[2025 update] Procedures for Establishing a Foreign-Invested Spa and Massage Company in Vietnam

I. Legal Basis:

- Specific Commitments on Trade and Services WTO (GATS);

- Law on Investment No. 61/2020/QH14 dated June 17, 2020;

- Law on Enterprises No. 59/2020/QH14 dated June 17, 2020;

- Official Letter No. 579/KCB-PHCN&GĐ dated May 30, 2019, on the management of massage services by the Medical Examination and Treatment Management Department;

- Response from the Ministry of Planning and Investment regarding foreign-invested massage service business here;

- Decree No. 96/2016/ND-CP dated July 01, 2016, stipulating conditions on security and order for certain conditional investment and business lines;

- Decree No. 56/2023/ND-CP dated July 24, 2023, amending and supplementing Decree No. 96/2016/ND-CP dated July 01, 2016.

II. Scope of Massage Service Business in Vietnam:

According to Clause 5, Article 3 of Decree No. 96/2016/ND-CP dated July 01, 2016 ("Decree 96") on the definition of massage service business: "Massage service business includes: Using physical therapy methods for massage (massage), acupressure for human health."

According to the Explanatory Notes to the Central Product Classification ("CPC"), massage services are classified under CPC code 97029: Other beauty treatment services include: personal care, body care, hair removal, massage, except for therapeutic massage, ultraviolet and infrared ray treatment, sunbathing and other beauty treatment services.

Thus, the massage service business involves using physical therapy methods for massage and acupressure to serve human health.

III. Market Access Limitations for Massage Services:

Based on the response from the Ministry of Planning and Investment at https://baochinhphu.vn/dich-vu-massage-khong-thuoc-nganh-nghe-bi-han-che-dau-tu-102227319.htm, the "Massage service" sector is not specified in Vietnam's Schedule of Specific Commitments on Trade in Services under the WTO. However, there are no prohibitions or restrictions on foreign investors according to Article 6 of the Law on Investment 2014. Accordingly, if a foreign investor invests in the massage service business in Vietnam, after submitting the application, the licensing authority will seek relevant professional opinions for appraisal before deciding whether to approve or disapprove the foreign investor's project.

However, one of the fundamental principles of GATS upon Vietnam's accession to the WTO is "Most Favored Nation" (MFN), meaning that each member country must accord non-discriminatory treatment to goods and services originating from different WTO member countries.

Specifically, there is a very blurred line between the concept of "full authority" and "compliance with the fundamental principles of GATS," which managers must pay special attention to. Take the publishing service as an example. Since it does not appear in the Schedule of Specific Commitments on Services, Vietnam has "full authority" to close this market to foreign publishers. However, if Vietnam agrees to license a foreign publisher, the principle of "compliance with the fundamental principles of GATS" will immediately apply. As one of the fundamental principles of GATS is MFN (non-discrimination between members), Vietnam will have to license other foreign publishers if requested (according to page 8, book "Commitments on Services upon WTO Accession - Insider Commentary" - Ministry of Industry and Trade).

Thus, in the case where massage services (CPC 97029 - industry code: 9610) have been licensed to operate for a foreign investor who is a WTO member, Vietnam must also open this sector to investors from other countries based on the Most Favored Nation principle.

More importantly, depending on the nationality of the investor, it is possible to check the agreements signed between Vietnam and that country for more in-depth advice on market access limitations. Unlike the "choose" and "give" rule of Vietnam's Schedule of Specific Commitments on Trade in Services under the WTO, some new trade agreements such as the CPTPP are built on a "choose" and "leave" approach, meaning that the committing party will list all services with limited application to members. Apart from these restricted services, members are allowed to invest and do business in industries outside the listed restrictions.

IV. Investment Procedures for Foreign Investors in Vietnam:

According to the provisions from Article 21 to Article 28 of the Law on Investment 2020 regarding forms of investment in Vietnam, the following are included:

Foreign investors can choose the following forms of investment to conduct business activities in Vietnam:

1. Investment in establishing economic organizations: a) Foreign investors establishing economic organizations must meet the market access conditions for foreign investors stipulated in Article 9 of this Law; b) Before establishing an economic organization, foreign investors must have an investment project and carry out the procedures for applying for and adjusting the Investment Registration Certificate, except for the case of establishing small and medium-sized innovative startups and innovative startup investment funds according to the law on supporting small and medium-sized enterprises.

From the date of being granted the Enterprise Registration Certificate or other legally equivalent documents, the economic organization established by the foreign investor is the investor implementing the investment project according to the Investment Registration Certificate.  

2. Investment in capital contribution, purchase of shares, purchase of capital contributions: The capital contribution, purchase of shares, or purchase of capital contributions by foreign investors in economic organizations must meet the following regulations and conditions: a) Market access conditions for foreign investors stipulated in Article 9 of the Law on Investment. b) Ensuring national defense and security according to the provisions of this Law; c) Provisions of the land law on conditions for receiving land use rights and conditions for land use in islands, border communes, wards, and towns, and coastal communes, wards, and towns.

3. Implementation of investment projects: Foreign investors conduct business activities through the implementation of investment projects in Vietnam.

4. Investment in the form of a BCC contract:

• BCC contracts signed between domestic investors shall comply with the provisions of civil law.
• BCC contracts signed between domestic investors and foreign investors or between foreign investors shall follow the procedures for applying for an Investment Registration Certificate as stipulated in Article 38 of the Law on Investment.
• The parties participating in the BCC contract shall establish a coordination board to implement the BCC contract. The functions, tasks, and powers of the coordination board shall be agreed upon by the parties.  

5. New forms of investment and types of economic organizations as prescribed by the Government: Foreign investors shall make investments in new types of economic organizations as prescribed by the Government.

VI. Conclusion:

Entering the massage service market in Vietnam with foreign investment requires thorough legal preparation because this sector has not been opened to foreign investors according to the Specific Commitments on Trade in Services WTO (GATS). DB Legal prides itself on being a reliable legal partner, ready to provide comprehensive consulting services, supporting investors throughout the process of company establishment, obtaining operating licenses, and resolving any arising legal issues.

 

Xem bài viết tiếng Việt tại đây.

한국어 기사 보려면 여기를 보세요.

The information contained in this article is general and intended only to provide information on legal regulations. DB Legal will not be responsible for any use or application of this information for any business purpose. For in-depth advice on specific cases, please contact us.

For more information: 

📞: +84 357 466 579

📧: contact@dblegal.vn

🌐Facebook:  DB Legal Vietnamese Fanpage or DB Legal English Fanpage 

🐦X(Twitter)

💼Linkedin

🎬Youtube