Conditions for foreign investors to do advertising service business in Vietnam

Foreign investors doing business in advertising services in Vietnam can take advantage of development opportunities in a dynamic and rapidly growing market. With the booming digital economy and the growing need to reach consumers, the advertising sector has become a strategic channel to build brands and expand markets. Investing in advertising services not only helps increase brand presence but also exploits long-term growth potential in Vietnam.

Can foreign investors operate advertising services in Vietnam?

According to the WTO Service Commitment Schedule, foreign investors are allowed to do advertising service business in Vietnam. Investment in this field is carried out in the form of joint ventures or business cooperation contracts. However, investors are not allowed to establish 100% foreign-owned companies.

Foreign investors must comply with the investment registration process according to the provisions of the Law on Investment 2020. Advertising service business belongs to the group of conditional business lines, requiring compliance with legal and professional requirements.

Advertising activities must comply with the Law on Advertising 2012 and its guiding documents. This includes regulations on advertising content, advertising forms and restrictions on advertising activities.

Regulations on conditions for foreign investors to operate advertising services

Equity conditions

According to the WTO Commitment Schedule, the capital contribution ratio of foreign investors is specifically regulated as follows:

• From the date of accession, it is allowed to establish joint ventures in which the foreign capital contribution cannot exceed 51% of the joint venture’s legal capital. Since January 1, 2009, there is no limit to the capital contribution ratio of foreign parties in joint ventures.
• Foreign investors must contribute capital to Vietnamese partners. Vietnamese partners must be businesses that have been licensed to provide advertising services and have experience in this field.
• The minimum charter capital must meet the requirements of the law on investment and business. Capital contribution must be made according to the registration schedule.

CSPL: Section F, WTO Commitment Schedule on Advertising Services.

Conditions on investment form

Foreign investors are only allowed to invest in two forms: joint venture or business cooperation contract (BCC). Each form has its own characteristics and requirements for management, administration and profit distribution.

• For joint venture form, the parties must establish a new legal entity in Vietnam. Enterprise management and operation must comply with the Law on Enterprise 2020.
• For BCC contracts, the parties agree on business cooperation and profit sharing without establishing a new legal entity. BCC contracts must be registered with the competent authority.

Some notes when providing advertising services to foreign investors

When selling advertising services, investors need to pay attention to the following issues to ensure the business process goes smoothly and brings the greatest efficiency.

• Investors should pay attention to regulations banning advertising according to Article 7 of the Law on Advertising 2012. Products banned from advertising include cigarettes, alcohol of 15 degrees or more, and other restricted products.
• The investment registration process must be carried out sequentially: apply for an Investment Registration Certificate first, then proceed with business registration. Records must be complete and valid according to regulations.
• Enterprises must comply with regulations on tax, accounting, financial reporting and other obligations under Vietnamese law.

Consulting services on advertising service business conditions

With a team of consultants with many years of experience, Long Phan provides consulting services on advertising service business conditions as follows:

• Comprehensive consulting on advertising service business conditions for foreign investors;
• Support investors in drafting and preparing documents for business registration;
• Representing customers to carry out registration procedures with competent state agencies;
• Consulting on issues arising during the process of providing advertising services to investors in Vietnam.

Conditions for foreign investors to operate advertising services in Vietnam play an important role in ensuring the transparency and effectiveness of the advertising industry in Vietnam. Compliance with law regulations, professional personnel, and facilities not only helps businesses operate legally but also enhances reputation and quality.  Please contact Long Phan via the hotline: 0906735386 for detailed advice from Long Phan’s experts.