100% Foreign-Owned Company in Accommodation Services in Vietnam A Comprehensive Legal Guide

100% Foreign-Owned Company in Accommodation Services in Vietnam A Comprehensive Legal Guide

Vietnam tourism and hospitality sector has experienced strong growth over the past decade, driven by increasing international travel, a rising middle class, and continuous infrastructure development. As a result, many foreign investors are exploring opportunities to establish businesses in the accommodation sector, including hotels, serviced apartments, and tourist lodging facilities. Understanding the legal framework for setting up a 100% foreign-owned company in accommodation services in Vietnam is therefore essential for investors seeking long-term and compliant operations. In case you need advice, please contact Apolo Lawyers via email at contact@apolo.com.vn or Hotline (+84) 903 419 479 for the best advice and support. 1. Legal Framework for Foreign Investment in Accommodation Services Vietnam

Foreign investment in the accommodation sector is permitted under Vietnamese law and international commitments to which Vietnam is a party, including WTO commitments and various free trade agreements. Accommodation services, such as hotel operation and tourist lodging, are classified as conditional business lines, meaning that foreign investors must satisfy specific legal and operational requirements.

Under Vietnamese regulations, foreign investors may establish a company with 100% foreign ownership to conduct accommodation service business, provided that the investment project complies with zoning regulations, tourism laws, and local development planning. While Vietnam does not impose a mandatory joint venture requirement for accommodation services, investors must still meet conditions relating to service standards, fire safety, security, and environmental protection.

100% Foreign-Owned Company in Accommodation Services in Vietnam A Comprehensive Legal Guide

1. Investment Conditions and Business Scope for Foreign-Owned Hospitality Companies

To establish a foreign-owned hospitality company in Vietnam, investors must clearly define the scope of accommodation services in accordance with Vietnam business classification system. Accommodation services may include hotels, resorts, tourist villas, serviced apartments, and guesthouses, depending on the specific licensing and operational model.

In addition to business scope clarity, foreign investors must ensure that the proposed location is legally suitable for accommodation purposes. This includes compliance with land use regulations, construction permits, and local tourism development plans. In practice, authorities will closely examine whether the accommodation project aligns with local planning objectives, particularly in major cities and tourist destinations.

2. Procedures for Establishing a 100% Foreign-Owned Company

The process of establishing a foreign-invested company in Vietnam in the accommodation sector generally involves two main licensing stages. First, the foreign investor must obtain an Investment Registration Certificate, which approves the investment project and capital structure. This step focuses on evaluating the feasibility, scale, and legal compliance of the proposed accommodation business.

After obtaining the investment approval, the investor proceeds with the Enterprise Registration Certificate to formally establish the legal entity in Vietnam. At this stage, the company is officially recognized and may carry out preparatory activities. However, the company is not yet permitted to operate accommodation services until all specialized sub-licenses and operational conditions are satisfied.

3. Hotel Business License and Operational Requirements

Operating accommodation services requires compliance with specialized regulations under tourism and hospitality laws. A hotel business license for foreign investors in Vietnam is not a single standalone license but rather a combination of statutory conditions that must be fulfilled before commencing operations.

These conditions typically include meeting minimum standards for accommodation facilities, ensuring fire prevention and fighting compliance, maintaining public security and order, and registering accommodation activities with local authorities. Depending on the scale and classification of the accommodation establishment, additional inspections or certifications may be required by tourism authorities.

Only after satisfying these operational requirements may the foreign-owned company legally provide accommodation services to guests.

100% Foreign-Owned Company in Accommodation Services in Vietnam A Comprehensive Legal Guide

4. Key Legal Considerations and Practical Recommendations

While Vietnam allows 100% foreign ownership in accommodation services, practical challenges often arise during implementation. Issues related to land use rights, construction compliance, and coordination between multiple authorities can significantly affect project timelines.

Foreign investors are therefore advised to conduct thorough legal due diligence before committing capital, particularly regarding land status, licensing feasibility, and local planning constraints. Professional legal support can assist investors in structuring the investment, preparing compliant dossiers, and navigating licensing procedures efficiently, ensuring that the accommodation business operates lawfully and sustainably in Vietnam.

Establishing a 100% foreign-owned company in accommodation services in Vietnam offers attractive opportunities in a rapidly growing hospitality market. However, due to the conditional nature of the business line and the complexity of investment and operational regulations, careful legal planning is essential. With proper preparation and expert guidance, foreign investors can successfully enter Vietnam accommodation sector and build a compliant, long-term presence.

Apolo Lawyers provides:

• Comprehensive legal compliance reviews tailored to each business sector.

• Ongoing corporate secretarial and compliance services, ensuring timely filings and regulatory updates.

• Labor, and regulatory advisory to help businesses minimize legal risks.

• Strategic legal support for foreign-invested enterprises, including post-licensing compliance.

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