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Regulations on escrow for the tourism service business in Vietnam

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When operating or investing in the tourism service business, it is important to follow the regulations on the issue. In this article, LSX will give you an introduction to the regulations on escrow for the tourism service business in Vietnam.

  • 2017 Law on Tourism

Margin level and deposit method

Accordingly, escrow or margin deposit is a form of term bank deposit; or without term of enterprises or organizations at the Bank providing deposit services. This is, indeed, a form of financial guarantee of organizations and enterprises for banks. Hence the regulations, to set up a travel business, when doing the procedures, the business will have to make a deposit at the bank.

  • Deposit level for domestic travel services: 100,000,000 (one hundred million) VND.
  • Deposit level for international travel services:
    • Tourism services for international tourists to Vietnam: 250,000,000 (two hundred and fifty million) VND.
    • Business travel services for tourists going abroad: 500,000,000 (five hundred million) VND.
    • Business travel services for international tourists to Vietnam and tourists going abroad: 500,000,000 (five hundred million) VND.

Enterprises make deposits in Vietnam dong at commercial banks, cooperative banks, or branches of foreign banks established and operating in Vietnam; and enjoy interest rates as agreed upon between the enterprise and the deposit receiving bank following the provisions of law.

Issuance of Certificate of Deposit

When the enterprise requests to deposit the deposit to the account at the bank, the bank receives the deposit and the enterprise enters into the escrow contract. Thus, on the basis of the escrow contract, the escrow-receiving bank shall freeze the deposit amount deposited by the enterprise at the bank.

An escrow contract has the following main contents: Name, address, representative of the enterprise; name, address, representative of the bank; reason for deposit payment; deposit amount, deposit interest rates, paying interest on margin deposits; use of escrow money, deposit withdrawal, return the deposit, responsibilities of related parties and other agreements.

Then, after freezing the deposit, the deposit receiving bank shall issue a certificate of deposit for the business of travel services to the enterprise.

Management and use of escrow money

In case the tourists die, have accidents or risks; whose life is infringed must be brought back to their place of residence; otherwise emergency treatment that the enterprise is unable to arrange funds to deal with in a timely manner, the enterprise sends a request for the temporary release of the deposit to the travel service business license-issuing agency. Then, within 48 hours from the time of receiving the enterprise’s request, the travel service business license-granting agency shall consider it; and request the bank for the enterprise to deduct the escrow account to use or refuse.

Enterprises send a written request for deposit refund to the bank in the following cases:

  • There is a written notice from the business licensing agency that the enterprise is unable to provide travel services; or change the deposit receiving bank.
  • There is a document from the travel service business licensing agency on the refund of the deposit; after revoking the travel service business license.

Above are the answers to “Regulations on escrow for the tourism service business in Vietnam”. In case you have any questions, please contact Lawyer X for quick and best legal services: 0833102102.

Is there a penalty for a tour company that does not make a deposit?

The answer is yes. If the tour operator fails to make a deposit, ie fails to comply with the regulations on deposit for travel service business, it will be fined from VND 60,000,000 to VND 70,000,000.

When will the tour operator get a refund?

The tour operator is entitled to a refund of the deposit in two cases:
First, refund the deposit when the travel service business license is not granted and the deposit bank is changed.
Second, refund of deposit in case of revocation of travel service business license

Conclusion: So the above is Regulations on escrow for the tourism service business in Vietnam. Hopefully with this article can help you in life, please always follow and read our good articles on the website:

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