Explainer: Why Vietnam’s coffee shops can no longer play background music for free

Under local regulations and following the increase in the statutory base salary to VND2.53 million (US$96) per month on July 1, business establishments that play music for customers are required to pay an annual royalty fee, calculated using the following formula: Annual royalty fee = Base salary × Adjustment coefficient.

According to lawyer Phan Vu Tuan, managing partner of Phan Law Vietnam, the fee schedule is calculated based on specific criteria, including the size of the premises, the type of business, and the urban classification.

For example, a small coffee stall or sidewalk kiosk with an area of less than 15 square meters is subject to an adjustment coefficient of 0.35 per year. Based on the current statutory base salary, the owner would pay about VND885,500 ($34) annually, or less than VND74,000 ($3) a month, to play music for customers.

By contrast, a restaurant with a floor area of up to 50 square meters, which typically has greater seating capacity and higher revenue potential, is subject to an adjustment coefficient of 2 per year. Its annual royalty payment would amount to VND5.06 million ($192), or roughly VND422,000 ($16) per month.

The nearly sixfold difference in the actual amount payable demonstrates that the fee schedule is not a one-size-fits-all system. Instead, it is designed to ensure fairness by aligning royalty payments with the scale and earning capacity of each business.

Businesses wishing to use copyrighted music should obtain a license and pay royalties through the Vietnam Center for Protection of Music Copyright (VCPMC) or the Recording Industry Association of Vietnam (RIAV), depending on the rights involved.

If the copyright owner has not authorized either organization to manage the rights, business owners must contact the copyright holder directly to obtain permission and arrange payment.

Associate Professor Nguyen Van Thang Long, associate program manager of the public relations program at RMIT Vietnam, said many business owners may be caught off guard by the requirement, but the obligation itself has been in place for years.

He said the obligation is stipulated in the Law on Intellectual Property and detailed in Government Decree No. 17/2023, which took effect on April 26, 2023, outlining the implementation of copyright and related rights under the law. The decree was later amended and supplemented by Decree No. 134/2026, which came into force on April 9, 2026.

"The July 1, 2026 milestone simply provides greater clarity on how the royalty fee is calculated and the penalties for non-compliance. It does not introduce a new fee," Long said.

Severe penalties

According to lawyer Phan Vu Tuan, current regulations do not require proof that a particular song directly generated revenue or attracted a certain number of customers.

As long as a business plays music on its commercial premises, the act is automatically considered commercial use and is therefore subject to royalty payments.

Businesses that deliberately avoid or fail to fulfill this obligation may face severe penalties.

Copyright holders may file lawsuits seeking to stop the infringement, require public apologies, and claim compensation for financial losses, lost profits, and legal expenses.

Administratively, businesses that fail to pay royalties for using copyrighted works, sound recordings, or video recordings in commercial activities may be fined up to tens of millions of Vietnamese dong and required to surrender any unlawful profits earned from the infringement.

Criminal penalties may also apply in cases of commercial-scale copyright infringement.

Businesses that generate illegal profits of at least VND50 million ($1,901) or cause losses of at least VND100 million ($3,802) to copyright holders may face criminal prosecution.

Individuals may face fines up to VND300 million ($11,406) or a non-custodial sentence of up to three years, while corporate entities may face fines of up to VND3 billion ($114,066) or be subjected to the suspension of their business operations for a specified period.

‘Shift in public perception’

Lawyer Hoang Ha of the Ho Chi Minh City Bar Association said the most significant aspect of the regulation is not the amount of money collected but the shift in public perception.

He noted that for many years, people in Vietnam have become accustomed to treating music as ‘free.’

When a song is played in a café or restaurant, it is often seen as nothing more than background entertainment.

"In reality, however, music enhances the customer experience, encourages people to stay longer, and creates commercial value for the business,” he said.

“Once it generates economic value, it is only reasonable that copyright owners receive compensation.”

According to Ha, the regulation also brings Vietnam closer to international practice.

This is also in line with Vietnam's international commitments under agreements such as the Berne Convention and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) on the protection of intellectual property rights.

Businesses seek clearer guidance

Many businesses in Vietnam's F&B sector have expressed concern over how the rules will be enforced, how royalties will be calculated based on floor area, and the prospect of another fixed operating cost.

Tran The Hien, owner of a café on Phan Van Tri Street in Ho Chi Minh City, said his business, like many small cafés, currently plays music through YouTube. Until recently, he had not paid much attention to copyright regulations.

With his café covering about 1,000 square meters, Hien estimated the annual royalty bill could approach VND50 million ($1,901), creating a significant financial burden.

"At a time when the F&B industry is still grappling with high ingredient and rental costs while consumer spending has yet to fully recover, taking on another fixed annual expense makes it harder for us to balance our cash flow," Hien said.

Business owners are concerned over the use of total floor area as the basis for calculating the fee.

They argue that not every part of a business contributes to customers' music-listening experience, as storage rooms, technical areas, and restrooms have nothing to do with the commercial use of music but are still included in the calculation.

Besides, what many businesses and household operators find most confusing is the lack of clear guidance from the authorities.

Hien said he has never received any official notice or guidance explaining the payment process, the organizations authorized to collect the royalties, the scope of the regulation, or how commercial music use differs from playing music through a personal streaming account.

“My biggest question is not just how much we have to pay, but who we should pay, what exactly the fee covers, and whether paying for music streaming subscriptions already meets the requirement,” a café owner on Lam Van Ben Street in Ho Chi Minh City added.

Nguyen Phuc Hung, deputy operations director of the BreadTalk bakery chain, said the company had signed a contract with and obtained copyright licensing services through an authorized service provider. Even so, it continues to receive emails, official letters, and notices questioning whether it has obtained the necessary music licenses.

"We are concerned that coordination and information sharing among organizations involved in copyright management and licensing are still not well synchronized," Hung said.

"It also creates unnecessary administrative work for businesses that have already fulfilled their obligations."

Many small business owners said they hope the authorities will establish a more accessible copyright licensing system, introduce flexible monthly and annual payment plans, publish transparent lists of licensed works, and provide a clear implementation roadmap so businesses have sufficient time to adapt.

According to lawyer Hoang Ha, the biggest challenge is not collecting royalties but building trust. Businesses that use copyrighted music need to know how the fees they pay are distributed.

"Creators also need access to a transparent, fair, and verifiable royalty distribution system,” Ha said.

“If the distribution mechanism lacks transparency, it will be difficult to gain the trust of both copyright users and rights holders.”

Ha said Vietnam should continue improving its collective copyright management system, expand the use of technology to monitor and track how frequently copyrighted works are used, and publish the royalty distribution process.

These are measures that many countries with well-developed music industries have adopted for years, he added.

Artists welcome copyright protection, but some voice concerns

While many artists support stronger copyright protection, some have also expressed concerns about how the policy is implemented.

Singer Phuong Thanh said charging royalties is necessary but should be flexible and proportionate for small businesses, allowing them to operate while ensuring music continues to be enjoyed freely and bring comfort to people.

"When my songs are played in public places, it shows they have gone viral and become part of everyday life. I'm always happy when cafés and restaurants play my music,” singer Noo Phuoc Thinh added.

“Personally, I would like to allow the use of the related rights I own free of charge. I enjoy hearing my voice and my music in public.”

Singer-songwriter Nguyen Thanh Hung shares the same view. He said he would only authorize VCPMC to collect royalties from large cafés that host ticketed live music nights or stage performances with sizable audiences.

Hung has also asked VCPMC to stop collecting royalties on his behalf from all cafés, restaurants, hotels, karaoke venues, and similar establishments.