1. Can foreigners open a coffee shop in Da Nang?

Upon the Schedule of Specific Commitments in Services WTO,  food service (CPC 642) and beverage service (CPC 643) are fully opened to foreign investment. In other words, there are no remaining restrictions on foreign investment in these services.

Therefore, foreigners are fully allowed to establish a 100% foreign-owned enterprise to open a coffee shop anywhere in Vietnam, including Da Nang.

2. Forms of opening a coffee shop in Da Nang

To open a coffee shop in Vietnam, specifically in Da Nang, foreign investors can choose the types of enterprises according to the provisions of the Law on Enterprises of Vietnam. Below are the popular forms suitable for opening a coffee shop:

2.1. One-member limited liability Company (LLC)  

Characteristics: A foreign individual or entity can wholly own the charter capital of a business, with liability limited to the amount of capital contributed.

Advantages:

• Streamlined establishment procedures, ideal for individual investors.
• Complete authority over business decisions rests with the owner.
• Financial risks are confined to the contributed capital amount. 

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Disadvantages:

• Not allowed to issue share
• Difficulties in raising capital. A one-member LLC must convert into a multi-member LLC if it wishes to increase or decrease charter capital through capital transfer to another party or by admitting new members

Suitable for: Foreign entrepreneurs aiming to independently manage and operate a small to medium-scale coffee business in Vietnam’s dynamic market.

2.2. Limited liability company with two or more members (a multi-member LLC)

Characteristics: A business structure with 2 to 50 capital-contributing members, with liability limited to each member’s capital contribution.

Advantages:

• Well-suited for partnerships with other parties (which may include Vietnamese or foreign partners).
• Distribution of financial risks and operational responsibilities among members. 

Disadvantages:

• Not allowed to issue share
• Subject to stricter legal regulations compared to a partnership.
• Any increase or decrease in charter capital must be reported to the Business Registration Authority, accompanied by various documents and administrative procedures.

Suitable for: Foreign investors aiming to collaborate with Vietnamese partners to launch a coffee shop, harnessing local market insights and opportunities.

2.3. Joint stock company (JSC)

Characteristics: Minimum 3 shareholders (no maximum limit), charter capital is divided into shares. Shareholders are limited to the extent of their capital contribution.

Advantages:

• Easy to raise capital through issuing shares. 
• Flexible in transferring shares. 
• Suitable for large projects or plans to expand a chain of coffee shops. 

Disadvantages:

• The management and operation of a JSC can be complicated due to the potentially large number of shareholders, many of whom may not know each other and may even form opposing groups with conflicting interests.
• Business and financial confidentiality is limited, as the company is required to disclose and report information to its shareholders.
• Establishing and managing a JSC is more complex than other types of enterprises due to strict legal requirements, especially in terms of financial and accounting regulations.

Suitable for: Foreign investors planning to open a chain of coffee shops or raise capital from many sources.

2.4. Partnership company

Characteristics: Have at least 2 general partners (unlimited liability) and can have capital contributors (limited liability). 

Advantages: Combine financial resources and expertise of members.

Disadvantages: Less popular with foreigners due to unlimited liability of general partners. 

Suitable: Rarely chosen to open a coffee shop due to high risk.

In addition to establishing their own company, foreigners can choose to buy an existing coffee shop to take over and develop the business. Buying an existing coffee shop is an attractive option for investors who want to quickly enter the market in Vietnam, especially in Da Nang. Foreigners can buy 100% of the capital to fully own and operate the coffee shop, or buy only a portion of the capital (buy separately) depending on their needs and investment strategy. When buying an existing coffee shop, it will bring benefits such as saving time and effort in building a brand, setting up facilities and applying for licenses. The coffee shop already has a certain number of regular customers and reputation, helping you start your business immediately.

3. What is the minimum capital to open a coffee shop in Da Nang?

According to Vietnamese law, there is no specific regulation on the minimum capital to open a coffee shop, allowing investors to be flexible in planning their business. Normally, the minimum capital to open a coffee shop in the Da Nang market is 30,000 USD. However, to determine the actual capital needed for the project, investors must carefully calculate all related costs to ensure the project’s feasibility and sufficient funding for its operations  These costs may include: renting premises, purchasing equipment, decorating the space, importing raw materials, business registration expenses and contingencies for unexpected costs. Investors need to reserve 20-30% of capital to handle unexpected costs such as repairs, increasing rental prices or marketing costs to attract customers.

4. What licenses are needed to open a coffee shop in Da Nang?

To open a coffee shop in Da Nang, foreign investors need to fully prepare the following important licenses:

• Investment Registration Certificate (IRC)
• Enterprise Registration Certificate (ERC)

5. Procedures for opening a coffee shop in Da Nang

5.1. Procedures for applying for an Investment Registration Certificate (IRC)

a. Competent authority: Department of Finance

b. Required dossiers:

• Document requesting to implement an investment project, including a commitment to bear all costs and risks if the project is not approved.

• Documents on legal status of investors.

• Documents proving the financial capacity of the investor.
• Investment project proposal. In case the construction law stipulates that a pre-feasibility study report must be prepared, the investor may submit a pre-feasibility study report instead of the investment project proposal.
• Land use demand proposal. In case the investment project does not request the State to allocate land, lease land, or allow change of land use purpose, it must submit a copy of the land use rights document or other document determining the right to use the location to implement the investment project.

• Explanation of technology used in investment projects for projects requiring technology appraisal and consultation according to regulations of law on technology transfer.

• Other documents related to the investment project, conditions and capacity requirements of the investor as prescribed by law (if any).

c. Procedures

• Step 1: Submitting dossiers

Investors submit 01 set of documents requesting the issuance of an Investment Registration Certificate (IRC) to the One-Stop Service Division (Reception and Result Delivery Section) of the Department of Finance of the province or city where the investment project is to be implemented.

• Step 2: Receiving dossiers

The officer receives and checks the legal validity of the application dossiers:

If the application is valid, a Receipt is issued to the applicant;

If the application is incomplete or invalid, the officer is responsible for providing guidance so that the investor can revise and resubmit the documents in a timely manner.

• Step 3: Notification of results

The Department of Finance shall review the dossier and issue an Investment Registration Certificate (IRC) to the investor within 15 days from the date of receipt of a valid dossier when the project fully meets the provisions of law on: industry, location, urban planning, market access conditions, etc.

5.2. Procedures for applying for an Enterprise Registration Certificate

a. Competent authority: Business Registration Office - Department of Finance

b. Required documents include the following:

• Business registration application

• Company charter

• List of members/List of founding shareholders and shareholders who are foreign investors

• Copy of legal documents of individual/organization
• Certificate of investment registration for foreign investors

Note: Certificate of business registration or equivalent documents must be legalized for organization members

c. Procedures

• Step 1: Submitting dossiers

After receiving the Investment Registration Certificate, the investor submits 01 set of dossiers requesting the issuance of a Enterprise Registration Certificate to the Business Registration Office - Department of Finance where the enterprise is headquartered.

• Step 2: Receiving and returning results

Within 03 working days from the date of receipt of the dossier, the Business Registration Office (BRO) shall be responsible for reviewing the validity of the business registration dossier and granting the ERC; in case the dossier is invalid, the BRO shall notify in writing the contents that need to be amended or supplemented to the business founder. In case of refusal to register the business, it shall notify in writing the business founder and state the reasons.

• Step 3: Carrrying out post-establishment procedures

After being granted the Enterprise Registration Certificate, the investor must carry out the following post-establishment procedures:

• Engraving the company seal;
• Preparing and displaying the company signboard at the registered office address;
• Registering for a digital signature certificate;
• Purchasing and issuing electronic invoices;
• Registering a corporate bank account;
• Submiting initial tax declarations.

6. Where to find reputable legal consulting services to open a coffee shop in Da Nang?

Compared to domestic investors, the legal procedures and requirements for foreign investors when opening a coffee shop in Da Nang are often more complicated and require more steps, which can easily cause many people to encounter obstacles during the implementation process. In order to accompany and support foreign investors to overcome these barriers, Phong & Partners is proud to provide professional legal services, with in-depth knowledge and practical experience in consulting on opening a coffee shop in Da Nang. Foreign investors can explore other legal services of Phong & Partners at: www.phong-partners.com.

6.1. Legal advice package:

• Consulting on conditions, choosing investment forms and locations; investment incentives, tax policies, labor laws, etc.

• Consulting, preparing investment projects and carrying out investment registration procedures in Vietnam.
• Consulting on legal issues throughout the project implementation and operation process.
• Consulting on procedures for establishing companies, establishing representative offices and branches of foreign companies in Vietnam.

• Consulting on all other issues when establishing a company in Vietnam.

6.2. Procedure package:

• Preparing all documents.

• Guiding clients to prepare necessary documents.

• Submitting investment registration and business registration dossiers to competent authorities.
• Carrying out procedures to apply for sub-licenses for each conditional business line if necessary.

• And many other legal procedures.

When seeking to invest in the Vietnamese market, foreign investors need a lawyer to be your companion in this unfamiliar market to avoid legal risks and unnecessary losses.

​7. Frequently asked questions

​a. What should foreign investors know before investing in vietnam?

Read more: https://phong-partners.com/en/what-should-foreign-investors-know-before-investing-in-vietnam

b. How to open a restaurant in Da Nang?

Read more: https://phong-partners.com/en/how-to-open-a-restaurant-in-da-nang

c. How to establish a sports center in Vietnam?

Read more: https://phong-partners.com/en/how-to-establish-a-sports-center-in-vietnam