For the people of Vietnam, coffee shops selling Vietnamese coffee are one of the ultimate necessities of life. A 2023 survey revealed that at least 17% of people in Vietnam went out to eat daily, while over 28% went out 3-4 times a week. Of these, some would be coffee shop visits. The sweet and strong variety of a typical French-origin coffee brought to Vietnam in the colonial period has become a favourite globally.
Such is the craze that the coffee shop industry in Vietnam is booming. A 2022 report highlighted how Vietnam’s premier coffee shop chain Trung Nguyen Legend had a revenue of VND 6.2 trillion surpassing Starbucks and others. This could be attributed to the country’s huge coffee production, the second largest in the world, with over 31 million bags GBE (green bag equivalent) production in 2023-2024.
So, if you are thinking of establishing a business, this guide gives you a thorough insight into how to open a coffee shop in Vietnam.
Interested in Opening a Coffee Shop in Vietnam? Check out InCorp Vietnam’s Incorporation Services in Vietnam
Coffee Shop Industry in Vietnam
The rich culture and tradition of coffee coupled with the status of the second highest producer is driving the coffee shop industry in Vietnam. There are coffee shops in hotels, shopping malls, and recreation centers – everywhere coffee for business is the motto. This shows how the coffee industry has amassed over US$1 billion net worth.
As of 2022, the coffee business has generated US$5.9 billion in revenue with a forecast of 5.99% annual growth between 2022 and 2025. The coffee segment growth is linked to out-of-home consumption like restaurants, bars and cafes which would result in a 78% increase in spending and a 21% increase in volume consumption of this sector by 2025.
So, to know how to open a coffee shop in Vietnam, you must be aware of consumer behavior. As per Consumer Report Vietnam 2022, over 39% of people in the country buy coffee while the rest indulge in soft drinks (over 35%) and bubble tea (over 30%). Further imploring of the demographic of coffee drinkers revealed a coffee-drinking bias amongst men with 51% of them preferring it. All these statistics stand testimonial to the rise in cafe culture in Vietnam which resulted in more coffee shops in theatres, shopping malls and other recreational centers.
Detailed Legal Requirements to Open a Coffee Shop in Vietnam
To answer the question “What does it take to open a coffee shop in a country with such a vibrant coffee culture?” you must know the regulatory details coffee businesses follow in Vietnam. Like all other establishments, opening a coffee house also mandates some legal requirements like a Business Registration Certificate and a Food Safety certificate.
While the coffee shop industry in Vietnam is lucrative and booming, the market is not all rosy as seen in the closure of high-value brands like Mellower Coffee from China, and US brands like the Coffee Bean & Tea Leaf, Gloria Jean’s, and New York Dessert Coffee. Most foreign companies fail to penetrate a price-sensitive market which is hugely dependent on customer preferences.
The market is attractive enough to bring high revenue but it’s not for novices trying to figure out how to open a coffee shop in Vietnam. You need to have a thorough idea of how to get a business registration certificate either by applying directly if you are a local entity or via a Vietnamese company if you are a foreign entity. The process differs markedly in both scenarios but they require additional food safety certificates to conduct business.
Additionally, refer to the following departments for up-to-date information on opening a coffee house in Vietnam
- Vietnam’s Department of Planning and Investment: For detailed information on business registration, including forms and requirements.
- Vietnam’s General Department of Taxation: For information regarding tax code registration can be found on the General Department of Taxation’s website.
- Vietnam’s Ministry of Health: Details about obtaining a Food Safety and Hygiene Certificate are provided by the Ministry of Health.
- Vietnam’s Ministry of Public Security: For fire safety regulations and certification, the Ministry of Public Security provides guidelines and requirements.
- Local People’s Committees: These local administrative bodies provide information and guidelines on environmental impact assessments and other local regulatory requirements.
Establish a Legal Entity for Your Coffee Shop
The first step of knowing how to open a coffee shop in Vietnam starts with fulfilling the coffee shop legal requirements and establishing the legal entity of your business. This follows a rather complex procedure if you are a foreigner than a local as you have to purchase shares in a Vietnamese company or choose to operate as an overseas company.
Foreign companies trying to open coffee shops in Vietnam have to do the following:
- Apply for an Investment Registration Certificate (IRC)
- Apply for a Business Registration Certificate (ERC) once you get the IRC
If the company has already purchased shares or capital in a Vietnamese company they can directly go for the Business Registration certificate like local entities. However, they still need to register their shares or capital contribution at the Department of Planning and Investment as it establishes their investment in the Vietnamese company. The foreign business also has to change members and shareholders as per the Law on Enterprises once they get the approval.
The Enterprise Registration Certificate (ERC) needs to have your business name, address, type, scope, information about legal representatives, and charter capital along with the type of entity – Limited Liability Companies (LLCs) and Joint Stock Companies (JSCs), you want to establish.
Read More: Doing Business in Vietnam: Role of Investors in Business and 4 Types of Business Models
Obtain the Food Safety Certification
When it comes to learning how to open a coffee shop in Vietnam it is critical to know about food safety compliance. All coffee shops in the country must have a food safety certificate as any kind of catering service like food and beverage has a direct effect on the health of the customers.
To obtain this certificate, a coffee shop must submit the following documents to the Department of Health:
- A copy of the business or enterprise registration certificate (ERC)
- A written application for the food safety certificate
- A description of devices, equipment and facilities that the shop will use
- Health certificates of employees and owners of the shop issued by district clinics
- Proof that the owner and the employees are trained in food safety by competent authorities and can directly handle food items.
The Health Department either issues a food safety certificate to the establishment or informs about the rejection in a detailed document, within 15 days of the application.
Take Care of Other Legal Requirements
The coffee shop legal requirements in Vietnam don’t end in business registration and food safety clearance, you have to fulfil other critical areas of compliance. This includes
- Declaring that the initial taxes of the shop like the licence tax and annual tax have been cleared.
- Contracts have been signed with the suppliers for the procurement of raw materials
- Lease agreements for the establishment
- Recruitment and hiring people for the coffee shop
- Commercial franchise of the shop
All these legal requirements not only ensure compliance but also that the enterprise knows how to sell coffee for business
Independent Coffee Shop vs. Opening a Franchise
Now, you might think you have got the answer to the “What does it take to open a coffee shop in Vietnam?” question, but that’s not the case. The coffee shop business in the country is as deeply rooted as the coffee culture. Hence, you need to determine what’s economically feasible for you to survive – an independent coffee shop or a franchise coffee shop.
Here’s a pros and cons of each for you to decide:
Tips for Achieving Success After Launching Your Coffee Shop
Now that you know how to open a coffee shop in Vietnam, let’s take you through the process of making it a success. Running a shop isn’t easy, especially in the competitive coffee shop industry in Vietnam. You need to optimize the potential of the business by developing a long-term relationship with the customers which can be achieved in the following ways.
- Eliminate inaccuracies in sales: Use a point-of-sale (POS) system for the smooth running of the coffee shop as its digital integration of hardware and software solutions ensures that all payments and sales are processed instantly at the point of purchase. This leaves little room for inaccuracies and mixed-up sales reports as everything is registered in the digital system instead of a cash register.
- Enhance ease of business & make operation changes: The POS system not only provides the customers the liberty of paying using different payment methods but also helps the owners to keep track of sales effortlessly. Overall, this enhances the ease of doing business as you can calculate profit margins by tallying the expenses and the sales, thereby helping in the planning of future operations changes.
- Monitoring the inventory: In addition to maintaining the finances, the POS system also takes care of the supplies with its inventory tracking feature. The real-time inventory data lets you know what you have in stock and what needs re-stocking.
- Tracking the productivity of the workers: The point-of-sale system can also monitor employee performances as it keeps records of their clock-in and clock-out times.
- Reducing the workload of the employees: Additionally, it can do all kinds of receipt-printing and report-making tasks, reducing the workload of the workers.
Apart from the POS system, there are some generic ways coffee shops in any country can be enhanced. This includes incorporating features that cater to the customers like discounts, loyalty programs, free WiFi, free biscuits or goodies with the coffee, and a corner to showcase their thoughts.
Read Related: Vietnam’s Coffee Export Market: Trends in Consumption and the Coffee Shop Industry for Investors
How InCorp Vietnam can Assist?
From what we have seen in the above sections, opening a coffee house in Vietnam is a daunting task. InCorp Vietnam can guide you through the process of business registration, food safety clearance and other legal requirements that you need to fulfil to set up a coffee shop.
Many foreign investors have set up coffee shops in the country through the able guidance of our consultants who ensure your establishment is registered properly and functions optimally with the necessary safety and tax compliance. Contact us for assistance, we will get back to you in no time.
We made the most detailed step-by-step guide for Company Incorporation in Vietnam for investors, now available as an interactive checklist:
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