scouting out locations.

Commercial leases in Vietnam

Depending on the size of the establishment rent can vary widely. That said, whether establishing a small bed and breakfast or a multi-storey top-class hotel, it’s very likely proprietors will need to sign a commercial lease.

The Law on Real Estate Business 2014 regulates leases broadly and this includes commercial leases. A typical lease agreement in Vietnam will have several key features:

• The length of the lease: In Vietnam a commercial lease typically runs for about five years;

• The payment terms: How often rent payments will be made and how. Typically, rent payments are made quarterly, however, they can also sometimes be monthly, every six months, or yearly; and

• The division of responsibilities: who is responsible for what and when between the landlord and the tenant.

These are just the broad strokes but are also the most pivotal components of the agreement. Other aspects of the agreement can generally be negotiated between the landlord and the tenant without too much direction from the real estate law.

Key regulations for hotels in Vietnam

Technical requirements for hotels in Vietnam

Section 3, Article 22 of Decree 168 lists several technical requirements for hotels operating in Vietnam. These are that they must have:

• At least ten bedrooms; 
• A reception desk and shared bathroom;
• Parking;
• A kitchen, dining room and food services;
• Beds, mattresses, blankets, pillows, face towels, and bath towels; and
• Staff on duty 24 hours a day.
• The Decree also stipulates that they must change mattress covers, blanket covers, pillow covers, face towels, and bath towels when there are new guests.

Getting a star-rating

Star ratings are regulated by law in Vietnam, however, in reality, hotels often make star rating claims without ever being evaluated. It’s unusual for law enforcement to crack down on this practice.

Vietnam’s standards for star ratings are detailed here: TCVN 4391:2015.

Getting a liquor licence in Vietnam

Bars in Vietnam that wish to sell alcohol will need to apply for a liquor licence. 

The sale and production of alcohol in Vietnam are generally covered by the Alcohol Law. Specific licensing requirements for bars that wish to sell alcohol in Vietnam are outlined in Article 23 of Decree No: 105/2017/ND-CP (with some amendments in Decree 17/2020/ND-CP. New bars need to apply to the Economic Department or the Economic and Infrastructure Department of the district People’s Committee.

The application for a  liquor licence should include:

• An application form as outlined in the decree.
• A copy of the business registration certificate.
• A copy of the lease contract and documentary proof the business has the legal right to use the premises.
• A copy of a contract or agreement with an alcohol producer, distributor, or wholesaler.

An application for a liquor licence in Vietnam attracts an appraisal fee of VND 1,200,000 (US$49). There is also an issuing fee of VND 200,000 (US$8). This is outlined in Circular 168/2016/TT-BTC. 

See also: How to Open a Bar in Vietnam 2024: Ultimate Guide

Getting a food safety certificate

In order to establish a hotel in Vietnam, business owners need to get themselves a food safety certificate. To apply for a food safety certificate, an application must be completed and submitted to the Ministry of Industry and Trade. The application should include:

• A photocopy of the firm’s business registration certificate.
• A written request from the business owner for food safety certification.
• Health certificates of any staff coming into contact with food in the establishment.
• Details of the equipment, facilities, and appliances and assurance that they comply with food safety requirements.
• Staff food safety training certificates.

Hotels in Vietnam that trade without a food safety certificate may be hit with a fine of up to VND 40 million (US$1,662).

Hiring hotel workers in Vietnam

Entry-level hotel workers in Vietnam are generally paid around minimum wage. Minimum wages in Vietnam are different for each of four key regions. These are outlined in Conclusion 83-KL/TW which came into effect on July 1 2024.

Vietnam minimum wage from July 1, 2024

*Hourly rate calculated on 196 hours per month

See also: Minimum Wage in Vietnam 2024: Your Questions Answered

Guest services agent wages in Vietnam

Whereas entry-level staff are paid close to minimum wage, guest services agents of hotels and resorts in Vietnam can earn substantially more. According to labour recruitment firm Indeed, the average wage of a guest services agent in Vietnam is VND 9,847,883 or US$386.84. Note that Indeed’s data is taken from a relatively small pool.

Director of rooms’ wages in Vietnam

A Director of Rooms with five years of experience can also command a considerably higher wage. Adecco’s 2024 Salary Guide notes that in Ho Chi Minh City they can earn as much as VND 70 (US$$2,749.68) to 100 million (US$$3,928.12) per month and in Hanoi as much as VND 65 (US$$2,553.28) to 90 million (US$$3,535.30) per month.

See also: Average Salary in Vietnam 2024: Quick Guide

Employee entitlements and benefits in Vietnam

A standard work week in Vietnam is 48 hours. An employee can work up to 40 hours of overtime in a month not exceeding 200 hours of overtime in a year. There is, however, an exception for some workers in fields like manufacturing whereby they can work up to 300 hours of overtime in one year.

Workers in Vietnam are entitled to 12 days of annual leave a year. There are also six public holidays in Vietnam that vary in length but all-up give workers an additional 11 days off. 

Employees in Vietnam are also entitled to social and unemployment insurance. Employers generally need to contribute the equivalent of 21.5 percent of a local employee’s wage to these two social safety nets whereas employees contribute 10.5 percent . For foreign employees it is only 20.5 percent and 9.5 percent.

See also: Vietnam’s Labour Law for Foreign Firms in 2024: Quick Read

Intellectual property protection

Protecting intellectual property in Vietnam can be challenging. It is common for local businesses to use brand names and logos of other more well-established businesses. As of April 2024, Vietnam remained on the Office of the US Trade Representative’s Special 301 Report which labelled IP enforcement. That said, it is a signatory to most international intellectual property treaties and it has made a number of key reforms in recent years to strengthen IP protections.

Trademarking a hotel’s intellectual property in Vietnam

With respect to establishing a resort or hotel, there are a number of items of intellectual property that resort owners may want to consider trademarking. A unique product name, a brand name, or a company logo could all be the subject of a trademark application.

Note that Vietnam is a signatory to the Madrid Agreement and therefore, firms with trademarks approved in other countries that are also party to the agreement will automatically have their trademarks recognised in Vietnam.

Likewise, businesses that register a trademark in Vietnam will automatically have protection in the other countries party to the agreement.

Filing a trademark application in Vietnam

In order to apply for a trademark a firm must first complete an application that includes:

• A trademark registration declaration,
• An image of the trademark between 3cm x 3cm and 8cm x 8cm,
• A list of products and services that are to be registered;
• A power of attorney, if necessary, and
• Proof of payment of all necessary fees and charges.

Trademarks in Vietnam are then filed with the Intellectual Property Office of Vietnam (IPVN). It can take 12 to 18 months for a trademark application in Vietnam to be approved.

Fees and taxes for hotels in Vietnam

New businesses will need to register with the General Department of Taxation in order to pay their taxes and ensure they are tax-compliant. There are also a number of recurring fees and taxes in Vietnam that new hotel owners should be aware of.

Business licence fees

Limited liability companies in Vietnam are required to pay a business licence fee annually. This must be paid by January 30. These fees depend on the registered capital of the firm.

Business licence fees, 2023

Source: Decree No. 20/VBHN-BTC

Value-Added tax (VAT)

The Value Added Tax in Vietnam is a consumption-based tax on goods and services in Vietnam. It is generally charged at the point of sale for retail businesses. There are some exceptional circumstances in which VAT declarations and payments can be made quarterly, however, payments are usually made to the General Department of Taxation each month. VAT is generally charged at 10 percent of the sale price, though for select specialty items, it is only 5 percent, and some items are also exempt.

Personal Income Tax (PIT)

Vietnam’s Personal Income Tax is levied on a worker’s wages in Vietnam. The amount to be collected is on a sliding scale, the more a worker earns the more PIT they pay. Employers are required to collect PIT on an employee’s wages and pay said tax to the General Department of Taxation each month. If approved by the authorities an enterprise may be able to make tax payments quarterly instead.

Corporate Income Tax (CIT)

Corporate Income Tax in Vietnam is the tax a company pays. The standard CIT payment is 20 percent of assessable income, however, on large investments foreign firms have been known to receive tax breaks. This tax is paid yearly though firms can make payments quarterly.

Getting help opening a hotel in Vietnam

There are a broad range of tax agents, lawyers, market research firms, human resource professionals, and all-in-one consultancies in Vietnam that can assist entrepreneurs in opening a hotel in Vietnam→Let us connect you with a market entry expert.

For up-to-date information on what is happening in Vietnam’s food and beverage sector at any given time, hospitality business owners should also make sure to subscribe to the-shiv.

Last updated

• June 11, 2024: Added section on employee entitlements and benefits in Vietnam.
• July 2, 2024: Updated minimum wage.