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Vietnam’s Digital Economy

Vietnam’s dynamic digital economy, characterized by over 75 million social media users and a rapidly expanding online consumer base, presents lucrative opportunities for foreign investors in the advertising and digital marketing sectors. However, navigating the regulatory landscape requires a comprehensive understanding of Vietnam’s legal framework and investment procedures.

Understanding Advertising and Digital Marketing Services in Vietnam

In Vietnam, advertising and digital marketing encompass a range of services, including:

• Digital Marketing Services: Search Engine Marketing (SEM), Social Media Marketing, Content Marketing, and Search Engine Optimization (SEO).
• Creative Advertising Services: Development of creative campaigns, brand development, and influencer marketing.
• Media Buying and Planning: Purchasing advertising spaces across various media channels and analyzing audience behaviors to optimize ad placements.
• Public Relations (PR): Managing brand reputations through strategic communication efforts, including press releases, media relations, event management, and crisis communication strategies.
• Performance Marketing: Strategies focused on measurable results, including Pay-Per-Click (PPC) advertising and affiliate marketing programs.

All of the above services fall under CPC Code 871 (Advertising Services) as defined in Vietnam’s Schedule of Specific Commitments under the World Trade Organization (WTO) framework. This classification includes services related to:

• Creation and placement of advertisements in various media.
• Full-service advertising agency work.
• Market research and public opinion polling (as ancillary services in some cases).

Understanding CPC 871 is crucial for foreign investors as it determines market access conditions, licensing requirements, and restrictions under Vietnam’s international commitments.

Legal Framework and Investment Conditions

Establishing a foreign-invested advertising or digital marketing company in Vietnam involves navigating specific legal frameworks and investment conditions. Understanding these requirements is crucial for compliance and successful market entry.

Joint Venture Requirement

Under Vietnam’s WTO commitments and the Law on Advertising (No. 16/2012/QH13, Article 40), foreign investors are not permitted to establish 100% foreign-owned companies in the advertising sector. Instead, they must form a joint venture with a Vietnamese partner who is legally licensed to conduct advertising services in Vietnam.

Since January 1, 2009, there is no restriction on the foreign capital contribution ratio, meaning foreign investors can hold up to 99.99% of charter capital in the joint venture.

This joint venture model ensures that foreign investors collaborate with local entities, promoting knowledge transfer and adherence to local market practices.

Capital Contribution

While the joint venture structure is mandatory, there are no restrictions on the percentage of capital contribution by the foreign investor. Since January 1, 2009, foreign investors have been allowed to hold up to 99.99% of the joint venture’s capital .

It’s important to note that, although there’s no legally stipulated minimum capital requirement, the contributed capital must be sufficient to cover all operational expenses, including office setup, staffing, marketing, and other business activities. This ensures the company can operate effectively and sustainably in the Vietnamese market.

Vietnamese Partner Criteria

The Vietnamese partner in the joint venture must meet specific criteria to ensure legal compliance:

• Legal Establishment: The partner must be a legally established entity in Vietnam.
• Business Registration: They must possess a valid business registration certificate that includes advertising services in its registered business lines.
  Operational Experience: While not explicitly mandated, having a proven track record or experience in the advertising industry is advantageous and may facilitate smoother operations and regulatory approvals.

These criteria ensure that the joint venture operates within the legal framework and benefits from the local partner’s market knowledge and networks.

Step-by-Step Guide to Establishing the Company

Establishing a foreign-invested advertising and digital marketing company in Vietnam involves a series of legal procedures to ensure compliance with Vietnamese laws. Below is a comprehensive guide outlining each step:

1. Obtain an Investment Registration Certificate (IRC)

The Investment Registration Certificate (IRC) is a mandatory document for foreign investors initiating a business in Vietnam. It serves as official approval for the investment project and is issued by the Department of Planning and Investment (DPI) or the relevant Management Board if the project is located in an industrial or economic zone.

Application Process:

• Preparation of Documents:
  
  • Application form for investment registration.
  • Proposal for the investment project, detailing objectives, scale, and implementation schedule.
  • Financial statements or proof of financial capacity of the foreign investor.
  • Legal documents of both the foreign investor and the Vietnamese partner (if applicable).
  • Lease agreement for the business location.
• Submission:
  • Submit the application to the DPI or relevant authority.
  • The processing time is typically 15 working days from the date of receiving a complete and valid application.

2. Obtain an Enterprise Registration Certificate (ERC)

Following the issuance of the IRC, the next step is to obtain the Enterprise Registration Certificate (ERC), which legally establishes the business entity in Vietnam.

Application Process:

• Preparation of Documents:
  
  • Application form for enterprise registration.
    
  • Charter of the company.
    
  • List of members or shareholders.
    
  • Legal documents of the company’s legal representative.
    
• Submission:
  
  • Submit the application to the Business Registration Office under the DPI.
    
  • The ERC is typically issued within 3 to 6 working days upon receipt of a complete application.

3. Public Disclosure

Within 30 days of receiving the ERC, the company is required to publish its registration information on the National Business Registration Portal. This step ensures transparency and public awareness of the company’s establishment.

Procedure:

• Access the Portal:
  • Visit the National Business Registration Portal.
• Submission:
  • Complete the electronic disclosure form, providing details such as the company’s name, address, business lines, and legal representative.
  • Pay the required publication fee as stipulated by the Ministry of Planning and Investment.

Failure to comply with the public disclosure requirement within the specified timeframe may result in administrative penalties.

Compliance and Operational Considerations

Foreign-invested advertising and digital marketing companies operating in Vietnam must comply with specific legal, content, language, and tax regulations to remain in good standing. Below is a detailed overview of the key compliance obligations:

Advertising Content Regulations

Under the Law on Advertising (No. 16/2012/QH13) and its guiding decrees, all advertising content must adhere to strict rules to protect public interest and cultural values. Violations can result in fines, suspension of campaigns, or business license revocation.

Prohibited Advertising Categories Include:

• Tobacco products in any form.
• Alcoholic beverages with an alcohol content of 15% or more.
• Prescription drugs or pharmaceutical products not approved for public advertising.
• Pornographic, sexually explicit, or violent content.
• Superstitions, discriminatory content, or content offending national traditions and customs.

Key Compliance Rules:

• Advertising content must be accurate, not deceptive or exaggerated, and must not infringe upon intellectual property rights.
• Advertisements must respect the image, dignity, and honor of individuals and communities, in line with Vietnamese ethical standards.

Language Requirements

Under Article 18 of the Law on Advertising (No. 16/2012/QH13), Vietnamese must be the primary language used in all advertisements circulated within Vietnam.

Acceptable Use of Foreign Languages:

• Foreign languages may be used only when they are part of an internationally registered trademark, brand name, or slogan.
• Any translated content must accurately reflect the original meaning and be culturally appropriate.

Failure to comply with language requirements may result in administrative penalties and suspension of the advertisement.

Taxation and Reporting

Advertising and marketing businesses in Vietnam are subject to several taxation and reporting requirements:

• Corporate Income Tax (CIT): Standard rate of 20% on taxable profits.
• Value-Added Tax (VAT): Generally 10% for advertising and digital marketing services.
• Personal Income Tax (PIT): Withholding tax on salaries paid to employees, based on income brackets.
• Social Insurance Contributions: Employers must contribute to social, health, and unemployment insurance schemes on behalf of their employees.

Mandatory Financial and Tax Reporting

To operate legally and maintain business legitimacy, the company must:

• File quarterly and annual tax reports with the tax authorities.
• Submit audited financial statements (if applicable, usually required for foreign-invested enterprises).
• Ensure proper bookkeeping and accounting records in compliance with Vietnamese Accounting Standards (VAS).
• Use legally registered invoices (e-invoices) for all transactions.

Non-compliance with tax or labor laws may result in fines, tax audits, or suspension of business operations.

Cross-Border Advertising Services

Vietnam allows foreign advertising service providers (e.g., Google, Facebook, TikTok) to deliver advertising content into Vietnam without establishing a legal entity, as permitted under WTO CPC Code 871. However, such services are now regulated under Decree 70/2021/ND-CP.

Key Requirements:

• Notification: Foreign providers must notify the Ministry of Culture, Sports, and Tourism (MCST) at least 15 days prior to operation in the Vietnamese market.

• Legal Compliance: All advertisements must comply with the Law on Advertising, including restrictions on prohibited content.

• No Local Partner Required: Cross-border advertisers are not obligated to partner with local agencies but must ensure content control systems are technically compatible with Vietnam’s regulations.

• Potential Tax/Reporting Obligations: If revenue is generated in Vietnam, the provider may be subject to tax and data reporting under the Law on Tax Administration and Cybersecurity Law.

Failure to notify or comply may lead to fines, content blocking, or IP-level restrictions by the authorities.

How Green NRJ Can Assist You

At Green NRJ, we provide professional and comprehensive support for foreign investors looking to establish advertising and digital marketing companies in Vietnam.

We are not a joint venture partner, but a business consulting firm that supports investors through the entire company formation process — from strategy to setup and compliance.

✅ Our Services Include:

• Legal consulting on investment forms and advertising regulations
  
• Guidance on forming joint ventures with qualified Vietnamese partners
  
• Preparation and submission of IRC and ERC applications
  
• Business line classification under CPC codes (such as CPC 871)
  
• Drafting and reviewing company charters and joint venture contracts
  
• Assistance with tax registration, licensing, and post-setup compliance
  
• Ongoing support with accounting, labor, and operational procedures
  

With deep expertise in Vietnamese business law and foreign investment, Green NRJ ensures your setup process is smooth, compliant, and efficient — helping you focus on growth from day one.

📩 Contact Green NRJ today to receive a personalized consultation and get started with your investment in Vietnam’s high-potential advertising sector.

Conclusion

Establishing a foreign-invested advertising and digital marketing company in Vietnam presents major opportunities. Despite the joint venture requirement, the lack of capital limits offers significant control to foreign investors. With clear legal understanding and compliance, investors can succeed in Vietnam’s digital landscape.

For tailored support, consult with professionals like Green NRJ who specialize in foreign investment and business setup in Vietnam.