Foreign Investment Restrictions and Business Conditions for the Advertising Business in Vietnam
Table of Contents
17. Industry Category 21. Advertising No. 1
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1. Overview of Regulations
Business: Advertising Business
Official Business Name under Vietnamese Law
CPC Code
VSIC Code
Advertising business
871
7310
*Breakdown of Advertising Services
Sale and lease of advertising time and space
Creation and implementation of advertising plans
Other advertising services: outdoor advertising, aerial advertising, delivery of samples and promotional materials
Advertising consulting, innovative advertising-related services, production of advertising copy, and implementation of media-related plans
Investment and Business Conditions
Conditions under WTO Commitments and Vietnamese Domestic Law (Law on Advertising No. 16/2012/QH13)
Foreign investors may not conduct advertising business in Vietnam on a stand-alone basis (100% foreign ownership). Under the WTO commitments, foreign investors (including Japanese investors) must enter the Vietnamese advertising business either by establishing a joint venture company or through a business cooperation contract (BCC).
"Points to Note"
Note ①: Because there is no restriction on the ownership ratio of the Japanese investor in the joint venture or BCC, a Japanese investor may hold less than a 100% share.
Note ②: The Vietnamese local entity that serves as the partner in the joint venture or BCC must satisfy both of the following conditions.
It must be a legal entity (an individual cannot serve as the partner)
*This may be either a 100% foreign-invested Vietnamese entity or a domestic Vietnamese local company.
It must be qualified to conduct advertising business
In addition, a foreign company engaged in the advertising business that does not have a local entity may establish a representative office in Vietnam, but may not establish a branch.
Foreign-invested advertising businesses may not advertise tobacco. As for alcohol advertising, foreign-invested businesses are treated equally with Vietnamese local companies.
2. Parties Engaged in Advertising Activities
Under the current Law on Advertising, the following parties engage in advertising activities.
1. Advertisers
Organizations or individuals that wish to advertise their own products, goods, services, or themselves
2. Advertising Service Providers
Organizations or individuals that perform one, several, or all stages of the advertising process under an advertising service agreement with an advertiser
3. Advertisement Publishers
Organizations or individuals that introduce advertised products through advertising media under their own management responsibility. Examples: news organizations, publishers, website owners, organizers of cultural or sports programs, and other organizations or individuals that use advertising media
4. Lessors of Advertising Locations or Media
Parties that own a location (real estate) or advertising media (signage, neon signs, websites, exhibitions, events, etc.) and provide that location or media to the above advertising parties under a lease agreement
【Comment】
"Advertising services" under the WTO commitments correspond to the "advertising service providers" described in item 2 above. Only advertising service providers are required to record their business content (advertising business) on their business registration certificate, and only activities falling within the recorded scope are permitted (Article 13 of the Law); no similar provisions are found for the other categories of parties engaged in advertising activities.
However, in practice, the distinction between advertising service providers and advertisement publishers is ambiguous, with no clear consensus. As a result, many advertisement publishers conservatively register their advertising service business as well.
3. Restrictions and Conditions on Advertising Activities
(1) Prohibited Advertising Content
① Under Article 7 of the current Law on Advertising, advertising of the following is prohibited.
Goods and services whose sale is prohibited
Tobacco and alcoholic beverages with an alcohol content of 15 degrees or more
Breast milk substitutes for infants under 24 months of age
Nutritional supplement products for infants under 6 months of age
Feeding bottles or teats, and prescription drugs or drugs requiring medical supervision
Sexually stimulating products
Hunting guns and their ammunition
Sporting weapons, and products/goods that incite violence
Other products, goods, or services designated by the government
② Advertisements that undermine the independence and dignity of the Vietnamese state, the national flag, the national anthem, the Party flag, or the honor and prestige of organizations or individuals are prohibited. In particular, comparative advertising that directly compares the price, quality, or effectiveness of goods or services with those of the same type offered by another organization or individual, as well as advertisements using expressions such as "first," "only," "best," or "greatest," are also prohibited.
③ Advertising by telephone or email is regulated to protect individual privacy and rights; sending an advertisement again after it has been refused once is subject to administrative sanctions. Detailed conditions are also set for the language of advertisements and for each advertising medium.
(2) General Conditions for Advertising
The goods or services being advertised must have a business registration certificate
Where Vietnamese law requires a conformity certificate or similar certification for the goods or services, such certificate or certification must be held
Where Vietnamese law requires an ownership certificate for the property in question, such ownership certificate must be held
(3) Specific Requirements for Advertising Particular Goods or Services
Special Goods/Services
Main Conditions
Pharmaceuticals
Must hold a distribution license and a usage guideline document approved by the Ministry of Health
Cosmetics
Must hold a cosmetic ingredient disclosure certificate
Chemical products
Must hold a distribution license
Infant nutritional foods
Must hold a conformity certificate and a hygiene/safety certificate
Food and food additives
Must hold a hygiene/safety certificate
Health check-up and disease treatment services
Must hold a business operation license
Medical equipment
Must hold a distribution license
Pesticides, veterinary drugs, etc.
Must hold a product registration certificate and a product quality disclosure certificate