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Establish foreign-owned advertisement company
Conditions for setting up a foreign-owned advertisement company
It can be seen that advertising is not in the case of industries banned from business investment under Article 6 of the Investment Law 2020 such as drug trafficking, prostitution, firecracker business, debt collection services, etc.
However, for reasons of national defense, security, social order and safety, social ethics, and health of the community, advertising belongs to a conditional business sector as prescribed in Section No. 157 Appendix IV of the Law on Investment 2020.
Specifically, according to the provisions of Vietnam’s commitments in the WTO on trade in services, the Investment Law 2020, the Law on Advertising 2012, and the Law on Enterprises 2020, if foreign investors want to contribute capital to business advertising services, they must meet the following conditions:
- Conduct a joint venture with a Vietnamese partner, in which the foreign investor’s capital contribution can be any ratio below 100%, or cooperate under a business cooperation contract. The reason for this ratio is that since January 1, 2009, Vietnam has not committed to allow the establishment of an Advertising Company with 100% foreign investment capital.
- The Vietnamese partner in a joint venture must be an enterprise that has registered to provide advertising services.
- Not allowed to advertise banned products, goods and services, including: goods and services banned from business; cigarette; alcohol with an alcohol content of 15 degrees or more; milk substitutes for breast milk for infants under 24 months of age, nutritional supplements for infants under 6 months of age, feeding bottles and artificial nipples; prescription drugs, non-prescription drugs that are recommended by a competent state agency to be restricted or used under the supervision of a physician; aphrodisiac products; shotguns and shotgun ammunition, sports weapons and products that incite violence and other products, goods and services banned from advertising as prescribed by the Government when they arise in reality.
- In addition, in the case of advertising alcohol, foreign investors must comply with the regulations of the State of Vietnam on a non-discriminatory basis.
Procedures and documents for establishing a foreign-owned advertisement company
There are two ways to invest in establishing a foreign-invested advertising company in Vietnam:
- Establishing a new foreign-invested economic organizations;
- Or contribute capital, or purchase shares/capital into economic organizations providing advertising services.
Method 1: Establishing a new foreign-invested economic organizations
Step 1: The investor applies for an Investment Registration Certificate. Dossier to apply for an Investment Registration Certificate:
- A written request for implementation of an investment project;
- Documents proving investor’s legal status such as: copy of identity card or identity card or passport (if individual); copy of the certificate of establishment of an advertising company with foreign capital or equivalent documents and the passport of the capital manager (if an organization);
- Proposing investment projects. Including the following contents: investor implementing the project, objectives, scale and investment capital, capital mobilization plan, location, duration, investment progress, labor demand, proposal for benefits investment incentives, assessment of the project’s socio-economic impacts and efficiency; information on the current status of land use at the project site and the proposed land use demand (if any); preliminary assessment of environmental impacts (if any) in accordance with the law on environmental protection
- Documents proving the financial capacity of the investor. Including at least one of the following documents: financial statements of the last two years of the investor; commitment to financial support of the parent company; financial institution’s commitment to financial support; guarantee on the financial capacity of the investor; other documents proving the investor’s financial capacity;
If the construction law provides for the preparation of a pre-feasibility study report, the investor may submit a pre-feasibility study report instead of the investment project proposal;
- In case the investment project does not request the State to allocate or lease land or permit the change of land use purpose, a copy of the paper on land use rights or other documents determining the right to use the site shall be submitted for implementation. current investment project;
- The explanation of the technology used in the investment project, for the project subject to appraisal and consultation on technology in accordance with the law on technology transfer;
- Other documents related to the investment project, requirements on conditions and capacity of the investor as prescribed by law (if any);
- Power of Attorney for Siglaw.
Competent authorities: Department of Planning and Investment where the investor implements the investment project, locates or plans to set up an executive office.
Total time: Within 15 days from the date of receipt of a complete and valid application, the Department of Planning and Investment will issue an Investment Registration Certificate to the foreign investor. In case of refusal, the Department must reply in writing and clearly state the reason.
Step 2: Set up a foreign-invested advertising company in Vietnam
Dossier to establish an advertising company with foreign capital:
- Business registration application form;
- Company charter;
- List of founding shareholders and shareholders being foreign investors (if it is a joint stock company); List of members (if it is a two-member limited liability company);
- Certified copy of identity card or citizen identification card or passport (if an individual); a decision on the establishment of an advertising company with foreign capital, a certificate of business registration or an equivalent document and a citizen identification card or people’s identity card or passport with a written authorization for the capital manager in Vietnam (if an organization);
- A certified copy of the issued Investment Registration Certificate;
- Power of Attorney for Siglaw Law Firm.
Competent authorities: Department of Planning and Investment where the enterprise’s head office is located
Total time: 03 – 06 working days
NOTE:
Disclosure of business registration information:
- After being granted an enterprise registration certificate, an enterprise must make a public announcement on the National Business Registration Portal and pay fees as prescribed by law. The content to be announced includes the contents of the Certificate of Business Registration and information on: Business sector; List of founding shareholders; list of shareholders being foreign investors in the case of a joint-stock company (if any).
- Publishing fee: The request for announcement of enterprise registration contents and payment of the fee for announcement of enterprise registration contents shall be made at the time the enterprise submits the enterprise registration dossier. In case the enterprise is not granted business registration, the enterprise will be refunded the fee for announcing the business registration content. Publication fee is 100,000 VND (according to Circular 47/2019/TT-BTC)
Company seal:
- A company seal includes a seal made at a seal engraving establishment or a seal in the form of a digital signature in accordance with the law on electronic transactions.
- The enterprise shall decide on the type, quantity, form and content of the seal of the enterprise, its branches, representative offices and other units.
- The management and keeping of the seal shall comply with the provisions of the company’s charter or regulations issued by the enterprise, branch, representative office or other unit of the enterprise with the seal. Enterprises use seals in transactions as prescribed by law.
Method 2: Contribute capital, or purchase shares/capital into economic organizations providing advertising services.
This method will help investors save more time and costs because they do not have to apply for an Investment Registration Certificate. However, investors must ensure the proportion of capital contribution of foreign investors in accordance with regulations. If choosing this method, investors only need to carry out the procedures for registration of capital contribution, purchase of shares/capital at the Department of Planning and Investment. In addition, for activities that foreign investors are not allowed to carry out, it is necessary to consider and implement procedures to reduce the business sectors.
Step 1: Foreign investors register to contribute capital, or purchase of shares/capital to economic organizations
Dossier for registration of capital contribution, share purchase or capital contribution:
- A written registration for capital contribution, or share/capital purchase includes the following contents: information on business registration of the economic organization to which the foreign investor intends to make a capital contribution, or share/capital purchase; business sectors; list of owners, members, founding shareholders, list of owners, members, shareholders being foreign investors (if any); rate of ownership of charter capital of foreign investors before and after capital contribution, or share/capital purchase to economic organizations; expected transaction value of the contract of capital contribution, share purchase, purchase of contributed capital; information on investment projects of economic organizations (if any);
- Copies of legal documents of individuals and organizations capital contribution, or share/capital purchase and economic organizations with foreign investors contributing capital, or purchasing share/capital: Passport (if applicable) is an individual); Business license or equivalent document and Passport of the person authorized to manage the capital portion in Vietnam (if an organization);
- Written agreement in principle on capital contribution, or share/capital purchase between foreign investors and economic organizations in which foreign investors contribute capital, purchase shares/capital or between investors foreign investment with shareholders or members of that economic organization;
- A copy of the certificate of land use rights of an economic organization in which foreign investors contribute capital, purchase shares or purchase capital contributions, if such economic organization has a certificate of land use right in the island, commune, border wards and towns and coastal communes, wards and towns; Other areas affecting national defense and security, except for economic organizations implementing investment projects in industrial parks, export processing zones, hi-tech parks and economic zones established under the Government’s regulations. .
- Power of Attorney for Siglaw Law Firm.
Competent authorities: Department of Planning and Investment where the economic organization’s head office is located.
Total time: within 15 days from the date of receiving complete dossiers. In case the application does not meet the conditions, the Department of Planning and Investment will notify in writing and clearly state the reason.
Step 2: Carry out procedures for transferring shares/capital and changing shareholders, members, and owners.
Dossier for transfer of shares
- Decision of the General Meeting of Shareholders on the transfer of shares;
- Minutes of the General Meeting of Shareholders on the transfer of shares;
- List of founding shareholders of joint-stock companies;
- Charter of the company (amended and supplemented);
- Share transfer contract;
- Minutes of liquidation of share transfer contract;
- Share certificates of company shareholders;
- Register of shareholders.
Transfer of shares by shareholders in the following order:
- Hold a meeting of the General Meeting of Shareholders to make a decision on the transfer of shares;
- Related parties sign and perform share transfer contract;
- Make minutes and sign the minutes of liquidation of the transfer contract;
- Edit and supplement information of shareholders in the register of shareholders of the company.
After transferring shares, make personal income tax (PIT) declaration:
- Prepare the following documents: Declaration form No. 04/CNV-TNCN issued with Circular No. 92/2015/TT-BTC (if an individual directly with the tax authority) or Declaration form No. 06/CNV – Personal income statement issued together with Circular No. 92/2015-BTC (if individuals adopt enterprises); Share transfer contract; A photocopy of the business registration certificate; and some other papers if required: Shares, receipts, power of attorney, true copy of personal identification papers of the transferor, register of shareholders.
- File a tax return at the Tax Department or the tax administration agency directly of the enterprise.
- Time limit for filing tax return: Up to 10 days after signing the share transfer contract, the individual must submit a personal income tax return to the tax authority of the enterprise.
- In case an enterprise pays tax on behalf of an individual, the time to submit a tax return is before carrying out the procedures for changing the list of shareholders in accordance with law.
- The deadline for paying PIT is the deadline for submitting the PIT return. PIT money is paid to the State Treasury at banks (Agribank, Vietinbank…).
Note: Shareholders transferring shares must have a personal tax identification number to submit the PIT return.
Note about prohibited acts in advertising activities
According to Article 8 of the Law on Advertising 2012, prohibited acts in advertising activities are:
- Advertise the products, goods and services specified in Article 7 of this Law.
- Advertisements that reveal state secrets, prejudice national independence, sovereignty, security and national defense.
- Advertising lacks aesthetics, contrary to the historical tradition, culture, morality, fine customs and traditions of Vietnam.
- Advertising affects urban beauty, traffic order and safety, and social safety.
- Advertising adversely affects the sanctity of the National Flag, National Emblem, National – Anthem, Party Flag, national heroes, cultural celebrities, leaders and leaders of the Party and State.
- Ads that are ethnically discriminatory, racist, infringing on freedom of belief or religion, prejudice against gender, or people with disabilities.
- Ads that offend the prestige, honor and dignity of organizations and individuals.
- Advertisements using images, words, or writings of an individual without the individual’s consent, unless otherwise permitted by law.
- Incorrect or misleading advertisement about the business ability, the ability to provide products, goods and services of organizations and individuals trading in products, goods and services; on quantity, quality, price, utility, design, packaging, trademark, origin, type, service method, warranty period of registered or registered products, goods and services to be announced.
- Advertise by using the method of direct comparison of prices, quality, and efficiency in using their products, goods and services with prices, quality, and efficiency in using products and goods, services of the same type of other organizations or individuals.
- Ads that use the words “unique”, “unique”, “best”, “number one” or words with similar meanings without legal documents proving it according to regulations of the Ministry of Culture , Sports and Tourism.
- Ads with unfair competition content in accordance with the law on competition.
- Advertisements violate intellectual property laws.
- Advertising for children with thoughts, words and actions contrary to morality, fine customs and traditions; adversely affect the health, safety or normal development of children.
- Forcing agencies, organizations or individuals to advertise or receive advertisements against their will.
- Hang, place, paste, draw advertising products on electric poles, poles, traffic signal poles and trees in public places.
Legal basis
- Investment Law 2020;
- Law on Advertising 2012;
- Vietnam’s WTO Commitments on Services;
- Decree No. 31/2021/ND-CP dated March 26, 2021;
- Decree 70/2021/ND-CP dated 20/07/2021.
For a comprehensive free consultation, please contact:
Siglaw Law Firm
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
Hotline: 0961 366 238
Phone: (+84) 961 366 238
Email:
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
