Advertising Law

This article is written and provided by: Roedl & Partner.
About the firm and author

Introduction

The Advertising Ordinance dated 16 November 2001 and its implementing guidelines are the main source for advertising law in Vietnam. The principal regulatory bodies for advertising activities are the Ministry of Information and Communications and the Ministry of Industry and Trade. The industry body of advertisers is the Vietnam Advertising Association (VAA).

Beyond restrictions applicable to a given product, medium, or methodology, note that advertising which is “contrary to the traditions, history, culture, ethics, or fine customs of the Vietnamese people” is illegal.

Foreign Companies in Vietnam

Foreign investments (e.g. the setting up of a company with one or several foreign shareholders) require a permit from the authorities (a so-called “investment certificate”). Some sectors are open to companies with 100 percent foreign ownership, others require a Vietnamese joint-venture partner, and in some sectors foreign investment is completely prohibited. Depending on the sector and the investment amount, the foreign investor has to go through either the registration procedure or the evaluation procedure. In both procedures, the licensing authorities review the viability of the project, but the evaluation procedure is more complicated, with the local licensing authority having to obtain approval from one or more ministries in Hanoi.

Vietnam is still a command-driven economy, although a certain amount of liberalization can be observed, especially since Vietnam’s accession to the WTO in 2007. Companies marketing goods in Vietnam have to bear in mind that the government has the power to fix prices of goods to curb inflation (which was around 19 percent in 2011) and that there is a certain tendency on the side of the government to discourage the use of imported (luxury) goods to reduce the trade deficit.

Foreign Advertising Companies in Vietnam

Foreign advertising companies wishing to operate in Vietnam have to set up a joint venture with a Vietnamese partner and obtain their investment certificate through the evaluation procedure. 100 percent foreign-owned subsidiaries are not permitted in the advertising sector. There is no minimum requirement as to the ratio of Vietnamese ownership in the joint-venture company in the law, but one would expect it to be very difficult if not impossible to obtain an investment certificate if there is only a mere token Vietnamese ownership.

According to the law, foreign advertising companies can also operate through a branch, although this requires that the company has had a representative office in Vietnam for at least seven years. A foreign advertising company may set up a representative office in Vietnam. However, the representative office may only promote the interests of its headquarters and not engage in any profit-generating activities.

Companies may deduct their advertising costs as business expenses only up to a cap of 10 percent (15 percent in their first three years of operation) of their total business expenses.

Products and Services Banned From Advertising

Legal Services

Advertising prohibited by rules of professional conduct

Political Messages

Prohibited

Prescription Medications

Advertising prohibited (Art. 3 no. 8 Decree 24/2003/ND-CP)

Products Related to Sexuality

Advertising prohibited (sale of pornographic material is prohibited; restrictions apply with regard to condoms; advertising of sex toys would probably not be tolerated in practice)

Products and Services Banned from Business

Products

The following products are banned from business in Vietnam and thus are also banned from advertising:

• Weapons, military equipment and technical facilities, ammunition and specialized facilities for the army and police; military paraphernalia (including badges, medals and insignia of the army and police); accessories, and materials and technology used to manufacture the former items
• Drugs of addiction
• List I chemicals as stipulated in international treaties
• Products of “reactionary culture” and pornographic products; products serving superstitious purposes or products which are harmful to personal development
• All types of firecrackers
• Games and toys (including electronic games) that are harmful to the personal development and health of children or to the security, order and safety of society
• Veterinary medicine and plant protection agents which are prohibited or not yet permitted to be used in Vietnam pursuant to the Ordinance on Veterinary Medicine and the Ordinance on Protection and Quarantine of Plants
• Aquatic products which are prohibited from use; aquatic products containing toxic chemicals in excess of the permissible limits; and aquatic products containing life-endangering natural toxins
• Fertilizers not on the list of fertilizers permitted to be manufactured, traded, and used in Vietnam
• Plant varieties not on the list of plant varieties permitted to be manufactured and traded; plant varieties which are harmful to human health, animal genetic sources, the environment, or the ecosystem
• Animal breeding varieties not on the list of breeding varieties permitted to be produced and traded; breeding varieties which are harmful to human health, animal genetic sources, the environment, or the ecosystem
• Specially toxic minerals
• Imported scrap linked to environmental pollution
• All types of curative medicines for people, all types of vaccine, biological products, cosmetics, chemicals, and products for the extermination of insects and bacteria used in homes and in medicine generally which are not yet permitted to be used in Vietnam
• Foodstuff additives, preservatives which assist processing, nutritional substances, functional foodstuffs, high-risk foodstuffs, foodstuffs protected by radioactive means, and foodstuffs containing transformed genes not yet permitted by the competent state body
• Products and materials containing ammonium in the amphibole group
• Smuggled cigars, cigarettes, and other processed tobacco products

Services

The following services are banned from business in Vietnam and thus are also banned from advertising: 

• Brothels, organizing prostitution, trafficking in women and children
• Organized gambling
• Investigation (private detective) services
• Marriage brokerage involving a foreign element for profit-making purposes
• Adoption brokerage involving a foreign element for profit-making purposes

Regulations Related to Product and Service Advertising

Alcohol 

Beer

No current restrictions

Wine

Wine with an alcohol content of 15 percent or less may be advertised only in the printed or electronic press. The company wishing to advertise must provide its alcohol manufacturing or trade license to the advertising agency.

Wine and Spirits with Higher Alcohol Content

Wine and spirits with an alcoholic content of more than 15 percent may be advertised only within the boundaries of the factory or shops selling such beverages and provided that people outside these boundaries are not able to see or hear the advertisement.

Firearms, Weapons, and Ammunition

Advertising prohibited (see list of Products banned from business)

Food

Food must comply with quality standards set by the Ministry of Agriculture and Rural Development and the Ministry of Health. It is advisable to check with the Ministry of Health or the regional Health Department whether advertising a specific food product requires a permit. Milk for infants under 12 months may not be advertised at all. Advertisements for milk for infants between 12 and 24 months must be accompanied by a statement that “breast milk is the best food for the health and growth of infants.”

Nutritional Claims

No explicit restriction names nutritional claims, but such claims will constitute deceptive advertising if the claims are wrong. Advertisers will also have to check carefully whether the specific advertisement requires approval by the Ministry of Health or the regional Department of Health.

Gaming

Gambling (e.g. card games for money; roulette) is prohibited with the exception of slot machines in hotels catering to foreign tourists. Private competition with the state lottery is not allowed. Certain pastimes with an aleatory element, such as predicting the results of sports events, horse races, and dog races, are, within limits, permitted, and so is advertisement for these events.

Legal Services

Advertising prohibited (see Products and Services Banned From Advertising)

Medical Devices

The medical device must be allowed for circulation in Vietnam. Companies wishing to advertise medical devices must submit to the Ministry of Health or the regional Health Department an application including evidence verifying the contents of the advertisement. The advertisement must state the following, among other elements:

• Name and import certificate number of the product
• Its function, effect, and usage
• The manufacturer and the entity that provides repair and maintenance services

Medical Services

The treatment method must be allowed by the Ministry of Health, and the person carrying out the treatment must have the professional qualification to do so. An entity wishing to advertise medical services must submit to the Ministry of Health or to the regional Health Department an application including evidence that the entity fulfills professional standards. The advertisement must state the following:

• The scientific basis of the treatment
• Name, address, and phone number of the individual or organization offering the service
• Additional information spelled out in respective legislation if pharmaceuticals, vaccine, or medical devices are advertised together with the services

Nonprofit Fundraising

Political activities challenging the supremacy of the Communist Party are prohibited. Only registered charities may solicit donations.

Nutritional Supplements

Companies wishing to advertise nutritional supplements have to submit an application to the Ministry of Health or the regional Health Department showing, among other elements, that the products meet the standards set by the Ministry of Health. The advertisement must state, among other elements:

• The registered attributes of the product
• Guidance on usage and storage
• Manufacturer and distributor

Further restrictions apply to products replacing breast milk (see Food, above).

Occult (“Psychic”) Services

The provision of these services is illegal in most cases.

Pharmaceuticals

The pharmaceuticals must be approved by the Ministry of Health. Companies wishing to advertise pharmaceutical products have to submit to the Ministry of Health or regional Health Department an application including evidence verifying the contents of the advertisement. The advertisement must contain, among other elements:

• Product name
• Name of its active ingredient
• Detailed information as to the effect and usage of the product
• Manufacturer
• Advice to read the information and directions for use

Pharmaceuticals sold under prescription of a doctor may not be advertised, as noted under Products and Services Banned From Advertising.

Political Messages

Advertising prohibited (see Products and Services Banned From Advertising)

Products Related to Sexuality

Advertising prohibited (see Products and Services Banned From Advertising)

Religion

Advertising in practice not tolerated

Sex (Adult) Services

Advertising prohibited (see list of Services banned from business)

Tobacco Products 

Advertising illegal, with the exception of the display of the product itself in the shop

Toys

No current restrictions

Regulations Related to Advertising Methodology

Advertising to Children 

Advertisements directed at children must not include the following:

• Information which could cause children to lose faith in their parents or society
• Information which directly suggests that children should ask their parents to purchase the advertised goods or services
• Information which could persuade children that if they use the advertised goods or services they will have an advantage over children who do not use such goods or services
• Information which could incite children to thoughts, speech, or actions which are contrary to ethical traditions

Advertorials 

Advertising that looks like editorial is prohibited, but common in practice.

Celebrity Endorsements

No current restrictions

Comparative Advertising

Advertisements that compare the advertiser’s product to that of a competitor are prohibited.

Contests 

Contests require prior notification of the regional Department of Industry and Trade; the award of the prizes must be witnessed by a “representative of customers.” A written report about the winning results must be forwarded to the regional Department of Industry and Trade, and the winning results must be announced in at least one form of mass media.

False, Deceptive, or Misleading Advertising

Deceptive advertising is, not surprisingly, illegal and may result in fines which are, however, rather moderate by Western standards. Advertising containing misleading information, in particular about commercial names, business slogans, business logos, packaging, and geographical indications, is prohibited. Deceptive advertising means acts of providing false or misleading information, specifically with regard to any of the following items:

• Price
• Quantity
• Quality
• Usage
• Design
• Type
• Packaging
• Date of manufacture, use expiry
• Origin of goods
• Manufacturer
• Place of manufacture
• Processor or place of facilities
• Manner of use
• Method of service
• Warranty period

Disguised Ads 

Disguised ads are prohibited, but common in practice.

Free Gifts/Samples

Distribution of free gifts or samples requires prior notification of the regional Department of Industry and Trade if part of a promotional campaign.

Limits to Free Speech

It is not advisable to make political statements in advertising. The Law on Competition prohibits companies from defaming competitors.

Length of Commercial, Volume, and Similar Restrictions

The following restrictions apply to specific media. Exceptions may be granted by the authorities.

Printed press

10 percent of the total space with the exception of specialized advertising newspapers

Radio

5 percent of the time volume of the program; entertainment programs must not be interrupted more than 4 times and not for more than five minutes each time; advertisements in excess of 10 minutes require a permit by the Ministry of Information and Communications.

Television

Same as radio. A movie shown on TV may not be interrupted more than twice and not for more than five minutes each time.

Electronic Media

25 percent of the total space

Rights of Privacy

Rights of privacy are contained in several legal instruments, in particular the Civil Code, Criminal Code, Consumer Protection Law, and Vietnam’s laws pertaining to e-commerce and the IT sector which prohibit the collection and disclosure of personal information without the person’s consent.

Product Demonstrations

No current restrictions

Regional Public and/or Community Standards

No specific restriction. However, advertising for products which are on a state-issued list of goods requiring quality inspection requires the manufacturer to provide the quality certificate to the advertising service provider. Advertising which is “contrary to the traditions, history, culture, ethics, or fine customs of the Vietnamese people” is illegal.

Rebates

No current restrictions, with the exception that discounts during promotional campaigns may not exceed 50 percent of the previous price. Promotional campaigns must be notified to the regional Department of Industry and Trade in advance.

Sex in Advertising

Prohibited

Sponsorships

It is advisable to check with the regional Department of Industry and Trade whether the specific sponsorship requires a permit. Sponsorship by tobacco companies is illegal. Restrictions with regard to the promotion of wine and spirits apply to liquor companies.

Subliminal Advertising

Prohibited

Sweepstakes Offers

A sweepstakes is an event in order to promote a product. In order to attract potential buyers, the organizer promises prizes; the winners are drawn from the holders of entrance tickets for the event. Such an event will regularly require prior approval (mere notification is not enough) by the Ministry of Industry and Trade or the regional Department of Industry and Trade.

Telemarketing

No regulations explicitly concern sales over the phone, but unsolicited calls could constitute (illegal) harassment. Consumers may rescind a contract concluded over the phone within 10 days.

According to Decree 90/2008/ND-CP, no entity other than an advertising service provider may send a marketing SMS without the prior approval of the recipient. A first message to ask for approval should be allowed, although the circular guiding the implementation of the decree is not entirely clear on this issue. The law does not distinguish between recipients who are business entities and recipients who are private individuals.

Advertising service providers may send out promotional SMS for their customers provided that they comply with the following:

• Their information infrastructure is registered with the Ministry of Information and Communications
• The message is labeled as advertising and includes information about the advertising service provider
• There is an opt-out option

Testimonials

No current restriction

Tie-In Offers

A tie-in offer is an offer by which a company sells product A only together with product B. Such offers are prohibited if the company has a dominant market position and products A and B are not related.

Use of a Public Person's Image or Name

The consent of the public person is required. No other restrictions apply, except that the use of images of state or Party leaders is prohibited.

Use of Children in Advertising

No current restriction

Use of Foreign Language in Advertising

The spoken or written text of an advertisement must be in Vietnamese, except in the case of:

• Words which have become internationally known
• Commercial names
• Words which cannot be translated into Vietnamese
• Advertisements in books, newspapers, printed matter, or radio and televisions programs in foreign languages

Use of Models as Doctors, Nurses, Lawyers, or other Professionals

No current restriction, with the exception that these models must not pose as health care professionals who really exist.

Violence in Advertising

Prohibited

Other Regulations Particular to Vietnam

No advertising is allowed using the national flag, the flag of the Communist Party, the national emblem, the national anthem or its melody, images of state or Party leaders, images of the Vietnamese currency, or images of traffic signals or traffic notices.

Regulations Related to Media Channels

Billboard Advertising

Advertising on billboards requires prior approval (a permit) from the Department of Culture, Sports, and Tourism. The advertisement must state the number and duration of the permit and the name of the applicant. It must not block other advertising whose permitted duration has not yet expired or impede or endanger traffic, and it must comply with urban planning. The permit is valid for a maximum period of 3 years.

Digital Media Advertising

Online advertisements must to be sent to the Department of Information and Communications at least 10 working days in advance. Approval is deemed to have been granted if the Department has not replied to the contrary within five working days. Advertisements must not cover more than 25 percent of the site.

Direct Mail Advertising

No current restriction

Email Advertising (Spam)

Email advertising must comply with anti-spam regulations. According to Decree 90/2008/ND-CP Against Spam, no entity other than an advertising service provider may send emails without the prior approval of the recipient (a first message to ask for approval should be allowed, although the circular guiding the implementation of the Decree is not entirely clear on this issue). The law does not distinguish between recipients who are business entities and recipients who are private individuals. It is safe to say that the law is widely ignored in practice.

Advertising service providers may send out promotional emails for their customers provided they comply with all of the following:

• Their information infrastructure is registered with the Ministry of Information and Communications
• The message is labeled as advertising and includes information about the advertising service provider
• There is an opt-out option

Newspaper Advertising

Newspaper ads usually do not require prior approval by state authorities according to the law. There must be no advertisements on the newspaper’s first page with the exception of specialized advertising newspapers. Advertisements must be clearly labeled as such and must not take up more than 10 percent of the space of the newspaper.

Newspapers wishing to publish an advertising supplement must have a specific permit by the Department of Information and Communications. The supplement must not be longer than the main newspaper and must not increase the newspaper’s selling price.

There are limits on the frequency of exposure to advertisements for one product (a maximum of five days in case of a daily newspaper followed by a break of at least five days).

Periodical Advertising

Similar rules as for newspaper advertising apply. Advertisements must not be displayed on the front cover of the publication.

There are limits on the frequency of exposure to advertisements for one product (a maximum of five consecutive issues followed by a break of at least four consecutive issues).

Radio Advertising

Radio ads usually do not require prior approval by state authorities according to the law, with the exception of ads lasting more than 10 minutes. Advertisements between the announcement of the title and the broadcasting of the program contents are not allowed (exceptions apply, in particular with regard to entertainment programs). Advertisements must be clearly announced as such.

There are limits on the frequency of exposure of advertisements for one product (a maximum of ten times per day for eight days followed by a break of at least five days).

No advertisements of tampons, condoms, or skin bleach products is permitted between 6 and 8 pm.

Social Media Advertising (Facebook, YouTube, Twitter, etc.)

The same rules as for digital media advertising apply; please note that access to some social media sites is blocked in Vietnam.

Television Advertising

Similar rules as for radio advertising apply.

Regulatory Agencies

Bộ Thông tin- Truyền thông
Ministry of Information and Communications

18 Nguyen Du Street
Hanoi
Email: banbientap@mic.gov.vn
Tel: (844) 35563462
Fax: (844) 35563458
Web: www.mic.gov.vn

The ministry issues permits to conduct advertisements on the Internet, radio, and TV.

Bộ Công thương
Ministry of Industry and Trade

54 Hai Ba Trung Street, Hoan Kiem
Hanoi
Tel: (844) 22202222
Fax: (844) 22202525

Competent to regulate promotional campaigns such as bargain campaigns

Key Laws and Regulations

Pháp lệnh quảng cáo
Advertising Ordinance

Number: 39/2001/PL-UBTVQH10
Issued by: Ủy Ban Thường Vụ Quốc Hội (National Assembly ‘s Standing Committee) 

General framework for advertising activities

Nghị định 24/2003/NĐ-CP Quy định chi tiết thi hành Pháp lệnh quảng cáo
Decree Providing Detailed Regulations for Implementation of Ordinance on Advertising

Number: 24/2003/ND-CP
Issued by: Chính phủ (the government)

Guidance on the interpretation of the Advertising Ordinance

Luật Cạnh tranh
Law on Competition

Number: 27/2004/QH11
Issued by: Quốc Hội (National Assembly)
Contains legislation against unfair competition, e.g. misleading advertising, defamation

Advertising Pre-Clearance Agencies

Many advertisements require prior approval by the authorities. The competent authority depends on the contents of the advertisement and the medium. The primary authorities are the following ministries or their regional departments: 

• Ministry of Information and Technology
• Ministry of Industry and Trade
• Ministry of Health
• Ministry of Culture, Sports, and Tourism

Furthermore, newspaper companies, TV and radio stations will screen advertisements before running them.

Trends 

A new law on advertising is expected to be passed in May 2012. It is expected to contain further restrictions with regard to the advertisement of alcoholic beverages. Furthermore, the limit on advertising space (currently, 25 percent of the site) in digital media is expected to be abolished.

Author of this Article: Roedl & Partner

The Roedl & Partner group is an international consulting firm with roots in Germany. More than 80 offices worldwide offer advice to companies and individuals in law, taxation, accounting and auditing. Our presence in the Asia/Pacific region spans over 11 offices in China, Hong Kong, India, Thailand, Singapore, Indonesia and Vietnam. We assist our clients in their cross-border business activities with our own wholly owned network of subsidiaries, thus minimizing friction losses which tend to occur in a mere association of firms or a franchise organization. Our office in Ho Chi Minh City (Saigon) has been advising foreign companies on all legal and tax aspects of their investments in Vietnam since 2007. Our local Vietnamese experts have deep knowledge of the investment environment in Vietnam and excellent contacts with key authorities at the central and local levels.

Authors:

Sebastian Pawlita (registered as foreign attorney in Vietnam)

Phu Le

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