Vietnam’s dynamic economy and rapidly expanding digital landscape have made it an attractive destination for foreign investors in the advertising industry. With a growing number of businesses seeking professional marketing and branding services, there is a significant opportunity for foreign-owned advertisement companies to thrive. However, entering this market requires navigating Vietnam’s legal framework, investment regulations, and business setup procedures.
1. Are foreign investors allowed to establish a wholly foreign-owned advertising company in Vietnam?
According to Vietnam’s Schedule of Specific Commitments in Services under the WTO, advertising services fall under CPC code 871. This schedule, along with Article 40 of the Law on Advertising 2012, stipulates that foreign organizations and individuals can only conduct advertising business in Vietnam through one of the following forms:
- Establishing a joint venture with a Vietnamese advertising service provider.
- Entering into a business cooperation contract with a Vietnamese partner.
As a result, foreign investors are not permitted to establish a wholly foreign-owned advertising company in Vietnam. Instead, they must collaborate with Vietnamese entities or individuals authorized to provide advertising services. However, since January 1, 2009, there is no longer a specific cap on foreign capital contribution in joint ventures, though foreign ownership cannot reach 100%.
2. Guide for Foreign Investors and Vietnamese Advertising Providers to Establish a Joint Venture
In accordance with the Schedule of Specific Commitment in Services of Vietnam in WTO and clause 1 Article 40 of the Law on Advertising, Vietnamese partners must be registered juridical entities providing advertising services.
| Step | Description | Required Documents | Submission Location | Processing Time |
|---|---|---|---|---|
| Step 1 | Apply for the Investment Registration Certificate | – A written request for permission for project execution – Individual investors: copies of ID or passport of each individual – Organization investors: copies of Establishment Certificate or equivalent paper confirming the legal status<br>- Project proposal – Copies of financial statements in the current 02 years or financial support commitment of the parent company or financial institutions; guarantee for investors’ financial capacity, description of investors’ financial capacity – Land use demand. If the project does not use land allocated or leased by the State or does not require the State to change land use purpose, the copies of the lease agreement or equivalent papers proving that investors have rights to use the location shall be submitted – If the project use any technology in the List of technologies restricted from transfer, investors have to submit the explanation on technology transfer | The Department of Planning and Investment | Within 15 days from the receipt date of the valid application, the Department of Planning and Investment will grant the Investment Registration Certificate. If refused, they will respond in notices and explain the reasons. |
| Step 2A | Apply for the Business Registration Certificate | – A written request for business registration – The Articles of Associates – The list of members of the multi-member limited liability company or the list of partners of partnership – Notarized copies of ID or valid passport of each individual member; notarized copies of the Business Registration Certificate/Establishment Certificate of each organization member; notarized copies of ID or valid passport of each legal representative of each organization – Power of attorney (Clients grant to Viet An) – Certificate of Investment Registration of foreign investors | The Department of Planning and Investment | 03-06 working days |
| Step 2B | Announce the business registration contents | Business registration information must be announced publicly on the National Portal of Business Registration within 30 days from the date of issuance of the Business Registration Certificate. The contents of the announcement are all the information stated in the Business Registration Certificate. |
Notice: In accordance with Clause 1, Article 26 of Decree 50/2016/NĐ-CP, if a company fails to announce or delays the announcement of its business registration information on the National Portal of Business Registration, it may be subject to a fine ranging from 1,000,000 VND to 2,000,000 VND.
3. Guide for Purchasing Shares/Capital Contributions in a Vietnamese Advertising Company
Step 1: Register Capital Contribution or Share Purchase
- Description: Foreign investors must register their intention to contribute capital, purchase shares, or acquire capital contributions in a Vietnamese advertising company.
- Required Documents:
- Application form indicating details of the target company and the foreign investor’s capital contribution after completing the procedure.
- Copies of the ID or passport for individual investors.
- Copies of the Establishment Certificate or equivalent documents proving the legal status of organizational investors.
- Submission Location: Department of Planning and Investment.
- Processing Time: Within 15 days from the date of receiving a valid application, the Department of Planning and Investment will issue a written notice. If the application does not meet the conditions, a written explanation will be provided, stating the reasons for rejection.
Step 2: Transfer of Shares/Capital Contributions and Updating Company Records
- Description: Once approval is granted, the transfer of shares or capital contributions is completed, and the company updates its records to reflect the changes in shareholders or members.
- Required Actions:
- Execution of transfer agreements between the current and new shareholders/members.
- Update company records and notify relevant authorities as required.
Vietnam’s advertising industry presents significant opportunities for foreign investors looking to enter a rapidly expanding market. However, due to legal restrictions, establishing a wholly foreign-owned advertising company is not an option. Instead, foreign investors must collaborate with Vietnamese partners through joint ventures or business cooperation contracts to operate legally.
Understanding the investment registration process, business setup procedures, and share acquisition regulations is crucial for a smooth market entry. Compliance with Vietnam’s investment laws and advertising regulations ensures a seamless business establishment while avoiding potential legal hurdles.
By following the correct procedures and working with experienced local partners, foreign investors can successfully navigate Vietnam’s legal framework and capitalize on the country’s growing demand for advertising services. With the right approach, Vietnam can be a highly lucrative market for foreign-owned advertising businesses.
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