Food and eating are central to life in Vietnam–Vietnamese love food. It is at the heart of family gatherings and special events and local dishes are famous all around the world. 

This can make opening a restaurant in Vietnam for foreign firms or individuals tricky. Not only are there a number of technical and licensing requirements that need to be met, but Vietnam has also developed its own very distinct and unique food culture which can make penetrating Vietnam’s booming consumer class challenging.

Understanding the nuances of Vietnamese food culture and the complexities of business establishment procedures in advance of entering the market can, therefore, be crucial to the success of a new restaurant in Vietnam.

Vietnam’s food culture

For foreign firms or individuals looking to open a restaurant in Vietnam, there are quite a few different ways food is enjoyed in this burgeoning Southeast Asian nation.

Street-food in Vietnam

Street food is very popular in Vietnam. It can be very cheap with a bowl of noodle soup (pho) bought on the side of the road for as little as VND 40,000 (US$2). It’s common at lunchtime for small restaurants operating out the bottom floors of the homes of city dwellers to spread out onto the sidewalks selling all manner of cheap and tasty Vietnamese foods.

Foreign restaurateurs should keep in mind that these street food vendors often form a point of reference for value among Vietnamese consumers. Fast-food chain Subway, for example, had difficulty selling US$6 to US$7 sandwiches in Vietnam when local sandwiches (banh my) could be bought on the street for less than US$2.

Fine-dining in Vietnam

Despite the perceived value of street food, however, fine dining is becoming more popular in Vietnam. Rising incomes, coupled with a desire to flaunt their newly acquired wealth, has given high-end restaurants an opening in Vietnam and they appear to be doing well. 

Back in June, three restaurants in Hanoi and one in Ho Chi Minh City were among the first restaurants in Vietnam to be awarded a Michelin star. These restaurants charge diners much more than local street food vendors do, but they have still managed to survive and thrive–price is important but not the be-all and end-all. 

Western food in Vietnam

Whereas Vietnamese food is, obviously, much more popular in Vietnam, food from just about every country in the world can also be found in most mid-sized towns and cities. From burgers to souvlaki foreign foods definitely have a place in Vietnam.

There are also a number of big foreign fast-food restaurants currently operating in Vietnam. Though a number of big foreign restaurant brands have entered the market only to exit after just a few years–Auntie Annies, most recently, shut up shop back in June–many others have been successful. Mcdonald’s, for example, had 31 restaurants as of writing though it did take some time to take off. Pizza Hut and KFC also have locations all over Vietnam.

Establishment procedures for restaurants in Vietnam

Restaurants 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 restaurants in Vietnam

Establishing a wholly foreign-owned restaurant in Vietnam offers foreign investors complete control over their business’s operations. However, this approach typically involves higher costs and can be a more time-consuming process.

Specifically, foreign entrepreneurs interested in setting up a wholly foreign-owned company must apply for an Investment Registration Certificate (IRC), a step not required when partnering with a local entity.

The purpose of the IRC is essentially to ensure that foreign companies do not engage in business activities that fall under restricted or prohibited categories. The criteria for granting an IRC are stipulated in the Law on Investment, which also states that IRCs should ideally be issued within a timeframe ranging from 5 to 15 days. In practice, however, the processing time often extends to around 30 to 45 days.

Joint venture restaurants in Vietnam

When foreign entrepreneurs opt to collaborate with a local partner, they are not required to obtain an Investment Registration Certificate. Instead, the Vietnamese partner establishes the company, and the foreign investor buys a share. This approach can significantly reduce both the initial setup expenses and the time needed to establish a restaurant in Vietnam.

However, it’s important to note that joint ventures come with certain inherent risks. Differences in work ethics and management styles can potentially lead to workplace conflicts, especially in cross-cultural contexts. For instance, while it’s customary in Vietnam to impose financial penalties on employees for being late or using their phones during working hours, such practices are usually considered unacceptable in Western countries. Recognizing these subtle nuances in cross-cultural communication within a joint venture environment can be pivotal to the success of a business.

Restaurant franchises in Vietnam

Restaurant franchises in Vietnam are common. There are a number of restaurant chains spread out around the country–Huong Mai or Lottereia for example. Buying into a franchise is an option for foreign investors but foreigners 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 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 restaurant owners in Vietnam

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

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: Law on Entry, Exit, Transit, and Residence of Foreigners in Vietnam

Choosing a location for a restaurant in Vietnam

Choosing the right location for any business can be the difference between success and failure. Firms and individuals looking to establish a restaurant in Vietnam should consider the best market for their products and services. That said, future restaurateurs wherever they choose to establish themselves, will very likely have to sign up for a commercial lease. 

Market research

Market research is essential when choosing a location for a new restaurant in Vietnam. Given the enormous competition in Vietnam’s biggest cities and the propensity for consumers to frequent establishments closest to their home or place of work, the right location will vary greatly from one establishment to the next. As a result, offering location advice can be difficult.

That said, in both Hanoi and Ho Chi Minh City there are specific enclaves in which the bulk of foreigners live. In Hanoi that area is known as West Lake (Tay Ho) and in Ho Chi Minh City it’s District 1. Foreign restaurants may find these areas easier to penetrate with Western food. In other areas, restaurants may need to double down on products catering more to local tastes.

Commercial real estate rents in Vietnam

Rental costs can be a significant factor in choosing the right location and these will depend on a broad range of factors, however, the following ballpark figures for Hanoi and Ho Chi Minh City from CBRE may be useful as a rough guide as to what to expect.

Average rent, ground/first floor, per-square-metre

Commercial leases in Vietnam

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 restaurants in Vietnam

There are several key regulatory requirements that foreign entrepreneurs may need to satisfy when opening a restaurant in Vietnam. The three main regulations focus on food safety, liquor licensing, and the sale of tobacco products.

Getting a food safety certificate

With respect to the Law on Food Safety, before a new restaurant can be opened in Vietnam,  the proprietor must apply for a food safety certificate per Decree No. 15/2018/ND-CP. 

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.

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

A failure to adhere to the standards set out in the Law on Food Safety could result in administrative fines of up to VND 100 million (US$4,156).

Getting a liquor licence in Vietnam

Restaurants 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 restaurants 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 restaurants 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. 

Getting a licence to sell tobacco in Vietnam

If a restaurant wishes to sell tobacco products as well, it will need a separate licence. This is governed by Decree No: 67/2013/ND-CP with a series of amendments in subsequent decrees.

To obtain a licence to sell tobacco products in Vietnam, restaurateurs must apply for a licence from the Ministry of Industry and Trade. Their application should include:

• Application form for a licence to distribute tobacco products (there is no specific format for this outlined in the decree).
• A copy of the restaurant’s Enterprise Registration Certificate or Business Registration Certificate and Tax Code Certificate;
• A copy of a contract or agreement with a tobacco producer, distributor, or wholesaler.
• The business results of the enterprise if the business is applying for the licence to be reissued or amended.

As with liquor licences, an application for a licence to sell tobacco 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) per Circular 168/2016/TT-BTC. 

Hiring restaurant workers, wait staff in Vietnam

Entry-level restaurant workers and wait staff in restaurants in Vietnam are generally paid around minimum wage. Minimum wages in Vietnam are different for each of one of four key regions. These are outlined in Decree 38/2022/ND-CP. 

Regional minimum wages, current as of September 2023

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

Restaurant manager wages in Vietnam

Whereas entry-level staff are paid close to minimum wage, managers of restaurants in Vietnam can earn substantially more. According to online employment services provider CareerBuilder.vn, the average wage of a restaurant manager is around VND 13.8 million (US$569).

See also: Average Salary in Vietnam 2024: Quick Guide 

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 2022, Vietnam remained on the Office of the US Trade Representative’s Special 301 Report which labelled IP enforcement as ‘a serious challenge’ for the burgeoning nation. 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 restaurant’s intellectual property in Vietnam

With respect to establishing a restaurant, there are a number of items of intellectual property that restaurateurs 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.

Marketing a restaurant in Vietnam

Restaurants in Vietnam can be marketed much like they can anywhere else in the world, however, there are a couple of small nuances to Vietnam’s communications landscape that foreign restaurateurs should be aware of.

A social media presence is essential

Traditional media in Vietnam is heavily regulated (see: Vietnam News Media Regulations: An Overview) and this has led to social media taking an increasingly more important role in Vietnamese society.

Not just in restaurants in Vietnam, but businesses across the board need a social media presence. Many restaurants in Hanoi and Ho Chi Minh City don’t have websites but rather publish their menus and manage customer enquiries via their Facebook pages. New restaurants should establish themselves on social media quickly and pay particular attention to these channels.

Utilising foodie influencers in Vietnam can pay big dividends

Food influencers have attracted huge audiences and can make or break a restaurant with one good or bad review. Instagram, Facebook, and TikTok are filled with foodies tasting a broad range of dishes and reviewing restaurants from the most basic street food stalls to the classiest fine dining establishments. Getting the right local influencers on board can make a huge impact on a restaurant’s reputation and subsequently sales.

Photos are almost as important as the food, sometimes more

In Vietnam, sharing photographs online is a national pastime. Vietnamese will spend a good part of their dining experience photographing themselves, their food, and the establishment itself. Ensuring this obsession is catered to with good lighting, excellent presentation, and a unique interior decor will likely see these photographs and a restaurant’s brand shared widely online.

Fees and taxes for restaurants in Vietnam

New businesses will need to register with the General Department of Taxation to pay their taxes and ensure they are tax-compliant. There are also several recurring fees and taxes that new restaurant owners in Vietnam 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 specifics of the VAT are outlined in Law No. 13/2008/QH12. Broadly, this 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)

PIT 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. The PIT is governed by Law No. 04/2007/QH12.

Corporate Income Tax (CIT)

CIT 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. The CIT is governed by Law No. 14/2008/QH12

Getting help opening a restaurant 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 establishing a business in Vietnam. Let us connect you with an expert.

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