Establish foreign-owned advertisement company

Advertising is a potential business sector which is developing positively in Vietnam market, especially when other business such as manufacturing and providing services are growing rapidly in the crowded and young economy of Vietnam. In the recent years, foreign direct investment in Vietnam has been increasing stronger, especially in services. Many foreign investors pay a huge attention to advertising service. However, in accordance with the Law No. 03/2016/QH14, advertising service is a conditional business sectors, which means in order to run business in this field, a company shall satisfy all the regulated conditions in the laws. Especially for foreign investors, besides satisfying general conditions, they have to comply with investment methods as well as the maximum foreign capital contribution in the company. To give our Clients a hand in avoiding troubles and difficulties when establishing foreign-owned advertisement company in Vietnam, Viet An Law Firm collect and provide our Clients some regulations and notices as follows:

• The Schedule of Specific Commitments in Services of Vietnam in WTO;
• The Law on Enterprise 2014;
• The Law on Investment 2014;
• The Law on Advertising 2012;
• Decree 181/2013/NĐ-CP providing detailed regulations on some articles of the Law on Advertising;
• Other relating regulations.

In accordance with the Schedule of Specific Commitments in Services of Vietnam in WTO, advertising service’s CPC code is CPC 871. This Schedule and Article 40 of the Law on Advertising 2012 also regulate that foreign organizations, individuals are allowed to cooperate with Vietnamese advertising providers to run business in the two following forms:

• Joint venture;
• Signing business corporation contract.

Therefore, foreign investors are not able to establish a 100% foreign-owned company in order to provide advertising services in Vietnam. They have to corporate with Vietnamese companies, individuals who are allowed to provide advertising services in Vietnam. According to the Schedule of Specific Commitments in Services of Vietnam, from 1^st January 2009, the maximum foreign capital contribution in the joint venture is not limited anymore but they have to assure that their foreign ownership is not up to 100%.

In order to establish foreign-owned advertisement company in Vietnam, foreign investors can choose one among two below options:

Option 1: Purchase shares/capital contributions in advertising providing Vietnamese company

The procedures for shares/capital contribution purchase are:

Step 1: Foreign investors register to contribute capital, purchase shares/capital contributions to the company.

Application includes:

• Application for capital contribution, shares/capital contributions purchase indicating: the information of the target company, the foreign capital contribution after completing the procedures;
• Copies of the ID or passport of each individual investor; copies of Establishment Certificate or equivalent papers confirming the legal status of each investor who is an organization.

Submission place: The Department of Planning and Investment.

The process: If the capital contribution, shares purchase, capital contribution purchase of foreign investors comply with the regulations on investment forms and foreign capital contribution, within 15 days from the date of receipt of the valid application, the Department of Planning and Investment will grant a written announcement. If the application does not satisfies conditions, the Department of Planning and Investment will grant a written announcement providing reasons and explanation.

Step 2: Transfer the shares, capital contributions and change the shareholders or members of the company.

Option 2: Foreign investors and Vietnamese advertising providers establish a joint venture:

Notice: In accordance with the Schedule of Specific Commitment in Services of Vietnam in WTO and clause 1 Article 40 of the Law on Advertising, Vietnamese partners must be registered juridical entities providing advertising services.

Step 1: Foreign investors apply for the Investment Registration Certificate

An application includes:

• A written request for permission for project execution;
• Individual investors: copies of ID or passport of each individual;
• Organization investors: copies of Establishment Certificate or equivalent paper confirming the legal status;
• Project proposal;
• Copies of financial statements in the current 02 years or financial support commitment of the parent company or financial institutions; guarantee for investors’ financial capacity, description of investors’ financial capacity;
• Land use demand. If the project does not use land allocated or leased by the State or does not require the State to change land use purpose, the copies of the lease agreement or equivalent papers proving that investors have rights to use the location shall be submitted;
• If the project use any technology in the List of technologies restricted from transfer, investors have to submit the explanation on technology transfer.

Submit the application at: The Department of Planning and Investment.

The process: Within 15 days from the receipt date of the valid application, the Department of Planning and Investment will grant the Investment Registration Certificate to foreign investors. If the Department of Planning and Investment refuse to grant, they will respond in notices and explain the reasons.

Step 2: Establish foreign-owned advertisement company in Vietnam

Apply for the Business Registration Certificate:

An application includes:

• A written request for business registration;
• The Articles of Associates;
• The list of members of the multi-member limited liability company or the list of partners of partnership;
• Notarized copies of ID or valid passport of each individual member; notarized copies of the Business Registration Certificate/Establishment Certificate of each organization member; notarized copies of ID or valid passport of each legal representative of each organization;
• Power of attorney (Clients grant to Viet An);
• Certificate of Investment Registration of foreign investors.

Submission place: The Department of Planning and Investment.

Duration: 03 – 06 working days.

Announce the business registration contents:

• Business registration information must be announced publicly on the National Portal of Business Registration within 30 days from the date of issuance of the Business Registration Certificate. The contents of the announcement are all the information stated in the Business Registration Certificate.
• Notice: In accordance with Clause 1 Article 26 of the Decree 50/2016/NĐ-CP, if the company does not announce or lately announce the business registration information on National Portal of Business Registration, they are fined an amount of money from 1.000.000 VND to 2.000.000 VND.

Engrave the seal and publish the seal sample:

• The company can authorized Viet An Law Firm or can engrave the seal by itself then announce the seal sample to the Department of Planning and Investment. The company is allowed to decide about the appearance, quantity and the contents of the deal but it must contain the name and the code of the company.

Goods and services banned from advertising:

• Cigarettes;
• Wine that contains 150 alcohol or above;
• Dairy being breast milk substitute for children under 24 months old, dietary supplements for children under 06 months old; artificial feeding bottles and pacifiers;
• Prescription drugs, non-prescription drugs recommended by competent State agencies to use restrictively or under the doctor’s supervision;
• Pornographic products;
• Shotguns and cartridges, sporting weapons and products that might incite violence;
• Other products, goods and services banned from advertising specified by the Government depending on the actual requirements.

Foreign investment services at Viet An Law Firm:

• Consult about conditions of each business sector for foreign investors in Vietnam;
• Consult about the process, the procedures relating to foreign investment in Vietnam;
• Prepare, draft the application and perform the procedures at state agencies when authorized by Clients;
• Consult about after-establishing issues such as: tax, labor, contracts, social insurance…

Foreign investors who need to search for Vietnam’s regulations or need advice on establishment of foreign-owned advertisement company in Vietnam and other regulations relating to investment, company, commerce in Vietnam, please feel free to contact Viet An Law Firm to get more detailed advices!