Opening a foreign-invested advertising company in Vietnam may seem simple, but it is actually filled with legal risks. Do you truly understand the common “traps” that can cause investors to lose months just because of a small mistake?
Why do foreign investors easily make mistakes when establishing an advertising company in Vietnam?
Vietnam’s advertising market is growing rapidly and attracting international investors. However, the fast-changing legal landscape, overlapping regulations, and complex administrative procedures make the process of setting up a foreign-invested advertising company in Vietnam far more challenging than expected. Without understanding conditions for restricted sectors, ownership ratios, or required licenses, businesses may fall into a passive position from the very first step. Below are 10 common legal mistakes DEDICA Law has frequently handled for FDI clients.
Failing to understand that advertising is a conditional business line
Many investors are unaware that advertising services fall under conditional sectors under Vietnam’s WTO commitments. As a result, they declare the wrong business lines or select incorrect industry codes. Consequence: the application is rejected and must be amended repeatedly.
Registering business activities beyond the permitted scope
Some FDI companies want to offer TVC production, media booking, influencer marketing, etc., without knowing that each service has different limitations for foreign investors. Operating beyond the permitted scope can lead to inspection or sanctions.
Preparing documents not compliant with Vietnamese standards
One of the most common mistakes when establishing a foreign-invested advertising company in Vietnam is using foreign documents that have not been consular-legalized or are translated incorrectly. Even a minor error can result in the file being rejected.
Not understanding the IRC → ERC → advertising license process
Many investors assume that obtaining an ERC is enough. However, depending on the type of advertising services, the company may also need sub-licenses, advertising content registration, or notifications to regulatory authorities. Missing just one step can result in administrative penalties.
After understanding the context and root causes, below is a detailed analysis of the 10 most common mistakes—along with practical solutions that DEDICA Law has applied for FDI clients.
Not complying with the permitted foreign-ownership ratio
Some investors come from jurisdictions not covered under WTO commitments or wish to hold 100% ownership while advertising is subject to certain restrictions. Incorrect structuring may lead to complete rejection of the application.
Failing to assess risks related to the legal representative
Many companies appoint a foreigner as the legal representative without considering residence requirements in Vietnam. This leads to difficulties signing documents, opening bank accounts, and working with tax authorities.
Failing to register advertising content for each campaign
FDI advertising companies often assume that once the business is registered, they can execute any type of advertisement. However, Vietnamese law requires approval or notification depending on the format (poster, online ads, signage, etc.). Non-compliance may result in fines reaching hundreds of millions of VND.
Using KOLs/KOCs without proper legal contracts
With the rise of influencer marketing, many collaborations rely on verbal agreements or poorly drafted contracts, leading to disputes over image rights, personal income tax, or complaints from clients.
Errors in tax declaration for cross-border advertising services
Google Ads, Facebook Ads, and TikTok Ads fall under special tax regimes. When establishing a foreign-invested advertising company in Vietnam, many companies incorrectly file or fail to pay foreign contractor tax, resulting in back taxes and penalties.
Misclassifying expenses in advertising contracts
Advertising often includes multiple components: media booking, content production, licensing, etc. Incorrect classification may cause expenses to be rejected during tax audits.
Each of the above mistakes can cause investors to lose 3–6 months or even restart the entire process. The most crucial factor is setting up the structure correctly from the beginning. DEDICA Law has supported numerous FDI projects in marketing and communications with the following solutions:
Determining the exact advertising activities permitted
DEDICA analyzes international commitments, the Law on Advertising, and relevant decrees to identify suitable business lines and optimize the chances of IRC approval.
Advising on ownership structure, capital ratio, and legal representative
Choosing the wrong structure can freeze an entire project. DEDICA assists clients in selecting the most compliant and efficient structure.
Preparing documents meeting both international and Vietnamese standards
From consular legalization to translation and business-line registration, DEDICA ensures all documents meet approval requirements.
Advising on compliance after establishment
We provide detailed guidance on advertising content registration and other compliance obligations. Most risks arise from misunderstanding the law—having professional guidance ensures a smooth, safe setup process.
Are you planning to invest or facing legal issues when establishing an FDI advertising company?
Contact DEDICA for tailored legal strategies.
DEDICA LAW FIRM
📞 Hotline: (+84) 39 969 0012 (WhatsApp, WeChat, Zalo supported)
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