Promotional activities in Vietnam

In the field of commerce, promotional activities are one of the tools to help promote customers’ ability to buy goods or use services; thereby, increasing revenue, and profits and bringing benefits to businesses. This is also a way for businesses to compete with each other to win customers. According to Clause 1, Article 88 of the Law on Commerce 2005, promotion is a commercial promotion activity of a trader to promote the purchase and sale of goods and provision of services by giving customers certain benefits. Viet An Law hereby will guide some regulations on promotional activities in Vietnam applied from 2024 under Decree 81/2018/ND-CP as amended by Decree 128/2024/ND-CP.

The subject of promotional activities in Vietnam

• Traders producing and trading goods and services directly carry out promotions or carry out promotions through distributors (wholesalers, retailers, agents, franchisees, and other distributors as prescribed by law);
• A trader providing promotional services conducts promotions for goods and services of other traders according to an agreement with that trader.

Promotional forms

• 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;
• 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;
• Sale of goods or provision of services together with participation by customers in promotional games of chance in connection with the purchase of goods or service and winning of prizes due to chance of participants 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;
• Organization for customers to participate in cultural, artistic, entertainment programs and other events for promotional purposes;
• Other forms of promotion if approved by the state management agency of commerce.

Notice of promotion organization

Forms of promotion that must be notified applied from December 2024 include:

• 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;

Cases where promotional announcements are not required

When promoting in the above forms, traders do not have to carry out administrative procedures to notify the implementation of promotions when:

• Decree 128/2024/ND-CP, which takes effect from December 1, 2024, has abolished several forms of non-promotional sales promotion as prescribed, 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;
• Traders implementing promotional programs as prescribed must notify but have a total value of prizes and gifts of less than 100 million VND;
• Traders implementing promotional programs as prescribed must notify that they only conduct sales and promotions through e-commerce trading floors and online promotional websites.

Thus, Decree 128/2024/ND-CP has amended the main content of the obligation to notify sales promotions, significantly reducing the number of cases in which obligations must be fulfilled for traders.

Notification time: At least 03 working days before the promotion.

The dossier includes : Notice of promotion implementation under Form No. 01, Decree 81/2018/ND-CP (before 12/2024) or Decree 128/2024/ND-CP (from 1/12/2024).

Authority: Department of Industry and Trade where the promotion is organized.

Method of application:

Traders can submit their application in one of the following ways:

• Submit 01 dossier of notification via postal service to the Departments of Industry and Trade where the sales promotion is organized;
• Submit 01 notification dossier directly at the head office of the Department of Industry and Trade where the sales promotion is organized;
• Submit 01 notification dossier via the National Public Service Portal or the provincial administrative procedure settlement information system.

Register for sale promotions in Vietnam

Promotional forms that must be registered include:

• Selling goods and providing services together with participation in lucky promotional programs;
• Other promotions not regulated by law.

Registration documents for promotion include:

• 01 Registration for promotional program implementation under current form.
• 01 Promotion program rules under current form.
• Sample of evidence of winning or detailed description of evidence of winning;

According to the newly amended Decree 128/2024/ND-CP, currently the promotional registration dossier has abolished the component of copies of the quality of promotional goods in accordance with the law.

Competent authority

• Department of Industry and Trade (for promotional programs implemented in a province).
• Ministry of Industry and Trade (for promotional programs implemented in multiple provinces).

Processing time: 05 working days from the date of receipt of the dossier, the competent state management agency of trade shall consider and respond with confirmation or non-confirmation of the trader’s registration to implement the promotional program; in case of non-confirmation, the reason must be clearly stated following the provisions of law.

Method of Application

Traders can submit their application in one of the following ways:

• Submit 01 dossier of registration via postal service to a competent state management agency;
• Submit 01 registration dossier directly at the head office of a competent state management agency;
• Use the online public service system provided by competent state management agencies.

Some notes on promotional activities in Vietnam

• The maximum discount for promotional goods and services must not exceed 50% of the price of the goods and services immediately before the promotion period. The total time for implementing promotions in the form of discounts for a type of brand of goods and services must not exceed 120 days in a year.
• When wanting to amend or supplement the content of a promotional program that has been previously registered or notified, before amending or supplementing, the trader must carry out administrative procedures to register or notify the amendment or supplement to the content of the promotional program to the state management agency where the registration or notification was made. Amendments or supplements to the content of the promotional program must ensure that they do not affect the rights of customers who participated in the program before the program was amended or supplemented.
• Merchants conducting lucky draw promotions must deduct 50% of the announced prize value into the state budget in case there is no winner.
• Trader need to apply Reporting the results of promotional activities, which is a form of post-inspection to serve state management in promotional activities in Vietnam.

Some questions related to promotional activities in Vietnam

Does my company have to follow the promotional notification procedure if it plans to conduct a promotion?

From December 2024, when traders carry out sales promotion by business, they will not need to carry out the procedures for notifying sales promotion to the Departments of Industry and Trade where the addresses of agents and stores are located. Before the above time, promotional procedures were only mandatory for promotional programs with a total value of prizes and gifts of over 100 million VND.

How to determine the limit of 100 million VND to decide on the obligation to notify promotions?

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 prizes corresponding to different localities or objects or according to any criteria in the promotion program. Therefore, in the case mentioned above, the Company still has to carry out administrative procedures to notify promotional activities to the Department of Industry and Trade as prescribed.

Services of Viet An Law Firm related to business promotion activities

• Consulting businesses on choosing promotional forms;
• Consulting businesses on how to carry out promotional procedures with competent state agencies;
• Draft documents and official dispatches to carry out procedures for notification/registration of promotional programs with competent state agencies;
• Represent clients in performing related work with local and central government agencies;
• Consulting on legal issues arising during promotional activities in particular and business activities in general according to specific requirements of the business.