Profile
Vietnamese
Consulting on Trade Promotion Contracts
The role of trade promotion is to establish as well as strengthen international links and cooperation within the region and the world. At the same time, expanding import and export markets, thereby helping to promote economic development as well as provide a comfortable life for all people. So to start trade promotion, it is necessary to create and sign a trade promotion contract. Please refer to the article below to understand what you need to know about trade promotion contracts.
What is a trade promotion contract?
According to the concept of economics, “trade promotion” includes not only activities of merchants to promote trade development, but also activities to promote commercial development of other organizations and the government.
From a legal perspective and within the framework of commercial law, the concept of “commercial promotion” is also clearly defined in Article 2 of the Vietnam Commercial Law 2005: “is an activity to promote and seek goods and service trading opportunities, including promotional activities, commercial advertising, display and introduction of goods and services, and trade fairs and exhibitions.” Therefore, it can be understood that trade promotion is an activity for profit purposes carried out by traders in order to develop, seek investment opportunities, buy and sell goods, as well as provide services. In particular, the law also clearly stipulates that trade promotion activities are promotional activities, commercial advertising, display and introduction of goods and services, and trade fairs and exhibitions.
“Trade promotion contract” means an agreement of the parties (traders, organizations, governments) on the creation, change or termination of the rights and obligations of the parties in the contract relating to trade promotion activities.
What are the conditions for conducting trade promotion?
There are many conditions for implementation of trade promotion specified in Decree 81/2018/ND-CP on the discount rate of goods and services being promoted, the value limit of goods and services, etc.
Notable content of Decree 81/2018/ND-CP has just been issued related to the organization of promotional programs that are released by the hour, by day, by week, by month, by campaign season, promotions, the maximum discount is increased to 100% of the price of goods and services instead of 50% as before. The 100% discount promotion limit is also applied to promotional activities included in trade promotion programs and activities under the Prime Minister’s decision.
In addition to the above limits, the limit for promotion and discount must not exceed 50% of the unit price of the promoted goods and services before the promotion period. In addition, according to this Degree, the maximum discount rate will not be applied to the following promotions and discounts: Goods and services in the implementation of the national price stabilization policy; fresh food; goods and services in case the company is dissolved, bankrupt, changes location, production or business.
What types of trade promotion are there in Vietnam?
Promotion (Khuyến mại): is the activity of promoting the sale of goods or provision of services by providing some benefit to the customer. Promotional initiatives (or opportunities to provide customers with some benefit) are also diverse, for example, discount codes, gifts, premium coupons or offers, get additional goods when purchasing a certain number of items or receive incremental discounts, especially for customers who buy in bulk at distributors, retailers… Not only that, promotions are also to introduce new products, improved products, stimulate consumption, attract customers and increase sales. However, the principles that promotional activities need to follow include: Honesty, publicity, transparency; Non-discrimination; No promotion of medical drugs; Always ready to support customers; Quality assurance of goods and services; Do not abuse the trust of customers and partners; Healthy competition.
Display (trưng bày): is the activity of informing customers about the company’s products and services by means of documents related to products and services and to promote business. Popular display activities are opening showrooms and introducing goods and services; Organizing conferences and seminars with display and introduction of goods and services; Displaying and introducing goods and services at trade centers or in entertainment, sports, art or on social networks and other legal forms as prescribed by law. Using this method, sellers provide customers with information about their products. Places to display and introduce products include: shopping mall showrooms; trade fairs; conferences; seminars; entertainment, sports, art and cultural activities. Being a tool to provide product information to customers for the purpose of promoting transactions and displaying and introducing products with the nature of sales promotion activities. However, Vietnamese law stipulates that this is a form of independent advertising trade.
Commercial advertising (Quảng cáo thương mại): is the product introduction by traders through advertising means such as mass media, publications, banners, panels, etc. The purpose of advertising is to inform customers about the types, features, benefits, prices of products and services, thereby stimulating customers’ demand to buy and use services. Traders also use promotional tools belonging to the trade network such as: Company name, trademark and brand, branded packaging. Popular means of advertising are: mass media; communication media; publications of all kinds; signs, billboards, posters, means of transport (buses, taxis, …) and other vehicles permitted by law.
Trade fairs and exhibitions (Hội chợ, triển lãm thương mại): is a form of trade promotion anytime, anywhere that allows traders to display their goods for the purpose of marketing, selling and creating commercial transactions. An exhibition fair is a trade promotion activity carried out through the display of goods (by topic, time, location, specific scope) for the purpose of introducing and promoting products to customers. When participating in fairs, the main purpose of traders is not to sell on the spot but to introduce and advertise products to stimulate demand for their products. Exhibition is where sellers and buyers directly buy and sell. Traders display their products at trade shows not only for the purpose of showcasing their products, but also for marketing, spot selling and closing, among many other purposes. In addition, fairs are held regularly at specific places and times. This feature is not often seen at trade shows. In fact, fairs and trade shows are often held together, so they are sometimes referred to collectively as “trade shows and fairs”. The interesting point is that it is possible to organize trade fairs and exhibitions in foreign countries and in Vietnam in accordance with the law.
When does the trade promotion contract take effect?
A contract is only valid if it is the result of a formal agreement of the parties’ intentions. When entering into a commercial contract, the parties must be completely voluntary and not subject to the pressure of others such as the pressure of a partner or the pressure of a third party. In addition, depending on the agreement of the parties, the parties to the contract can stipulate the effective time of the contract, for example, the effective time of the contract can be immediately after the contract is signed or 6 days after the contract is signed.
In Vietnam, do the parties have the right to unilaterally terminate the trade promotion contract?
Yes, they do. However, the parties need to notify the other party within thirty (30) days in advance.
Trade Promotion Contracts Service by Siglaw:
Siglaw Firm will provide customer with the following advantages:
- Incentives: Siglaw is one of the leading law firms in Vietnam, with a team of experienced lawyers and legal experts in the field of consulting and drafting commercial promotion contracts. We are committed to providing our customers with dedicated and effective support and meeting all their needs in the process of consulting and drafting trade promotion contracts.
- Experience: many years of experience in the legal field, we are proud to be one of the leading units in providing investment consulting services, including consulting on drafting trade promotion contracts. We always update and grasp the latest legal situation, helping customers make accurate and fast decisions.
- Siglaw’s team: Siglaw’s team of lawyers consists of highly qualified experts and long-term experience in solving legal issues related to all fields. We are capable of providing the most suitable solutions, managing contract risks to help customers easily and conveniently in contract implementation.
- Cost: The cost of consulting and drafting a trade promotion contract depends on the following factors: scope of service, complexity, time, number of contract pages,… The cost ranges from 1,500,000 VND and above. We are committed to providing services at the most reasonable and competitive cost. We will talk directly with you about the necessary expenses before starting work, so that you can have better control over your budget and financial plan.
Above is advice from the staff of Siglaw Law Firm on commercial promotion contracts. If you have any problems that need to be solved, please contact Siglaw for free support in the fastest way.
Phone: (+84) 961 366 238
Email:
- vphn@siglaw.com.vn
- vphcm@siglaw.com.vn
Headquarters: Floor 12A Sao Mai Building, 19 Le Van Luong Street, Nhan Chinh Ward, Thanh Xuan District, Hanoi City.
Southern branch: No. 99 Cong Hoa, Ward 04, Tan Binh District, Ho Chi Minh City.
Central branch: 177 Trung Nu Vuong, Hai Chau District, Da Nang City
Facebook: https://www.facebook.com/hangluatSiglaw
