Forms of promotion registered at Vietnam Trade Promotion Agency

In the context of a competitive economy, many businesses organize promotional activities. Forms of promotion may or may not require registration at the Department of Industry and Trade where the promotion is held. The article below from Viet An Luat will provide you with some information about forms of promotion registered at Vietnam Trade Promotion Agency.

Legal basis

• Law on Commercial 2005;
• Decree 81/2018/ND-CP details the Commercial Law on trade promotion activities, as amended and supplemented by Decree 17/2020/ND-CP.

What is promotion?

Promotion is an activity commonly used to attract customers and increase sales. It could be a discount campaign, giveaways or rewards, or other incentives to encourage customers to buy products or use a company’s services.

Promotions are often used on special occasions such as festivals and holidays, or to clear inventory or stimulate consumption during slow sales periods. The purpose of promotions is to attract customers and increase sales while helping companies build long-term customer relationships.

What is the Trade Promotion Agency?

Vietnam Trade Promotion Agency is an organization under the Ministry of Industry and Trade, performing the function of advising and assisting the Minister in state management organizing law enforcement in the field of trade promotion activities, and investment promotion developing the Industry and Trade industry according to the provisions of law.

The Trade Promotion Agency has its own legal status, seal, and account according to the provisions of law; Operating funds are provided by the state budget and from other sources according to state regulations.

Forms of promotion registered at Vietnam Trade Promotion Agency

Promotion registration is carried out at the Trade Promotion Agency, under the Ministry of Industry and Trade when such forms are prescribed to be under the jurisdiction of the Ministry of Industry and Trade. Accordingly, there are two forms prescribed by Decree 81/2018/ND-CP including:

Firstly, the form of promotion by purchasing goods and services accompanied by participation by customers in promotional programs of chance associated with the purchase of goods or services and winning prizes is based on the luck of the participants according to the announced rules and prizes (hereinafter referred to as promotional programs of chance) in multiple-area. This is one of the forms of promotion specified in Article 92.6 of the Commercial Law 2005.

For example: When purchasing the company’s cosmetic products, customers will receive 01 winning scratch card coupon.

In addition, other forms of promotion, if approved by the state management agency in charge of commerce (Article 92.9 of the Commercial Law), are also subject to registration provided that it does not belong to the following forms:

• Giving samples of goods or providing samples of services to customers for trial use free of charge.
• Gifting goods as gifts or providing free-of-charge services to customers.
• Selling goods or providing services at prices lower than goods sale prices or service provision charge rates previously applied during the period of sales promotion already registered or announced. In case of goods or services subject to the State management over their prices, the sales promotion in this form shall comply with regulations of the Government.
• Selling goods or providing services together with coupons that allow customers to enjoy one or several benefits.
• Selling goods or providing services together with prize-contest entrance tickets to customers, to select prize winners according to the rules and prizes already announced.
• Organizing programs for frequent customers whereby gifts are presented to customers based on the quantities or values of goods purchased or services used by such customers and expressed in the forms of customers’ cards, coupons acknowledging the purchase of goods or services, or other forms.
• Organizing cultural, artistic, or entertainment programs or other events for customers for sales promotion.

Types of goods and services used for promotion

Goods and services used for promotion must be goods and services that the enterprise is doing business in or belong to another enterprise; are goods and services that are legally traded and used to give away, reward, or give away without collecting money from customers. Specifically:

• Promotional goods and services do not include alcohol, lotteries, cigarettes, breast milk substitutes, human medicines, including medicines that have been permitted for circulation according to regulations of the Ministry of Health (except for promotion for drug traders) medical examination and treatment services of public medical establishments, educational services of public establishments, public vocational education establishments, prohibited goods and services circulated in Vietnam and other goods and services prohibited from promotion according to the provisions of law.
• Money can be used like goods and services for promotion, except in cases of promotion by:
  • (1) Giving sample goods or providing sample services for customers to try without paying;
  • (2) Promotion in the form of discounts;
  • (3) Selling goods and providing services with purchase vouchers and service usage vouchers.

Is the value of promoted goods and services limited?

The value of promoted goods and services must be limited. Specifically:

• The material value used to promote a unit of promoted goods or services must not exceed 50% of the price of that promoted unit of goods or services before the promotion period, except in the case of promotional sales by the forms specified in Clause 8, Article 92 of the Commercial Law, Article 8, Clause 2, Article 9, Article 12, Article 13, Article 14 of Decree 81/2018 /ND-CP.
• The total value of goods and services used for promotion that a trader conducts in a promotion program must not exceed 50% of the total value of the goods and services being promoted, except in the case of promotions in the form of goods or services specified in Clause 8, Article 92 of the Commercial Law, Article 8 and Clause 2, Article 9, Decree 81/2018 /ND-CP.
• In cases of organizing concentrated promotional programs (hour, day, week, month, promotion season), the maximum limit on the value of goods and services used for promotion is 100%. The maximum limit on the value of goods and services used for 100% promotion is also applied to promotional activities within the framework of trade promotion programs and activities decided by the Prime Minister.

Promotion registration procedures at the Trade Promotion Agency – Ministry of Industry and Trade

Under Article 19 of Decree 81/2018/ND-CP, promotion registration procedures at the Trade Promotion Agency include:

• Traders must carry out administrative procedures to register promotional activities and must receive confirmation from a competent state management agency before implementing promotional programs.
• Within 05 working days from the date of receipt of the dossier (based on the date of receipt recorded on the postal bill of lading or forms of equivalent value in case of sending by post, based on the date recorded on Document receipt in case of direct submission or based on the date recorded on the system in case of submission via the online public service system), the Trade Promotion Agency – Ministry of Industry and Trade reviews and confirms or not confirm the trader’s registration to implement the promotion program; In case of non-confirmation, the reason must be clearly stated according to the provisions of law.
• For promotion registration documents made at the Ministry of Industry and Trade after confirmation of registration to implement the promotion program, the Ministry of Industry and Trade provides the Department of Industry and Trade where the trader organizes the promotion with the confirmed program for coordinated management.

Some notes when implementing promotional programs of chance

• The determination of winning prizes in promotional programs of chance must be held publicly, according to published rules, witnessed by customers, and must be recorded in writing.
• In case proof of winning is issued with the goods (attached, placed inside the goods, or in other similar ways), the trader conducting the promotion must notify the time and Place of issuance of proof of winning prize on goods to the Department of Industry and Trade where the release of proof of winning prize on goods is carried out before implementation.
• Evidence of winning promotional programs of chance must comply with the following conditions:
  • Expressed in physical form (lottery tickets, coupons, prize cards; lottery tickets, draws, numbers; cards, stamps, scratch cards; stamps, winning tickets; lids, buttons, bottoms, shells, bodies of product or product packaging; the prize itself) or data message (message; email; code, transaction code, customer code, product code) or other forms of equivalent value is used as a basis for determining the prize through a random method;
  • There is a different form from the lottery issued exclusively by the state and the results of the state lottery cannot be used to determine winning results.
  • Traders conducting promotions of chance must deduct 50% of the announced prize value into the state budget in case there is no winner.
  • A prize with no winner for promotion of chance with no winner is a prize if the prize deadline expires but there is no recipient or the winner cannot be identified.

Application for license to register promotion program at the Trade Promotion Agency

Submit 01 set of application documents to register for the promotion program with components including:

• 01 original Registration for promotion program;
• 01 original copy of Promotional Program Rules;
• Sample of proof of winning or detailed description of proof of winning;
• 01 copy without certification of documents on the quality of promotional goods according to the provisions of law.

Form of submission:

• By post;
• Submit directly to the Trade Promotion Agency – Ministry of Industry and Trade;
• Through the online public service system provided by competent state management agencies.

Contents of registration for promotion include:

• Name of the trader conducting the promotion;
• Name of promotional program;
• Area where promotions are carried out (provinces and cities where traders conduct promotions);
• Form of promotion;
• Goods and services are promoted;
• Goods and services used for promotion (prizes, gifts);
• Time of promotion;
• Customers of the promotion program (promotion beneficiaries);
• Prize structure and total prize value of the promotion program;
• Detailed content of the promotion program (promotion program rules);
• In case many traders coordinate to implement a promotion program, the registration content must clearly state the names of the participating traders, specific participation content, and specific responsibilities of each trader.

Above are some advice from Viet An Law forms of promotion registered at Vietnam Trade Promotion Agency. If you have any further questions, please contact us for the best support!