Besides the traditional forms of advertising, there are newer and more unique ways of advertising in the world today. Therefore, the field of advertising service business is a potential market for investors. In addition to domestic enterprises who are familiar with the domestic market, foreign enterprises are also very interested in this field. So what are the procedures for setting up an advertising company with foreign capital? Let’s find out in this article with LSX Law firm.
- Commitment 318 / WTO / CK
- Enterprise Law 2014
- Investment Law 2014
- Official Letter No. 4326 / BKH-FDI
Forms of invest
So The Government has made significant efforts to create more favorable conditions to attract foreign investors to invest into Vietnam. and Joining the WTO Agreement is a great victory for Vietnam in the process of integration with the world. When joining Commitment 318/WTO/CK, Vietnam has shown its determination to improve the business investment environment for many business lines, including the advertising business.
According to Vietnam’s service commitments in the WTO, in the sub-sector of advertising services (CPC 871), which states:
From the date of accession, foreign advertising companies may establish joint ventures or participate in business cooperation contracts with a Vietnamese partner who has been licensed to provide advertising services. When choosing the model of joint venture cooperation, the capital contribution of the foreign side must not exceed 51% of the legal capital of the joint venture. But, from January 1, 2009, this limitation on the capital contribution ratio is removed.
Therefore, based on the legal provisions on enterprises and investment, and Vietnam’s commitments when joining the WTO, foreign-invested organizations and individuals who want to do business in the field of advertising must do so in two specific forms:
Form a join venture
Firstly, to form a joint venture with a Vietnamese enterprise that has registered for the advertising business and is doing business in this field. Then the Vietnamese enterprises will sell their contributed capital and shares in their companies to foreign partners at a certain price. After that, foreign enterprises will participate in the company as capital contributors or shareholders of the joint venture. Additionally, The right to dominate the joint venture will depend on the proportion of capital contribution/share held by the foreign-invested enterprise.
Indirectly establish a Vietnamese enterprise
So a foreign-invested enterprise can hire a qualified person to establish an enterprise in Vietnam. When being granted the Certificate of Enterprise Establishment, a foreign-invested enterprise will carry out the acquisition of contributed capital/shares of newly-established enterprises.
Procedures for implementation
Step 1: Establishment of a Vietnamese company to register for advertising activities
A company’s establishment dossier includes:
- An application for enterprise registration;
- Company charter;
- List of members of a limited liability company or a list of shareholders of a joint-stock company;
- A valid copy of one of the following documents:
– A valid ID card or a valid Passport for individuals;
– Certificate of business registration for organizations and enclosed with personal identification papers
– Written authorization of the authorized representative of the organization;
– Decision on capital contribution for company members, company shareholders being organizations;
– Power of attorney to provide company establishment services for organizations and individuals (if authorized)
Place of application: Department of Planning and Investment where the enterprise is headquartered.
Processing time: 03 – 06 working days.
Result: Certificate of business registration.
Step 2: Investors carry out procedures for registration of capital contribution, purchase of shares, or capital contribution to a Vietnamese company that has registered for advertising activities.
- Written registration for capital contribution, share purchase, capital contribution (Form I-6 of Official Letter No. 4326/BKHDT-ĐTNN on the receipt procedures and forms for carrying out activities under the Investment Law);
- A copy of the identity card, identity card or passport for the investor being an individual
- A copy of the Certificate of Establishment or other equivalent document certifying the legal status of the investor being an organization;
- The person who do the procedures on behalf of the investors must present their personal identification and the investment registration certificate. And the following dossier:
– Service contract between the Investor and the service organization that submits the application file and receives the results.
– The recommendation letter from that organization for the individual to submit the application and receive the results;
– A written authorization for the individual to submit the application and receive the results as prescribed by law.
Receiving agency: Investment registration office where the enterprise’s head office is located.
Processing time: 15-25 working days from the date of receipt of valid dossier.
Results of administrative procedures: Notice
Frequently Asked Questions
So, what is the time limit for the investment registration agency to get opinions from the Ministry of National Defense and the Ministry of Public Security on meeting the conditions prescribed by law?
Within 03 working days from the date of receipt of valid dossier, The investment registration agency consults with the Ministry of National Defense and the Ministry of Public Security on meeting the conditions prescribed by law
So, where are the forms of investors contributing capital to Vietnamese companies?
Investors may contribute capital to companies in Vietnam in the forms specified in Article 23 of the Law on Investment 2020.