Case Study No. 1 | Cross-Border Advertising for a Web Media Operator

NEXORA LAWFIRM has a team of Vietnamese attorneys well versed in advertising, IT, and media business in Vietnam, and has provided extensive legal advice to Japanese companies on content distribution and cross-border advertising businesses. We are particularly experienced in handling the intersection of advertising law, telecommunications law, and taxation in cross-border digital advertising (advertising placed from Japan targeting Vietnam, and overseas advertising placements by Vietnamese entities). For readers interested in "Vietnam advertising regulation," "web media law in Vietnam," "cross-border e-commerce regulation," "Japanese companies advertising into Vietnam," and "advertising licenses for foreign entities," this article uses an actual case study to walk through the required licenses, the laws to watch, and key practical issues in detail.

01 - Overview of the Case

Japanese company XXX operates a media website in Vietnam ("this Website") that publishes information about clients' products and services under the concept of "recommending clients' products." The company plans to monetize this Website through brokerage/referral commissions.

【Key Points】

The company plans to provide cross-border services without a physical presence in Vietnam.
Some of the articles planned for posting on this Website are not created in-house, and may in part be reposted without authorization from other websites.

In light of the above, Company XXX sought our advice on the legality of this arrangement under Vietnamese law and on possible countermeasures.

02 - Legal Advice from Vietnamese Counsel

▶ Legal Issue 1: Legality of the cross-border brokerage service (advertising law and taxation)

A cross-border trade brokerage business cannot be conducted in Vietnam without a local presence.
Instead, a cross-border advertising service may be considered as an alternative. Under Article 1 of Decree No. 70/2021/ND-CP, cross-border advertising services provided by a foreign company are lawful. However, the following requirements apply:
Notification must be given to the competent Vietnamese authority no later than 15 days before advertising begins.
Where revenue arises within Vietnam, foreign contractor tax (corporate income tax) must be paid at a rate of 5%. (※ Since Company XXX has no establishment in Vietnam, where a Vietnamese client pays the advertising fee, that client may handle the tax payment on Company XXX's behalf.)

▶ Legal Issue 2: Copyright infringement risk (intellectual property law)

Under Article 25 of Vietnam's Intellectual Property Law and Article 18 of Decree No. 131/2013/ND-CP, reproducing or reposting copyrighted works without the rightsholder's permission may result in a fine of up to VND 35,000,000.

Even where the purpose is non-commercial, the conduct may still be found unlawful if the source is not clearly attributed.

✅Recommended measures:

Content reposted from other sites should be rewritten into original expression, avoiding duplication wherever possible.
Where quoting other sources is unavoidable, the source URL and the title of the work should be clearly indicated, so as to fall within the "citation exception" under Article 25(1)(dd) of the Intellectual Property Law.
Written contracts addressing copyright treatment should be executed with every writer.

▶ Legal Issue 3: Prohibited and restricted expressions in advertising (Advertising Law)

Under Article 8(11) of Vietnam's Advertising Law, expressions such as "only," "best," or "number one" may not be used without a certificate issued by the Ministry of Culture, Sports and Tourism.

Some articles published on this Website contain expressions similar to the above, which could be found to violate the Advertising Law.

✅Recommended measures:

Where the Website is operated for commercial purposes, we recommend reviewing all articles and revising or removing any prohibited expressions found.
For conditional products (pharmaceuticals, cosmetics, functional foods, etc.), a license certificate should be obtained from the advertiser and checked for consistency with the content.

◆Conclusion and Recommended Course of Action◆

For Company XXX to operate its information media lawfully and stably in Vietnam, we consider the following measures necessary:

Restructuring the business model: reconsidering the business not as a trade brokerage but as a cross-border advertising business.
Establishing a copyright management framework: promoting the creation of original content and strictly enforcing citation rules.
Managing advertising expression: eliminating prohibited terms and checking compliance with the Advertising Law.
Establishing administrative and tax procedures: setting up a framework to handle the advertising-commencement notification and tax obligations.
Revising writer contracts: entering into contracts that clearly specify copyright ownership and the allocation of liability.