In the context of increasingly deep international economic integration, Vietnam has become an attractive destination for foreign investors, especially in the field of advertising. The strong development of the advertising market in Vietnam not only promotes the diversification of services but also opens up opportunities for foreign-invested advertising enterprises to develop and expand. To establish a foreign-invested advertising company, investors need to take legal steps as well as meet the necessary conditions when investing in this field.
I. The demand for establishing foreign-invested advertising enterprises
With the advancement of information technology and communications, Vietnam’s advertising industry is experiencing continuous innovation and creativity. This opens vast opportunities for foreign investors wishing to enter this promising market. Consequently, the establishment of advertising companies with foreign investment has become a growing trend. This trend not only reflects the desire of international investors to expand their market presence but also demonstrates Vietnam’s flexibility and openness in attracting foreign capital.
However, establishing a foreign-invested advertising company in Vietnam is not a simple process. Investors must thoroughly understand and comply with the relevant legal regulations and meet all necessary conditions.
II. Legal provisions on foreign-invested advertising enterprises
1. What Is a Foreign-Invested Advertising Enterprise?
A foreign-invested advertising enterprise is an advertising service business established and operating under Vietnamese law, in which a foreign investor is a member or shareholder. This means the enterprise receives direct foreign capital investment, and there is no restriction on the proportion of foreign capital versus domestic capital unless otherwise regulated.
2. Forms of investment in foreign-invested advertising enterprises in Vietnam
According to Clause 1, Article 40 of the Law on Advertising 2012, foreign organizations and individuals may cooperate or invest with Vietnamese advertising service providers through joint ventures or business cooperation contracts (BCCs).
Thus, the permitted forms of investment include:
- Joint Venture: Establishing a new company with foreign capital alongside a Vietnamese partner in the advertising sector; or contributing capital, and buying shares or contributed capital in an existing Vietnamese advertising company;
- Business Cooperation Contract (BCC): A contractual collaboration without forming a new legal entity.
3. Investment conditions for Vietnamese partners in foreign-invested advertising enterprises
According to Vietnam’s WTO Service Commitments:
- From the date of accession, foreign service providers may establish joint ventures or enter into BCCs with Vietnamese partners licensed to provide advertising services. Accordingly, foreign contributed capital is not exceed over 51% of the legal capital in the joint venture;
- However, since January 1, 2009, there has been no restriction on foreign capital contribution.
Therefore, the investment conditions include:
- Foreign investors cannot establish 100% foreign-owned advertising companies in Vietnam. They are only allowed to form joint ventures or enter into BCCs;
- Vietnamese partners must already be licensed to operate in advertising and must provide documentation demonstrating relevant industry experience.
III. Questions regarding foreign-invested advertising enterprises
1. How are violations (breaches) by foreign-invested advertising enterprises handled?
According to the Civil Code and contractual agreements, when foreign-invested advertising enterprises breach contracts, there are problems arising, as follows:
- The breaching party may be liable for compensating damages;
- The breaching party may be subject to fines for breach of contract;
- The contract may be terminated;
- The non-breaching party may unilaterally terminate the contract.
2. What are the required documents for an Investment Registration Certificate?
According to Clause 1, Article 36 of Decree 31/2021/ND-CP and Clause 1, Article 33 of the Law on Investment 2020, the application dossier includes:
- A written request for investment project execution, including a commitment to bear all costs and risks if the project is not approved;
- Legal documents of the investor;
- Financial capacity documents, including at least one of the following:
+ Financial statements for the past two years;
+ Commitment of financial support from the parent company;
+ Commitment of financial support from a financial institution;
+ Guarantee of financial capacity;
+ Other evidence demonstrating financial capability;
- Investment project proposal including:
+ Investor identity or selection method;
+ Investment objectives and scale;
+ Capital and funding method;
+ Location, term, and schedule;
+ Land use status and proposed land demand (if any);
+ Labor demand;
+ Proposed investment incentives;
+ Socioeconomic impact;
+ Preliminary environmental impact assessment (if applicable).
If required by construction laws, a pre-feasibility study report may replace the project proposal.
- If the project does not involve state land allocation/lease or land-use conversion, submit a valid copy of land-use rights or proof of site control;
- Technology explanation for projects requiring technology evaluation or consultation under technology transfer laws;
- BCC agreement for BCC-form projects;
- Other documents relevant to the project and investor’s eligibility (if applicable).
3. Can foreign investors own 100% of an advertising company in Vietnam?
No. Based on WTO service commitments:
- Foreign service providers are only allowed to form joint ventures or BCCs with Vietnamese partners;
- Initially limited to 51% foreign capital, but since January 1, 2009, the foreign capital share is no longer limited;
- However, 100% foreign ownership is still not permitted for advertising companies in Vietnam.
4. What benefits do foreign-invested advertising enterprises receive in Vietnam?
Foreign-invested advertising enterprises may enjoy the following benefits:
- Legal protection by the Vietnamese government through commitments such as:
+ Lawfully owned assets shall not be nationalized or confiscated by administrative measures;
- Investment incentives including:
+ Tax reductions and exemptions;
+ Land rent exemptions or reductions;
+ Supportive policies in accordance with the Law on Investment.
IV. Legal consulting services for foreign-invested advertising enterprises
The above is NPLAW’s comprehensive legal overview regarding the establishment and operation of foreign-invested advertising enterprises. Should you have any questions or require further assistance on related procedures, please do not hesitate to contact NPLAW through the following information:
