~ Le Viêt Nam, aujourd'hui. ~
The Vietnam News

[Year 1997]
[Year 1998]
[Year 1999]
[Year 2000]
[Year 2001]

Vietnam says may open door to foreign ad agencies

HANOI - Vietnam is considering opening its restricted advertising sector to direct foreign participation, but some limitations would remain, officials said on Tuesday.

``The market is changing. There are requests from foreign advertising agencies to set up joint-ventures...(which) could bring us many advantages,'' said an official from the Planning and Investment Ministry (MPI), the body charged with licensing most foreign investment.
All officials spoken to by Reuters said possible foreign ad ventures would be limited or controlled, but would give no details.
Around 19 foreign ad agencies have representative offices in Vietnam, which bars them from direct business activities in the communist-ruled country. Many of the agencies have repeatedly requested permission to legally operate.
One agency, U.S.-based Leo Burnett Co, last year entered into a Business Cooperation Contract (BCC) with a local firm. BCCs are short-term and give foreign parties limited management rights in exchange for a share of revenues, but no equity.

The MPI official said British firm Saatchi & Saatchi had lodged a formal application to form a joint venture with a Vietnamese partner.
He added that letters had been circulated to other ministries to seek support for a general opening of the sector and that he hoped a proposal would then be submitted to the government.

An official from the Trade Ministry said an inter-ministerial meeting next week would discuss the issue.
The first Vietnamese advertising agencies were formed in 1989 and were soon followed by international firms looking to support their global clients as they pushed into Vietnam.
But ingrained political mistrust has left foreign ad executives routinely complaining of discrimination and direct attacks accusing their agencies of tax evasion, unfair and illegal business practices and of wanting to kill-off local advertising firms.
Due to business restrictions foreign ad agencies have to sign contracts and receive payments offshore and do their media buying through Vietnamese entities.

International market research firm ACNielsen said total advertising spending in Vietnam reached $109 million in 1998, down slightly on $111 million in 1997.

Reuters - June 29, 1998.