Can a Parent Company Register Promotions on Behalf of Its Subsidiaries?

1. Can a parent company register promotions for its subsidiaries?

According to Clauses 1 and 2, Article 196 of the Law on Enterprises 2020 (as amended and supplemented by Law No. 76/2025/QH15, effective from 01/7/2025), which provide as follows:

“Article 196. Rights, obligations and responsibilities of a parent company towards its subsidiaries

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1. Depending on the legal form of the subsidiary, the parent company shall exercise its rights and fulfill its obligations as a member, owner or shareholder in relation to the subsidiary in accordance with the respective provisions of this Law and other relevant laws.

2. Contracts, transactions and other relations between the parent company and its subsidiaries must all be established and performed independently and equally under the conditions applicable to independent legal entities.

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Accordingly, the parent company and its subsidiaries are related only in terms of capital contribution; in essence they are two independent legal entities with separate legal personality, i.e. two distinct traders. Therefore, whichever subsidiary produces the goods is the one that registers the promotion; the parent company cannot register promotions with state authorities on behalf of its subsidiaries.

2. How is reporting on the results of promotional programs regulated?

According to Clause 2, Article 21 of Decree 81/2018/ND-CP on reporting the results of promotional programs as follows:

– Within 45 days from the date the prize-awarding period of a promotional program ends, in the form prescribed in Article 13 of this Decree and other forms prescribed in Clause 9, Article 92 of the Commercial Law, the trader carrying out the promotional program must submit a written report to the competent state management authority (where it registered and was confirmed) on the results of the promotional program according to Form No. 07 of the Appendix issued with this Decree. Where 50% of the value of unclaimed prizes must be remitted to the state budget, within 07 working days from receipt of the trader’s report, the state management authority shall issue a decision to collect 50% of the announced value of the unclaimed prizes of the promotional program according to Form No. 08 of the Appendix issued with this Decree. Within 15 working days from receipt of the collection decision of the state management authority, the trader is responsible for remitting the amount of 50% of the announced value of the unclaimed prizes of the promotional program as decided.

+ Within 10 days from the date of remittance to the state budget, the trader is responsible for sending a written report according to Form No. 09 of the Appendix issued with this Decree to the state management authority that issued the collection decision. Vouchers and documents related to the report on promotion results must be retained by the trader and kept under its responsibility in accordance with the law to serve inspection, examination and supervision.

+ Traders carrying out promotions in the forms prescribed in Clause 8, Article 92 of the Commercial Law, Articles 8, 9, 10, 11, 14 and the cases prescribed in Point a, Clause 2, Article 17 of this Decree are not required to report promotion results.

3. When must a promotional program be terminated?

According to Article 22 of Decree 81/2018/ND-CP on termination of promotional programs as follows:

A trader carrying out a promotion may not terminate the promotional program before the announced time limit or the time limit confirmed by the competent state management authority, except in the following cases:

– In the event of force majeure, the early termination of the promotional program must be publicly announced to customers and the competent state authority on commerce.

– In the event that the trader has exhausted the quantity of promotional goods or services, or goods or services used for promotion, or has issued all the announced or confirmed prize-winning evidences, the termination of the promotional program may only be carried out after the trader notifies the competent state management authority and ensures the full rights of customers who have participated in the program.

– In the event that the state management authority requests the termination of all or part of the trader’s promotional program, the termination must be publicly announced by the trader in one of the ways prescribed in Article 98 of the Commercial Law, on the trader’s website (if any), and the trader must ensure full performance of its commitments to customers who have participated in the promotional program; except where the promotional program uses prohibited goods or services, restricted goods or services, goods not permitted for circulation or services not permitted for provision for promotion, or uses alcohol or beer for promotion to persons under 18 years of age, or uses tobacco, alcohol or medicines for promotion (except where medicines are used for promotion to traders dealing in medicines) in any form. A trader shall be required by the state management authority to terminate its promotional program when:

+ Violating the provisions of Article 100 of the Commercial Law and Article 3 of this Decree;

+ Failing to perform, improperly performing, or incompletely performing the contents of the promotional program rules registered with the competent state authority on commerce.