Is the representative office allowed to advertise for its parent company?

Legal situation: My company is based in the United States, and our primary business is cosmetics and beauty services. We have a representative office in Vietnam. Can the representative office in Vietnam advertise services for the parent company in Vietnam? I sincerely appreciate your response.

FDVN’s Opinion:

Thank you for your concern and for sending your question to the FDVN Law Firm (“FDVN”). After studying the relevant legal provisions, we would like to share our opinions as follows:

According to Clause 1, Article 2 of Law on Advertising 2012: “Advertising is the employment of various means in order to present the public with the profitable products, goods and service; non-profitable products and services; organizations and individuals trading and providing the presented products, goods and services, except for news, social policies; personal information”

Besides, Article 102 of Law on Commerce 2005 states that: “Commercial advertising means commercial promotion activities of traders aimed at introducing to customers their goods and service business activities.”

It is also stipulated in Clause 2 and 3 of Article 103 of this law that:

“2. Representative offices of traders must not directly conduct commercial advertising activities. When being authorized by traders, representative offices may sign contracts with traders providing commercial advertising services to advertise for the traders they are representing.

Foreign traders who wish to commercially advertise their goods and/or service business activities in Vietnam shall have to hire Vietnamese traders engaged in business of providing commercial advertising services to do so.”

As a result, in Vietnam, your company’s Vietnam representative office cannot directly advertise the services. To engage out advertising activities, it must instead enter into a contract with a Vietnamese advertising services firm. Furthermore, please be aware that in order to enter into this advertising contract or any other contract, except those serving the operations of the representative office (such as lease agreements for office space, leasing or purchasing necessary office equipment, etc.), the Head of the representative office must be granted written authorization by the parent company’s legal representative in the United States, in accordance with the legal requirements of the parent company’s judicature.

FDVN’s advisory opinion on your request is based on our examination of the applicable legal laws. We hope that FDVN’s advice will be useful to you.

Hoàng Trần Ngọc Anh – FDVN LawFirm