Vietnam is one of Southeast Asia’s fastest-growing advertising and digital marketing markets. With strong consumer spending, high digital adoption and increasing foreign investment, many overseas companies are eager to enter the Vietnamese advertising industry.

However, one question almost all foreign investors ask is:

Why must we form a joint venture when opening an advertising company in Vietnam? Why can’t we own 100% of the company?

The answer lies in Vietnam’s international trade commitments and domestic advertising regulations. Advertising is not a freely accessible business sector for foreign investors. This article explains why a joint venture is legally required, what this means in practice, and how foreign investors can structure their entry into Vietnam correctly.

1. Advertising is a restricted sector for foreign investors in Vietnam

Unlike many manufacturing or trading activities, advertising services are classified as a conditional service sector in Vietnam.

Under Vietnam’s WTO Schedule of Commitments on Services (Advertising – CPC 871), foreign investors are not permitted to provide advertising services via a 100% foreign-owned company. Instead, foreign participation is allowed only through:

• A joint venture with a Vietnamese partner, or

• A Business Cooperation Contract (BCC) with a licensed Vietnamese advertising company

This commitment is legally binding and continues to be applied in Vietnam’s current investment licensing practice.

As a result, any attempt to set up a fully foreign-owned advertising company will be rejected by the Vietnamese licensing authorities.

2. Domestic Vietnamese law reinforces the joint-venture requirement

Vietnam’s WTO commitments are reflected and reinforced by domestic legislation, including:

• The Law on Advertising (as amended and currently effective)

• The Law on Investment 2020

• The Law on Enterprises 2020

• Regulations on online and cross-border advertising

These laws recognize advertising as a business activity that directly affects:

• Public information

• Cultural and social values

• Consumer protection

• National regulatory interests

For this reason, Vietnamese law requires Vietnamese participation and accountability in advertising activities conducted in Vietnam.

3. Policy reasons behind the joint-venture rule

From a policy perspective, Vietnam requires joint ventures in advertising for several key reasons:

3.1 Control over advertising content and social impact

Advertising influences:

• Public opinion

• Consumer behavior

• Sensitive sectors such as healthcare, education, finance and real estate

By requiring a Vietnamese partner, authorities ensure there is a locally responsible entity familiar with Vietnamese law, language and cultural boundaries.

3.2 Effective enforcement and regulatory oversight

A Vietnamese partner:

• Is already licensed and registered in Vietnam

• Falls clearly under the jurisdiction of Vietnamese authorities

• Can be held accountable for violations of advertising regulations

This makes enforcement significantly more effective than dealing with a purely foreign entity.

3.3 Protection of local advertising industry

Vietnam’s advertising sector includes a large number of domestic agencies. The joint-venture model:

• Allows foreign expertise and capital to enter the market

• While preventing complete domination by foreign companies

This approach balances market openness with industry protection, which is common in many service sectors worldwide.

4. What “joint venture” means in practice for foreign investors

When opening an advertising company in Vietnam, a joint venture means:

• The company is incorporated in Vietnam

• Ownership is shared between:

  • One or more foreign investors, and

  • At least one Vietnamese advertising company

• Foreign ownership is permitted but not 100%

There is no fixed statutory cap on the foreign ownership ratio, but authorities will assess whether:

• The Vietnamese partner has real participation

• The structure reflects the spirit of Vietnam’s international commitments

5. Common misunderstandings about advertising joint ventures

“We only do online or digital advertising, so the rule doesn’t apply”

❌ Incorrect.
Vietnamese law applies equally to traditional and digital advertising, including:

• Social media marketing

• Influencer/KOL campaigns

• Cross-platform digital ads

Digital advertising is in fact more closely monitored in recent years.

“We can register a different business line to avoid the restriction”

❌ High risk.
If the actual activities are advertising services, misclassification of business lines may lead to:

• License revocation

• Administrative sanctions

• Forced restructuring

Authorities increasingly check substance over form.

“We’ll use a Vietnamese nominee to hold shares”

❌ Very risky and legally unsafe.
Nominee arrangements are not recognized as valid ownership protection under Vietnamese law and offer no legal security for foreign investors in disputes.

6. Alternative structure: Business Cooperation Contract (BCC)

Instead of a joint venture, foreign investors may choose a Business Cooperation Contract, where:

• No new company is established

• Advertising services are provided by the Vietnamese partner

• Profits and responsibilities are shared contractually

While BCCs are legally permitted, they:

• Offer less control over branding and operations

• Require very careful contract drafting to protect foreign investors’ interests

For investors seeking a subsidiary-style presence, a joint venture remains the preferred model.

7. Licensing implications of the joint-venture requirement

Because a joint venture is mandatory, foreign investors must:

1. Obtain an Investment Registration Certificate (IRC)

2. Register the company and obtain an Enterprise Registration Certificate (ERC)

3. Complete post-licensing procedures (tax, banking, labor, compliance)

4. Ensure ongoing compliance with advertising and content regulations

Failure to structure the investment correctly at the beginning often leads to:

• Licensing delays

• Rejections

• Costly restructuring

8. Why legal structuring is critical from the start

Joint ventures are not just a formal requirement — they are long-term relationships.

Key issues that must be addressed from the beginning include:

• Management and decision-making rights

• Profit distribution

• Intellectual property ownership

• Exit mechanisms and dispute resolution

• Compliance responsibilities

Poorly structured joint ventures are a major source of disputes in Vietnam’s advertising sector.

9. How DEDICA Law Firm supports foreign investors in advertising joint ventures

DEDICA Law Firm, based in Ho Chi Minh City, regularly advises foreign investors on entering restricted service sectors, including advertising and digital marketing.

Our services include:

• Legal feasibility assessment under WTO and Vietnamese law

• Structuring compliant joint-venture or BCC models

• Drafting and negotiation of joint-venture agreements

• Complete licensing and post-licensing support

• Ongoing legal compliance for advertising activities

Our team works in English, Chinese and Vietnamese, ensuring clear, practical advice for foreign investors.

Contact DEDICA Law Firm for Professional Legal Support

📞 Hotline: (+84) 39 969 0012 (Available via WhatsApp, WeChat, Zalo)

🕒 Working Hours: Monday – Friday (8:30 – 18:00)

Contact us today for a free initial consultation with our experienced lawyers!