Promotional Activity Notification Regime in Vietnam

When businesses want to promote products, services, or a brand to consumers or bring new products and services to the market, they often choose the form of product promotion. Product promotion activities seem to be “gifts” but in fact, it is an extremely effective advertising channel when launching a new product or service to the market or wanting the market to focus on and orient towards the products and brands of their unit. In the article below, we will present the promotional activity notification regime in Vietnam.

Vietnamese legal documents related to promotional notification procedures

• Commercial Law 2005 (Article 88 to Article 101);
• Decree 81/2018/ND-CP detailing the Commercial Law on trade promotion activities (Article 2 to Article 22, entire Chapter II of Decree No. 81/2018/ND-CP), as amended by Decree No. 128/2024/ND-CP.

Promotional forms must be notified under Vietnamese law

Promotion is a commercial promotion activity of a trader to promote the purchase and sale of goods and the provision of services by giving customers certain benefits. The trader carries out administrative procedures to notify the promotion of all Departments of Industry and Trade where the promotion is organized (in the area where the promotion is implemented) before implementing the promotion program in the following form:

• Sale of goods or provision of services together with promotional contest entry form for selecting the prize winner according to rules and prizes already announced;
• Organization of frequent customer programs as the basis for awarding customers according to the quantity or value of goods or services purchased in the forms of customer cards or coupons acknowledging the goods or service purchase;

Exceptions that do not require promotional notification

When a trader conducts a promotion in the above forms but falls into one of the following two cases, the trader does not have to carry out administrative procedures to notify the implementation of the promotion:

• Traders carry out promotional programs under regulations with a total value of prizes and gifts under 100 million VND.
• Traders only conduct sales and promotions through e-commerce trading floors and online promotional websites.

Example: The first 10 orders over 100,000 VND will receive a thermos worth 90,000 VND. Thus, the total value of the gift is 90,000 x 10 = 90 million VND, which means it is under 100 million VND and does not require a promotional notification.

Additionally, under Decree 128/2024/ND-CP, hich takes effect from December 1, 2024, has abolished several forms of non-promotional sales promotion as prescribed in Decree 81/2018/ND-CP, including:

• Organization for customers to participate in cultural, artistic, and entertainment programs and other events for promotional purposes.
• Provision of sample goods or services free of charge;
• Gifting of goods or services;
• Sale of goods or provision of services at discounted prices during the announced period of sales promotion;
• Sale of goods or provision of services together with coupons;

It can be seen that these are small-scale promotions, or those that are frequent and continuous, which would be inconvenient if management regulations were set up in the form of notification to the management agency. Instead, the Government creates conditions to promote trade through these promotional activities if the value generated by the promotional activities does not greatly affect the competitiveness of businesses in the industry or the market.

How to distinguish between promotional activity notification and registration?

Promotional notification and promotional registration are two administrative procedures to implement state management of promotional activities taking place in Vietnam. Determining which activity must be performed will depend on the form of promotion that the trader performs. When belonging to the group of promotional forms that must be notified according to the law (as listed above), the trader will consider the regulations related to the notification procedure (procedures, documents, submission location, costs, and related fees) to perform.

State Authority in promotional activity notification regime in Vietnam

For promotional notification procedures, there is only one state management agency, the Department of Industry and Trade where the promotional activity is organized, that is responsible for receiving notification documents.

Applicants should distinguish this authority from the authority to receive promotional registration procedures (in case the Department of Industry and Trade and the Ministry of Industry and Trade have authority over each form of registered promotion).

Promotional application submission time in Vietnam Department of Industry and Trade

All procedures for state management of promotions are carried out before the program takes place. If registration must be confirmed before the promotion program is implemented, the Notice must also be sent to the Department of Industry and Trade at least 03 working days before the promotion is implemented.

Dossier components to promotion notification in Vietnam

The promotional notification dossier includes only one document: Promotional notification according to Form No. 01, Decree No. 81/2018/ND-CP. The most important content of the Notification is information about the promotional program that the trader implements, which is also the content that the Department of Industry and Trade will publicize after the notification is duly received, including:

The number of documents in the promotional notification is much less than the promotional registration dossier, showing that this procedure is simpler and intended for simple promotional forms that have little impact on market competitiveness.

Processing time

Unlike the time limit for processing promotional registration dossiers, which is 05 working days from the date of receipt of the dossier, the promotional notification procedure does not specify a processing time limit. Because the nature of the procedure is notification, it does not require approval from the state agency to be implemented. However, in case the dossier is invalid or incomplete, the Department of Industry and Trade still has the right to request the applicant to amend or supplement or decide not to publicize information about the promotional program for invalid notifications.

Results received

Information about the promotional program that the trader has announced must be made public by the state management agency in appropriate forms (documents, electronic news pages, or other forms with equivalent effects) and the start time of the promotional program after submitting the promotional notification.

Obligation to make notification after the promotion ends

Traders do not have to pay the state budget if they do not promote all goods and services as in the case of promotions that must be registered.

Frequently Asked Questions

Does my company have to notify the promotion if it conducts a trial promotion for products under 100 million VND?

If the total promotional value for a promotion program is less than 100 million VND, your company does not have to carry out promotional activity notification regime procedures.

When notifying a promotion, is it necessary to have written approval from the Department of Industry and Trade?

No, only information about the promotional program that the trader has announced must be made public by the state management agency in appropriate forms (documents, electronic news pages, or other forms with equivalent effects) and the promotion implementation time must be implemented after the promotion notification has been submitted.

My company has a program for retailers to try products when sales staff go out to sell in July and August. If the amount is over 100 million for 2 months and under 100 million for each month, do we have to notify the Department of Industry and Trade of the promotion?

The total prize value of a promotion program is determined based on the total value of all prizes in the 01 promotion program, not based on the values ​​of the prizes corresponding to different parts/phases/locations/objects… or according to any criteria in the program. Therefore, in the case mentioned above, the Company must still carry out the administrative procedure of Promotion Notification according to regulations.

My company is a life insurance company that is planning to provide new products to customers and collect no fees nationwide. Our products are insurance products that have been approved by the Ministry of Finance for business and distribution. So what procedures do we need to follow?

The form of promotion that the enterprise plans to implement is “Providing sample goods and sample services for customers to try without paying”. The enterprise needs to carry out administrative procedures to notify the promotional activities of all Departments of Industry and Trade where the promotion is organized at least 03 working days before implementing the promotion. After notification, the enterprise needs to ensure the regulations for this form of promotion according to the regulations.

My company is planning to announce a promotion for product A as follows: When buying product A, customers will receive a 30% discount and a free product B. Can we implement both of these programs at the same time? If we do, do we have to add the amount equivalent to the 30% discount and the value of the free product, ensuring it is less than 50%?

Traders can implement multiple promotional programs at the same time. According to regulations, the maximum limit on the value of goods and services used for promotion is The total value of goods and services used for promotion that a trader implements in a Promotion Program must not exceed 50% of the total value of the goods and services being promoted. Therefore, the total value of discounts and the value of goods used for promotion must not exceed 50% of the total value of the goods and services being promoted.

Information customers need to provide when using promotional notification services at Viet An Law

• Name of the trader performing the promotional activity notification;
• Name of the Promotion Program;
• Promotional locations (provinces and cities where the trader conducts the promotion);
• Promotional forms (gifts, discounts, vouchers, etc…);
• Promotional goods and services (business goods promoted for sale by implementing promotions);
• Goods and services used for promotion (prizes, gifts);
• Time of promotion;
• Promotional program customers (promotion beneficiaries);
• Prize structure and total prize value of the Promotion Program;
• Detailed content of the program;
• In case many traders cooperate to implement the Promotion Program, the names of the participating traders, the specific content of participation, and the specific responsibilities of each participating trader in the Program must be clearly stated.

The above is legal advice on the promotional activity notification regime in Vietnam. If you need advice or use promotional notification services from Viet An Law, please contact the information below for timely support!

Update: 9/2024