How to start a travel agency in Vietnam is an increasingly attractive prospect as the nation’s tourism sector experiences a massive resurgence, reaching nearly 18 million visitors annually. While Vietnam is open to foreign investment, the tourism industry is governed by strict “conditional” business regulations under the Law on Tourism 2017. Foreign investors must navigate specific ownership restrictions, mandatory bank deposits, and professional qualification standards to successfully tap into this vibrant Southeast Asian market.
1. Legal framework for foreign ownership
According to the WTO Schedule of Specific Commitments and the Law on Tourism 2017, foreign investors are permitted to enter the travel sector, but with specific boundaries. Unlike other industries, a 100% foreign-owned model is often restricted in scope depending on international treaties.
The most common and effective entry strategy is the Joint Venture (JV) model. In this setup:
- Partnership Requirement: Foreigners must partner with a Vietnamese company that is already licensed in the tourism industry.
- Capital Contribution: Currently, there is no strict cap on the foreign ownership ratio within the joint venture, but the partner must be a local entity.
- Business Scope: Foreign-invested travel agencies are primarily permitted to provide International Travel Services for Inbound Tourists (bringing foreigners to Vietnam).
- Outbound Restrictions: Generally, foreign-invested firms are prohibited from organizing outbound tours for Vietnamese citizens traveling abroad, a measure designed to protect domestic business interests.
2. Mandatory financial and personnel requirements
Before you can apply for an operating license, your business must meet specific “hard” conditions regarding financial security and professional expertise. These requirements ensure that the agency has the capacity to compensate travelers in case of disputes or emergencies.
To comply with the current legal standards, investors must satisfy the following:
- Bank Deposit (Escrow): You must make a mandatory deposit at a Vietnamese bank. The amounts are:
- VND 250,000,000 (approx. $10,500) for Inbound International Travel.
- VND 500,000,000 (approx. $21,000) for both Inbound and Outbound services (where permitted).
- Managerial Qualifications: The person in charge of travel services must hold a college degree (or higher) in a tourism-related major. If their degree is in another field, they must possess an International Tour Operation Certificate.
- Staffing: Most successful agencies hire at least three certified travel agents who hold valid foreign tour guide licenses to ensure service quality.
3. The multi-step licensing process
Understanding how to start a travel agency in vietnam requires following a precise administrative sequence. You cannot market tours or collect payments until all three primary certificates are secured.
The registration journey typically involves these steps:
- Investment Registration Certificate (IRC): The first step for foreign investors to get approval for their investment project from the Department of Planning and Investment (DPI).
- Enterprise Registration Certificate (ERC): This establishes the legal identity of the joint venture.
- International Tour Operation License: This is the critical “sub-license” issued by the Vietnam National Authority of Tourism (VNAT). To get this, you must submit proof of your bank deposit, the manager’s qualifications, and a detailed business plan including tour programs.
4. Operational success and market strategy
Once the legal foundation is laid, success in the Vietnamese market depends on local integration. While the law focuses on compliance, the market focuses on trust and quality.
Investors should consider these strategic factors:
- Local Expertise: Your Vietnamese partner provides more than just a legal bridge; they offer insights into local weather, customs, and relationships with vendors (hotels, transport, etc.).
- Niche Markets: Many foreign agencies find success by specializing in Adventure Tourism, Luxury Vacations, or Cultural Heritage Tours in locations like Ha Long Bay, Da Nang, or Sapa.
- Technology Integration: Utilizing online booking platforms and social media is essential, as a significant portion of international tourists now book experiences digitally.
As you plan your budget, remember that “can foreigners start a business in vietnam” in tourism also involves ongoing costs like office domicile maintenance, annual business license taxes, and the recruitment of high-quality, multilingual Vietnamese guides.
In summary, how to start a travel agency in vietnam involves a careful balance between international marketing expertise and local legal compliance. By securing the mandatory bank deposit starting at VND 250 million and forming a strategic joint venture with a qualified local partner, you can legally navigate the complex landscape of the Law on Tourism. With a commitment to sustainable practices and professional service, your agency can thrive in one of the world’s most dynamic travel destinations.
For expert guidance and a seamless licensing process, contact Tica Trustlegal. We specialize in IRC/ERC applications and specialized International Tour Operation Licenses to help your tourism venture reach new horizons.
5. FAQs: How to start a travel agency in Vietnam
1. Can a foreign-invested travel agency apply for an e-visa or physical visa on behalf of their international clients?
Yes. Under the Law on Entry, Exit, Transit, and Residence of Foreigners, once your joint venture has obtained the International Tour Operation License and a registered digital signature, you can act as an inviting/guaranteeing entity. This allows you to process visa approval letters or support e-visa applications for your inbound tourists through the Vietnam Immigration Department’s portal.
2. Is it mandatory for the mandatory bank deposit (escrow) to be maintained in VND, or can it be in USD?
According to Circular 06/2017/TT-NHNN, the deposit must be made and maintained in Vietnamese Dong (VND). Even if your initial investment capital is in USD, it must be converted and frozen in a dedicated VND account at a licensed commercial bank operating in Vietnam. The bank will then issue a “Certificate of Deposit for Travel Services Business” which is a compulsory document for your license application with VNAT.
3. What are the specific requirements for “degree recognition” if the manager’s tourism degree was obtained outside of Vietnam?
If the person in charge holds a foreign degree, it must undergo Consular Legalization in the country of origin and then be translated into Vietnamese with notarization. Furthermore, you must apply for a Diploma Recognition Certificate from the Quality Control Department under the Ministry of Education and Training (MOET) in Vietnam to confirm that the foreign qualification is equivalent to the Vietnamese standards required by the Law on Tourism.
4. Are there any restrictions on the physical branding and signage for a foreign-invested travel agency office?
Yes. Your office signage must comply with the Law on Advertising. The sign must display the full official name of the joint venture as written in the ERC. While you can use an English trade name, it must be positioned below the Vietnamese name and the font size of the English text cannot exceed three-quarters of the Vietnamese text size. Additionally, the International Tour Operation License number should be clearly visible at the transaction office.
5. If the joint venture changes its foreign partner or ownership ratio, does the International Tour Operation License remain valid?
The license remains valid; however, you are legally required to perform an adjustment procedure. First, you must update the IRC and ERC to reflect the change in investors. Within 15 days of the change, you must submit a written report and a dossier to the Vietnam National Authority of Tourism (VNAT) to update the information on your International Tour Operation License. Failure to report changes in ownership can lead to administrative fines or license suspension.
