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This study describes how businesses have emerged through ethnic tourism development in Lao Chai Commune in the Sa Pa District, Vietnam. In addition to peddling, three types of shops have been established; craft shops, grocery stores and restaurants. While the dominant economic development perspective postulates that ethnic minorities fall into a subjugated position when ethnic tourism business develops, this study identified that the Hmong (an ethnic minority), and the Kinh (the ethnic majority) have established a mutually dependent relationship in which there is no domination/subjugation elements. Hmong can keep their dominant status in the community because they maintain political, material and cultural resources of Hmong based on subsistent agriculture. The bonding social capital works to limit outsiders’ access to and grasp of these resources for tourism businesses. Kinh establish tourism businesses by utilizing bonding and bridging social capitals. Kinh grocery owners utilize a bonding social capital to acquire merchandize and information. Without relying on a Kinh wholesaler, it is difficult to keep their business in a foreign community. Kinh-teacher restaurant owners developed a bridging social capital by interacting with Hmong on school matters. This capital was influential to acquire a premier plot of land for building restaurants as well as to get local customers. Self-claimed Kinh restaurant owners utilize both bonding and bridging social capitals. Bonding social capital is important for constructing restaurants and getting local customers, bridging social capital is critical for finance and business skills. Key Words: bonding social capital, bridging social capital, ethnic tourism, tourism businesses