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Conditions for foreign investor to invest in advertising industry in Vietnam

With the continuous development of technology, the advertising industry is growing strongly, attracting not only domestic enterprises but also foreign investors. Joining WTO, Vietnam commits to open advertising industry, allows foreign investors to operate advertising industry in Vietnam.

According to Vietnam's commitments when joining the WTO as well as the provisions of the Law on Advertising 2012, foreign investors can invest in three forms:

1. Establishing a joint venture with Vietnamese partners;

2. Signing a business cooperation contract (BCC) - contracts are signed between investors for business cooperation to distribute profits and products without establishing an economic organization;

3.Purchasing capital/contribute  an existed advertising company. Notably: 100% foreign-owned advertising company is not allowed in Vietnam.
 
If foreign investors decide to establish a joint venture or buy existing equity in a local company, the limit of holding proportion is the first condition of which they should be aware. Based on Vietnam’s commitments to the WTO, foreign-owned capital is not limited in an advertising company (cooperation with Vietnam partners are required), which means foreign investors are permitted to own the charter capital at any rate but less than 100%. In the case that foreign investors choose to enter into a BCC, Vietnamese partners have to be certified to do business in advertising industry.

Also, a foreign investor who intends to invest in Viet Nam have to be an individual or an organization that is granted an investment certificate, with valid papers to prove legal status (establishment decisions, enterprise certificates issued by competent authorities of investor’s nations).

About the content of the advertisement, cigarettes are completely prohibited to be advertised in any form by foreign investors. Foreign-invested companies in Viet Nam are allowed to advertise liquor that the rate of alcohol must be under 15 degrees, according to Law on Advertising 2012. Besides, there are still more products that are banned, advertising company should pay attention to those, such as: goods that are not allowed to be traded; hunting gun and bullets, sporting weapons and products inciting violence;……(Law on Advertising 2012)

Although some products are not restricted but when doing advertisement for those, investors still have to comply with Vietnamese laws. For example: nutritious products for kids ( Decree 100/2014/NĐ-CP on trading in and use of nutritious products for infants, feeding bottles and teats), products under the management of the Ministry of Health such as drugs, cosmetics, medical equipment (Circular 09/2015/TT-BYT stipulating the approval for contents of advertisements for special products, commodities and services under the authority of the Ministry of Health).
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