Open a Digital Marketing or Advertising agency in Vietnam

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Open a new Digital Marketing or Advertising agency in Vietnam

Market facts

Southeast Asia is the world’s fastest-growing region in terms of digital advertising spending, led by Singapore, Indonesia, Thailand, the Philippines, Malaysia, and Vietnam. Total media advertising expenditure in Vietnam is expected to reach 1.43 billion US dollars by 2022, with digital advertising accounting for 24.7 percent of total spending.

Consumers in Vietnam spend a lot of time watching online content on desktop devices, but even more so on mobile phones, where they also use and try out new apps and games due to the high internet adoption rate. As a result, mobile advertising accounts for the majority of digital ad spend, followed by online video, social media, and search engine advertising.

With increasing digital advertising spending especially during the last 5 years, Vietnam has proven to be a market with significant potential for digital marketing and advertising services. Despite the fact that this is a conditional business, which means that investors must meet a few conditions in order to establish their presence in the country, the country has attracted many investors in this field to join the market.

Conditions to open a company providing Digital Marketing or Advertising services in Vietnam

The entry barrier for foreign investment

Advertising (including relevant business lines such as digital marketing services) is considered a conditional business. This business until today is still not open 100% to foreign ownership. According to Vietnam’s WTO’s commitment, Vietnam needs to gradually remove entry barriers in all areas which have been specified in Schedule of Specific Commitments in Services published in 2007. In which, “Advertising services” (CPC 871) is scheduled to be opened to foreign investment under a certain timeframe.

Particularly, upon accession, foreign service suppliers are permitted to establish joint ventures or business cooperation contracts with Vietnamese partners who are legally authorized to do advertising services.

Furthermore, joint ventures shall be allowed with a foreign capital contribution not exceeding 51% of the legal capital of the joint venture (starting from 2007). As of 1 January 2009, there shall be no limitation on foreign capital contribution in the joint ventures.

Despite the fact that the WTO commitment has lifted the limit on foreign capital contribution to “no limitation,” it still requires the formation of a joint venture to be eligible for business establishment if it involves foreign investment. It means that in 2021, a foreign investor can obtain up to 99.9% of the capital share in an advertising company, but he cannot own it entirely.

This is the most significant remaining barrier to the establishment of an advertising or digital marketing agency in Vietnam that involves foreign investment. However, because this nominee’s local partner can be arranged, the company can still be established even if the investors do not have a local partner ready to join the business.

Other conditions for incorporation

Once the most important condition is met, to open an advertising or digital marketing service company in Vietnam, like all other businesses, you must obtain a business address and a resident legal representative in order to be registered. The process and flow of business incorporation will follow the standard 10 steps of How to fully open a company and get it ready to run.

1. Business address

The majority of business lines permit the use of a virtual office as the registered business address. However, some conditional businesses (such as training, coaching, manufacturing, and so on) require a physical address with a minimum amount of space, size, and lease term. The residential address cannot be used to register a company in any circumstance. As a result, if someone offers you to use their home or apartment for your business, you should think twice before accepting. VNBG provides services to arrange business addresses (Virtual Office or actual office) for our clients. Contact us if you are looking for one.

2. Resident legal representative

Any company established in Vietnam must have at least one legal representative residing in the country. This individual may be Vietnamese or non-Vietnamese. If the appointed person is a non-Vietnamese, the company must obtain a Work Permit for him in the future.

In addition, to prove his residency, the individual must provide a permanent address in Vietnam along with his name. And a minimum of 183 days in the country per year.

The presence of a resident legal representative is required during the registration process. Fortunately, even if the investor cannot appoint someone right away, he can seek a temporary arrangement of this role just to complete the registration process, and then replace the right person whenever he wants.

3. Capital investment

There is no minimum capital specified by the law for advertising and digital marketing agency establishment in Vietnam. Therefore the investor can set any number you see fit. However, the capital is considered the fund of business in the future, therefore you should prepare a sufficient budget for your company’s operation until it can get to the self-sustained stage. Committed capital must be injected into the company within 3 months from the business license date.