Cross border supply of online advertising services into Vietnam

For online advertising, placing advertisement through big US internet companies such as Google or Facebook is a must for many Vietnamese companies. Under the WTO Commitments, Vietnam undertakes to allow cross-border supply for advertising services (CPC 871, excluding advertising for cigarettes) with no limitation. As such, a foreign company should be able to provide online advertising services to Vietnamese customers without having to set up a commercial presence in Vietnam.

That being said, Decree 181/2013 does not allow Vietnamese organisations or individuals to place their online advertisement directly on overseas server-based website. Instead, online advertisement with foreign internet companies must be placed via a local advertising service provider in Vietnam. In addition, 15 days before the placement of the local advertiser’s advertisement on its website, the foreign publisher is required to report the corporate information and key business lines of the authorised local advertising service provider to the Ministry of Culture, Sports and Tourism.

On the other hand, under the Advertising Law, foreign organisations or individuals not having a commercial presence in Vietnam must conduct the advertisement of their products, goods or services in Vietnam via an advertising service provider in Vietnam. In theory, these restrictions may be viewed as contrary to Vietnam’s undertaking under the WTO Commitments which allow cross-border supply for advertising services without limitation. However, it is not clear if one can successfully invoke the WTO Commitments.

Potential restriction on foreign investment in printing business

Under the commitments of Vietnam to the WTO (WTO Commitments), printing service is considered as a part of services incidental to manufacturing (CPC 88442). Accordingly, under the WTO Commitments,  from 11 January 2015, a foreign investor should be allowed to set up a wholly owned printing subsidiary in Vietnam.

However, under Decree 69/2014, a company involved in the printing of newspapers, statutory forms issued by the State authorities, anti-counterfeit stamps, and “financial invoices” must “have Vietnamese owners”. It is not clear if this means that (1) all owners of such printing company must be Vietnamese or (2) at least one owner of such printing company must be Vietnamese. In either case, the restriction under Decree 69/2014 seems to be contrary to the WTO Commitments. 

Foreign invested enterprises in trading business

Under Decree 23/2007, a foreign invested enterprise (doanh nghiệp có vốn đầu tư nước ngoài) involved in import, wholesale, and retail of goods will need to obtain a trading licence (giấy phép kinh doanh) and, if applicable, a retail outlet licence . A foreign invested enterprise wishes to open more than two retail outlets will need to go through an Economic Need Test except in certain limited circumstances. So being a foreign invested enterprise in trading business would mean more restrictions and regulatory obstacles.

Decree 23/2007 does not define what is a “foreign invested enterprise”. However, it appears that in order to qualify as a foreign invested enterprise, one must have an Investment Certificate. This is because the procedures to issue a trading licence under Decree 23/2007 must be done in conjunction with the procedures to issue or amend an Investment Certificate.

Foreign investment in house/office moving services in Vietnam

In an official letter issued in March 2014, the Ministry of Planning and Investment (MPI) took the view that foreign investment in house/office moving services in Vietnam is possible subject to approval by the Ministry of Transportation and the Ministry of Industry and Trade. In particular, the MPI considers that:

• House/office moving services could fall under CPC 51590 under CPC Classification for construction services;
• There is no specific commitment by Vietnam to open the services under CPC 51590 to foreign investors under the WTO Commitments of Vietnam. That being said, Vietnam has undertook to open services under CPC 515 to WTO members in its WTO Commitments. Therefore, it is not clear why the MPI takes the view that CPC 51590 is not within the WTO Commitments regarding CPC 515; and
• House/office moving services do belong to the restricted or conditional services under Decree 59/2006. Therefore, if the Ministry of Transportation and the Ministry of Industry and Trade agree then a foreign investor may invest in house/office moving services in Vietnam.