An explosive marketing campaign can quickly turn into a media disaster and lead to billions of dong in compensation if a KOL or influencer gets involved in a scandal or violates legal regulations. For businesses, especially SMEs and foreign direct investment (FDI) companies in Vietnam, not establishing an outsourced legal department or lacking regular legal consultation when signing booking contracts is the biggest loophole. This exposes brands to severe penalties and even product recalls ahead of the new advertising law in 2026.
How would your business react if tomorrow, the influencer representing your brand is suddenly boycotted on social media for a sensitive statement? Does your current contract allow you to unilaterally terminate and claim compensation without the risk of being countersued? More importantly, how can businesses comply with the incredibly strict control regulations for "influencers" officially applied from 2026? The lack of a specialized legal department to quickly handle daily issues is the main reason many brands fall into a spiral of disputes. This article systematically outlines the latest legal framework, contract standardization procedures, and common mistakes, helping businesses build a solid shield through a professional outsourced legal department model.
The 2026 Legal Framework Regulating KOL and Influencer Booking Activities
From 2026, legal regulations in Vietnam will tighten more than ever on marketing campaigns using celebrities. KOL/Influencer booking activities are no longer solely governed by the Civil Code 2015 via service contracts, but are also directly and strictly regulated by the Law on Protection of Consumers' Rights 2023 and especially the Law amending and supplementing a number of articles of the Law on Advertising 2025 (effective from January 1, 2026). This is not a case of businesses "doing it wrong," but rather an increasingly complex and rapidly changing legal environment that demands a stricter compliance structure.
The biggest change lies in clearly legislating the definition and responsibilities of "advertising product conveyors." While previously, many KOLs bypassed the law by reviewing products as personal experiences to evade advertising responsibilities, everything is now brought into a strict framework. The law clearly stipulates the responsibilities of third parties, especially "influencers," in conveying product information to consumers. Brands and KOLs will be bound by joint and several liability more tightly than ever.
What does this mean for your business? If you hire an influencer to create content but do not require them to publicly disclose the sponsorship, the brand is complicit in violating the law. Furthermore, the new law forces KOLs to directly verify product information before accepting a booking.
Contract Establishment Procedures and Core Clauses to Protect Brands
Signing a booking contract cannot be done impulsively or based on pre-downloaded internet templates. The absence of regular legal consultation to design contracts means businesses are entrusting their brand's survival to others. To ensure safety, the contract establishment process must go through professional steps.
Step 1: Legal status review and information verification
Businesses must require KOLs to provide legal personal documents and prove their ability to issue invoices to avoid tax risks. Conversely, the business's legal department also needs to review its own circulation licenses and quality declarations to provide to the KOL strictly according to the new law's requirements, preventing the campaign from being suspended by regulatory agencies due to missing documents.
Step 2: Detail scope of work and intellectual property (Deliverables & IP Rights)
The contract must specify how many posts the KOL needs to publish, on which platforms, and for how long. Most importantly, intellectual property rights: is the business allowed to use the KOL's images and videos for cross-platform performance ads? Many brands have faced lawsuits for using KOL images for Facebook Ads or printing standees beyond the contract's specified scope.
Step 3: Morality Clause
This is the brand's lifesaver. This clause allows the business to unilaterally terminate the contract, withhold payment, and demand compensation if the KOL commits illegal acts, moral violations, hate speech, or gets involved in personal scandals that could negatively impact the brand's reputation. It is imperative to specifically define what constitutes "image-damaging behavior" instead of using vague terms.
Step 4: Establish penalties for violations and compensation for damages
A robust contract must have a deterrent effect. However, businesses cannot arbitrarily apply unreasonable penalties. It is necessary to clearly define the limits of breach penalties if the transaction falls under the Commercial Law, combined with a demand for full compensation for actual damages incurred.
Legal Risks and Common Practical Mistakes When Booking KOLs
Many businesses, especially SMEs or newly entered foreign direct investment (FDI) companies in Vietnam, often assume that paying for the booking fulfills their responsibility. The Vietnamese legal environment has complex characteristics, numerous administrative procedures, and a distinct legal culture that makes brands highly susceptible to "traps" without regular legal counsel.
The most common risk scenario is KOLs exaggerating or falsely advertising. In an effort to close sales, especially via livestreaming, many KOLs arbitrarily inflate the uses of cosmetics or functional foods with curative claims. When consumers react or market management agencies conduct inspections, the brand bears the brunt, facing fines, business suspension, or product recalls. Without a contract clearly defining the limits of spoken content, the brand will have no legal basis to shift the compensation liability onto the KOL.
The second is the crisis of co-inheriting the KOL's risk "legacy". When an influencer gets embroiled in a personal scandal like infidelity, deviant statements, or debt, netizens will immediately shift their focus to boycott the brands that KOL represents. If a business uses a downloaded template contract, there is usually no clause allowing the removal of images or emergency unilateral cancellation. As a result, the brand is trapped: removing the image violates the contract, while keeping it alienates the public.
The third is tax risks and labor disputes. Most individual KOLs do not have a legal entity status (no management company); paying their remuneration without properly deducting personal income tax at the source will lead to heavy tax arrears. Furthermore, lacking a legal department to control contracts can result in state agencies interpreting service contracts as labor contracts, entailing a series of responsibilities for social insurance and employee benefits.
The Role of Regular Legal Consultation and Outsourced Legal Departments
Facing the massive volume of aforementioned risks, the question arises: Why are businesses hesitant to build a protective barrier? The truth is, the cost of building a full in-house legal department or hiring a private lawyer is excessively high for SMEs. Moreover, waiting for an incident to occur before seeking case-by-case legal counsel is often too late and drives crisis management costs to staggering heights.
This is where the outsourced legal department and regular legal consultation solutions demonstrate practical value. An outsourced legal department means a business uses a professional law firm to act as its internal legal unit. Unlike hiring a litigation lawyer who only appears during lawsuits, DEDICA's outsourced legal department will review every booking contract weekly, verify the legality of advertising scripts before KOLs go live, and continuously update on Vietnamese legal changes. This solution helps businesses optimize costs, control risks in their infancy, and react extremely swiftly to daily crises. Especially for foreign investors, bilingual support (English/Chinese) removes language barriers, ensuring a complete understanding of the local legal system.
Conclusion
Executing KOL and Influencer booking campaigns in Vietnam amidst the upcoming 2026 legal framework demands absolute prudence from brands. The mandatory legal procedure must cover: (1) reviewing legal status and product dossiers; (2) establishing service contracts with IP clauses; (3) clearly stipulating a morality clause; and (4) strict penalty and compensation mechanisms. Do not let your brand falter just because a KOL makes false statements or faces a moral scandal while your loose contract fails to protect your rights. Lacking a specialized risk review unit is not a "mistake" by the business, but rather the absence of a proactive defense structure from the outset.
Every business, from startups and SMEs to FDI corporations, has distinct operational characteristics and legal risks. To prevent accumulated risks, save long-term costs, and build a solid legal foundation, equipping an outsourced legal department is a strategic decision. DEDICA Law Firm is ready to support you with KOL booking contracts in Vietnam. Contact DEDICA for in-depth legal consultation.
