A signboard is an "advertising medium"[1] used to introduce basic and mandatory information that a store or business establishment needs to provide to their customers and partners in business activities.
Signboards play an essential role in promoting, attracting, and creating prestige for businesses. However, for a variety of reasons, some businesses have neglected the design and installation of signboards, resulting in businesses failing to put up signboards, breaching signboard content, or installing the incorrect signboard. As a result, the enterprise was administratively sanctioned by the management agencies with a hefty fine[2], from VND 30-50 million, affecting the company's image and reputation.
So, what issues must businesses comply with when installing their business signboard in accordance with current law? Within the scope of this article, HM&P will clarify the issues of signboards.
1. The content of the signboard
a) The mandatory content of the signboard
Pursuant to Clause 1, Article 34 of the Law on Advertising 2012, the mandatory contents of a signboard include:
- The name of the direct line agency (if any);
- Name of the production facility, business establishment consistent with the Enterprise Registration Certificate (ERC);
- Address, phone number.
In addition, Clause 3, Article 22 of Decree 103/2009/ND-CP also states the contents of the signboard, such as the name of the direct managing agency (if any); full name in Vietnamese in accordance with the establishment decision or ERC issued by a competent authority; type of enterprise or cooperative; main business lines (for production facility, commodity trading, service);
Where the business doesn't comply with the stipulation of the content of the signboard will be imposed the fine in accordance with Article 48 of Decree 48/2021/ND-CP
“1. Imposing the fine from 5,000,000 dong to 10,000,000 dong for one of the following violations:
a) Failing to fully display the directly controlling agency’s name on the signboard; the production and business establishment’s name in accordance with the business registration certificate or the enterprise registration certificate; addresses and telephone numbers;”
b) The content of the signboard expresses in the foreign language
Vietnamese law requires that in advertising products, the content must be expressed in Vietnamese and businesses can use foreign letters to represent abbreviations, international transaction names, names, and business signboards.
Vietnamese law shall express the content of the signboard in foreign language. Vietnamese law allows the content of signs to be displayed in foreign languages. In case of using foreign letters, the enterprise must present the content of the signboard as follows: the foreign font size must not exceed three quarters of the Vietnamese text.[3]
2. Format of signboard
a) Form of signboard: Signboards shall present in the form of boards, signs, light boxes, neon light system (neon signs), ...[4]
b) The signboards size:
The signboard sizes are specified as follows:
- For horizontal signboards
+ The maximum height is 02 meters (m)
+ The length must not exceed the width of the house front;
- For vertical signboards
+ The maximum width is 01 meter (m)
+ The maximum height is 04 meters (m) but must not exceed the height of the floor where the signboard is located.
c) Signboard construction License
The law requires a signboard construction license in the following case:
“Building signboards, billboards with over 20 m2 of one side with metal structure or similar materials and attached to another existing construction.”[5]
The application and procedure for the advertising construction license shall be specified in clause 3, clause 4 of Article 31 of The Law on Advertising 2012. The time and ability to apply for the permit will depend on the specific case and conditions of the individual or organization. If individuals or organizations carry out the construction of signboards without applying for a construction permit, they will face fines for violations by Clause 6 Article 60 of Decree 158/2013/ND-CP:
“6. Imposing the fine ranging from 5,000,000 dong to 10,000,000 dong for Building signboards, billboards with over 20 m2 of one side with metal structure or similar materials and attached to another existing construction without signboard construction license.”
In order to ensure confidence in the establishment and operation of signage, seeking legal counsel from experienced attorneys is crucial. By doing so, one can facilitate the smooth and efficient execution of signage installation and business operations.
d) Technical position
- Attached to the gate or front side of the business location.
- If the signboard is hung horizontally above the gate or entrance, the distance from the lower edge of the board and the ground must be at least 4.25 m.[6]
- The signboard must not block the emergency exit and firefighting space, must not violate the pavement, the road or affect the public traffic
Breaching the signboard technical position will be fine from 15.000.000 dong to 20.000.000 dong in accordance with Clause 3 Article 66 of Decree 158/2013/ND-CP.
e) The amount of signboards shall install:
- Every enterprise shall install one signboard at the front gate.
- At the head office which is independent of other organizations, individuals shall install one horizontal signboard and not exceed two vertical signboards.[7]
Noted: The placement of signboards must also ensure aesthetics and comply with technical regulations issued by the government and local authorities.
3. Some special cases of signboard placement should be aware
a) The business does not operate at the head office
According to the Law On Enterprise, the head office is the contact location of the enterprise in the territory of Vietnam and is recorded in the enterprise registration certificate. Legally, we can understand that the mandatory function of the head office is to communicate, so the head office may or may not carry out the business of the enterprise.
If the business does not operate at the registered head office address, where should the the signboard be placed? In accordance with Article 37 of the Law on Enterprise 2020: “The enterprise’s name shall be displayed at the headquarters, branches, representative offices”, thus even operating anywhere the business shall place the signboard at the head office that the enterprise registered.
In fact, many businesses today operate in locations other than their head office or have their head office at a different address than the one listed on their enterprise registration certificate. These businesses frequently make mistakes in signboard placement, such as not placing the signboard at the registered office or placing the signboard in a location where the business is not registered, resulting in administrative violations being imposed on the company. Furthermore, the fact that the enterprise does not operate at the registered head office address can result in a variety of consequences, including: the enterprise being sanctioned for operating in an unregistered location, being unable to deduct VAT, having tax codes closed, and being unable to use e-invoices.
Therefore, to ensure legal business operations in this case, besides compliance with signboard placement, enterprises should: (i) change the registered head office address, or (ii) arrange for employees to operate at the head office and register locations of business/branches/representative offices where the business is officially operating.
b) Signboard placement at the business, branch, representative office location
In accordance with Article 37 and Clause 3, Article 40 of the Law on Enterprises 2020, an enterprise must attach the name of the enterprise and the name of the branch, representative office, business location at the branch, representative office and business location, so businesses shall place the signboard at these locations.
According to Article 40 of the Law on Enterprise 2020, the signboards of branches, representative offices and business locations must have the following contents: The name of a branch, representative office or business location shall consist of the enterprise’s name and the phrase “Branch”, “Representative Office” or “Business Location”, and shall be smaller than the Vietnamese name of the enterprise.
c) Violating of prohibitions in advertising activities
Signboard placement is a way of advertising activities; thus, signboard placement shall not breach the prohibited acts of the Law on Advertising. Following Article 7, Article 8 Law on Advertising 2012, there are some regular violated acts:
Advertising on wine that contains 150 alcohol or above.
Advertising incorrectly or causing confusion about the business competence, the ability to provide products, goods, and services of organizations and individuals trading and providing such products, goods, and services
Advertising using the words “best”, “the best”, “only”, “number one” or words with similar meanings without legitimate documents proving so as prescribed by the Ministry of Culture, Sports, and Tourism.
[1] Clause 4 Article 17 Law on Advertising 2012
[2] Current fine application:
- For acts of not hanging signboards: Article 52 of Decree 122/2021/ND-CP, fine ranging from VND 30,000,000 to VND 50,000,000, forcing the business name to be attached.
- For acts of hanging signboards in contravention: Decree 38/2021/ND-CP, fine level for organizations is from 10 million VND to 40 million VND, forcing the removal of violating signboard.
[3] Article 18 Law on Advertising 2012, Clause 1 Article 23 Decree 103/2009/ND-CP
[4] Article 22 Decree 103/2009/ND-CP
[5] Article 31 Law on Advertising 2012
[6] Clause 2 Article 23 Decree 103/2009/ND-CP, Clause 4 Article 34 Law on Advertising 2012, Point 2.2.3 Circular 04/2018/TT-BXD
[7] Clause 2 Article 23 Decree 103/2009/ND-CP
