Establishment of a foreign capital advertising agency in Vietnam

Pursuant to the provisions  of the Law on Investment 2020, the Law on  Enterprises 2020, the Law on Advertising 2012, and Vietnam’s Schedule of commitments in the WTO, regulations on foreign investors providing advertising services in Vietnam are implemented as follows:

• Vietnam has not committed to allow the establishment of a 100% foreign capital advertising agency, so foreign investors wishing to operate advertising services in Vietnam must conduct a joint venture with a Vietnamese partner, in which the foreign investor contributes capital to the joint venture with any percentage less than 100%; or cooperate under a cooperation contract business.
• The Vietnamese partner in the joint venture must be an enterprise registered for provision of advertising services;
• Joint ventures between foreign investors and Vietnamese enterprises are entitled to provide advertising services for all types of products, except cigarettes. Alcohol advertising is permissible but must ensure compliance with Vietnamese laws.

Legal bases

• Vietnam’s commitments in the WTO;
• Investment Law 2020;
• Law on Advertising 2012;
• Decree No. 31/2021/ND-CP dated March 26^th 2021;
• Decree 70/2021/ND-CP dated July 20^th

To invest in advertising services in Vietnam, foreign investors have two choices

• Establishment of foreign capital economic organizations;
• Capital contribution, purchase of shares, capital contribution to economic organizations providing advertising services.

Option 1: Establish a foreign capital economic organization in Vietnam

Step 1: Investors apply for an Investment Registration Certificate

Dossier of issuance of Investment Registration Certificate

• A written request for implementation of an investment project;
• Documents on the legal status of the investor: a copy of the identity card or identity card or passport (if an individual); a copy of the certificate of incorporation or equivalent document and the passport of the capital manager (if it is an organization);
• An investment project proposal includes the following contents: investors implementing the project, objectives, scale and investment capital, capital mobilization plan, location, duration, investment progress, labor demand, proposal for investment incentives, impact assessment, socio-economic efficiency of the project;
• Documents proving the financial capacity of the investor include at least one of the following documents: financial statements of the last 02 years of the investor; commitment to financial support of the parent company; commitment to financial support of the financial institution; guarantee on the financial capacity of the investor; other documents proving the financial capacity of the investor;
• An investment project proposal includes the following principal contents: investor or investor selection form, investment objectives, investment scale, investment capital and capital mobilization plan, location, duration, implementation progress, information on the current status of land use at the project site and land use demand proposal (if any), demand for labor, proposal for investment incentives, impacts, socio-economic efficiency of the project, preliminary environmental impact assessment (if any) in accordance with the law on environmental protection.

Where the law on construction provides for the preparation of a pre-feasibility study report, the investor may submit the pre-feasibility study report instead of the investment project proposal;

• In case the investment project does not request the State to allocate land, lease land, permit change of land use purpose, submit copies of land use right papers or other documents determining the right to use the location for the implementation of the investment project;
• Contents of explanation of technologies used in investment projects, for projects subject to appraisal and collection of opinions on technologies in accordance with the law on technology transfer;
• Other documents related to the investment project, requirements on conditions and capacity of the investor as prescribed by law (if any);
• Power of attorney for Viet An Law.

Place of application: Department of Planning and Investment where the head office is expected to be located.

Order of processing: Within 15 days from the date of receipt of a complete and valid dossier, the Department of Planning and Investment will issue an Investment Registration Certificate to the foreign investor. In case of refusal to grant a grant, the Department of Planning and Investment will reply in writing clearly stating the reason.

Step 2: Establish a foreign capital advertising agency in Vietnam

Business establishment documents

• Application for registration of the enterprise;
• The company’s charter;
• List of founding shareholders and shareholders being foreign investors (if they are joint-stock companies); List of members (if it is a two-member limited liability company);
• Certified copy of identity card or citizen identification card or passport (if an individual); establishment decision, enterprise registration certificate or equivalent document and citizen identity card or identity card or passport with written authorization for the capital manager in Vietnam (if it is an organization);
• A certified copy of the granted Investment Registration Certificate;
• Power of attorney for Viet An Law Firm;

Place of application: Department of Planning and Investment where the enterprise is headquartered.

Duration: 03 – 06 working days.

Disclosure of contents of business registration information

• After being granted the Certificate of Business Registration, an enterprise must publicly announce it on the National Business Registration Portal and pay fees as prescribed by law. The contents of the announcement include the contents of the Certificate of Business Registration and the following information:

• Business lines;
• List of founding shareholders; list of shareholders being foreign investors, for joint-stock companies (if any).

• Publication fee: The request for publication of enterprise registration contents and payment of fees for disclosure of enterprise registration contents shall be made at the time the enterprise submits the enterprise registration dossier. In case an enterprise is not granted enterprise registration, the enterprise will be refunded the fee for announcing enterprise registration contents.

The announced fee is VND 100,000 as prescribed in Circular 47/2019/TT-BCT.

Mark of the business

• A seal includes a seal made at a seal engraving establishment or a seal in the form of a digital signature in accordance with the law on e-transactions.
• The enterprise decides on the type of seal, quantity, form and content of the seal of the enterprise, branches, representative offices and other units of the enterprise.
• The management and retention of the seal shall comply with the provisions of the company’s charter or regulations promulgated by the enterprise, branch, representative office or other unit of the enterprise bearing the seal. Enterprises use seals in transactions in accordance with the provisions of law.

Option 2: Capital contribution, purchase of shares, capital contribution to an economic organization providing advertising services in Vietnam

This method will help investors save more time and costs by not having to apply for an Investment Registration Certificate. However, investors must ensure the proportion of capital contributed by foreign investors in accordance with regulations. If choosing this method, investors only need to carry out procedures for registration of capital contribution, purchase of shares and contributed capital at the Department of Planning and Investment. In addition, for activities that foreign investors are not allowed to perform, it is necessary to consider and carry out procedures for reducing industries.

Step 1: Foreign investors register for capital contribution, purchase of shares, capital contribution to economic organizations

Dossiers include registration of capital contribution, purchase of shares, contributed capital

• A document of registration of capital contribution, share purchase or purchase of contributed capital includes the following contents: information on enterprise registration of economic organizations to which foreign investors plan to contribute capital, purchase shares or purchase contributed capital; business lines; list of owners, members, founding shareholders, list of owners, members, shareholders being foreign investors (if any); the percentage of ownership of charter capital of foreign investors before and after capital contribution, share purchase or purchase of contributed capital to economic organizations; expected transaction value of contracts for capital contribution, share purchase, purchase of contributed capital; information on investment projects of economic organizations (if any);
• Copies of legal papers of individuals, organizations contributing capital, buying shares, purchasing contributed capital and economic organizations with foreign investors contributing capital, buying shares or purchasing contributed capital: Passport (if an individual); Business license or equivalent document and passport of the person authorized to manage the capital portion in Vietnam (if it is an organization);
• A written agreement in principle on capital contribution, share purchase or purchase of contributed capital between foreign investors and economic organizations in which foreign investors contribute capital, purchase shares, purchase contributed capital or between foreign investors and shareholders or members of such economic organizations;
• A copy of the land use right certificate of an economic organization in which foreign investors contribute capital, purchase shares or purchase contributed capital if such economic organization has a land use right certificate in islands, communes, wards, border towns and coastal communes, wards and townships; other areas affecting national defense and security, except economic organizations implementing investment projects in industrial parks, export processing zones, hi-tech parks or economic zones established under the Government’s regulations.
• Power of attorney for Viet An Law.

Place of application: Department of Planning and Investment where the economic organization is headquartered.

Order and procedures: If the capital  contribution, share purchase or capital contribution of foreign investors satisfies the conditions on ownership ratio and investment form in accordance with the Schedule of commitments and Vietnamese law, within 15 days from the date of receipt of complete dossiers,  The Department of Planning and Investment will notify in writing. In case the application does not meet the conditions, the Department of Planning and Investment will notify in writing clearly stating the reason.

Step 2: Carry out procedures for transferring shares, contributed capital and changing shareholders, members and owners.

Some questions related to the dossier of establishment of a foreign capital company

Which types of companies can foreign investors establish to provide advertising services in Vietnam?

Investors may choose one of the following types:

• Limited liability companies with two or more members;
• Joint stock company.

Can foreign investors invest 100% capital to provide advertising services?

Investors are not allowed to invest 100% capital to provide advertising services in Vietnam.

Which products and services prohibit advertising?

• Products, goods and services prohibited from advertising include:
• Goods and services prohibited from trading in accordance with the provisions of law.
• Alcohol with an alcohol content of 15 degrees or more.
• Breast milk substitutes for infants under 24 months old, nutritional supplements for infants under 06 months old; feeding bottles and artificial breast lozenges.
• Prescription drugs; non-prescription drugs recommended by competent state agencies to limit their use or use under the supervision of physicians.
• Types of products and goods of an erotic nature.
• Hunting rifles and hunting rifle ammunition, sporting weapons and products and goods that incite violence.
• Other advertising-prohibited products, goods and services shall be prescribed by the Government when they arise in fact.

What is prohibited in advertising?

Prohibited acts in advertising include:

• Advertise prohibited products, goods and services.
• Advertisements that reveal state secrets, harm national independence, sovereignty, security and defense.
• Advertising lacks aesthetics, contrary to Vietnamese historical, cultural, moral traditions and fine customs.
• Advertising affects urban aesthetics, traffic order and safety, and social safety.
• Advertisements that adversely affect the sanctity of the National Flag, Coat of Arms, National Anthem, Party flag, national heroes, cultural celebrities, leaders and leaders of the Party and State.
• Ads that are ethnic, racist, infringe on freedom of belief, religion, gender stereotypes and people with disabilities.
• Ads that offend the prestige, honor and dignity of organizations and individuals.
• Ads that use images, words or letters of individuals without the individual’s consent, unless otherwise permitted by law.
• False or misleading advertisements about the business ability, ability to provide products, goods and services of organizations or individuals trading products, goods and/or services; in terms of quantity, quality, price, use, design, packaging, trademark, origin, type, mode of service, warranty period of registered or announced products, goods and services.
• Advertise by using the method of direct comparison of price, quality and efficiency of use of their products, goods and services with the price, quality and efficiency of use of products, goods and services of the same type of other organizations and individuals.
• Ads that use the words “most”, “unique”, “best”, “number one” or words of similar meaning without legal documentation as prescribed by the Ministry of Culture, Sports and Tourism.
• Ads with unfair competition content in accordance with the provisions of competition law.
• Ads that violate intellectual property laws.
• Advertisements that create for children to think, speak or act contrary to morals and fine customs; adversely affect the health, safety or normal development of children.
• Forcing agencies, organizations and individuals to advertise or receive advertisements against their will.
• Hang, place, paste and draw advertising products on electric poles, electricity poles, traffic signal poles and trees in public places.

Services of establishing foreign capital companies of Viet An Law Firm

• Advising on conditions for establishing a foreign capital company: capital contribution ratio of foreign investors in Vietnam; business conditions for trades; project implementation location; note the procedures before and after the establishment of a foreign capital company;
• Advising on choosing the right type of company for investors: Limited company or joint stock company;
• Advising on opening a capital transfer account, capital contribution duration;
• Consulting and guiding investors to prepare necessary documents to establish a foreign capital company;
• Advising and drafting company establishment documents for investors;
• Representing investors to work with competent state agencies of Vietnam in the process of carrying out company establishment procedures for investors (Application for Investment Registration Certificate, Business Registration Certificate, Business License,  License according to specialized requirements,  make legal entity seals, procedures after company establishment,…;
• Comprehensive, regular consultancy, accounting services, tax law package of activities arising in the process of conducting business in Vietnam for investors.