In today’s service business environment, music is considered an important factor in creating ambiance, enhancing customer experience, and attracting patrons to coffee shops. However, together with the development of copyright and related rights protection mechanisms in Vietnam, the use of music in commercial settings has become one of the issues that frequently gives rise to disputes and royalty payment obligations.
In practice, many coffee shop owners assume that playing music from YouTube, Spotify, or other online platforms constitutes ordinary use and therefore does not require compliance with any additional legal obligations. Nevertheless, such understanding is not entirely consistent with the current intellectual property laws of Vietnam.
Current legislation does not provide a specific definition of “copyright”; however, copyright may generally be understood as the legal rights of authors or copyright owners over their works, including the rights to use, reproduce, distribute, and publicly present such works. Copyright protects works such as books, music, films, software, and artworks in order to prevent unauthorized use by others. Copyright protection is granted for a certain period of time, after which the work may enter the public domain.
“What are royalties?” Pursuant to Clause 10a Article 4 of the 2005 Law on Intellectual Property (as amended and supplemented by Point a Clause 1 Article 1 of Law No. 07/2022/QH15):
“Royalties are payments made for the creation or transfer of copyright and related rights to works, performances, audio recordings, video recordings, and broadcasts, including remuneration and other forms of compensation.”
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Pursuant to Point b Clause 1 Article 26 of the current Law on Intellectual Property:
“Where a work has been authorized by the copyright owner to be fixed in a published audio or video recording for commercial purposes, organizations and individuals using such audio or video recordings in commercial and business activities are not required to obtain permission, but must pay royalties...”
In addition, Point b Clause 1 Article 33 of the Law on Intellectual Property provides:
“Organizations and individuals using published audio or video recordings for commercial purposes in business and commercial activities are not required to obtain permission but must pay royalties as agreed to performers, producers of audio or video recordings, and broadcasting organizations from the time of use; where no agreement can be reached, implementation shall comply with Government regulations. The Government shall provide detailed regulations on the business and commercial activities specified in this point.”
Accordingly, for musical works lawfully released to the market for commercial purposes, coffee shops using such music in their business operations are not required to obtain prior permission from each author, singer, or producer; however, they are still obligated to pay royalties to the relevant rights holders in accordance with the law.
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Article 34 of Decree No. 17/2023/ND-CP specifically provides that the following activities are considered commercial exploitation of music: restaurants, coffee shops, hotels, supermarkets, shopping malls, bars, karaoke establishments, gyms, spas, and other businesses of a similar nature.
From a legal perspective, when a coffee shop uses music to create ambiance, attract customers, and support its business activities, such use is regarded as exploitation of copyrighted works in a commercial environment.
Therefore, the law recognizes this as commercial exploitation of musical works, thereby giving rise to financial obligations toward rights holders.
Many people believe that because they already pay for Spotify Premium accounts or legally use YouTube, no additional royalty payments are required.
However, it is important to distinguish between personal-use rights and commercial-use rights, which are entirely different in scope. Most online music platforms currently grant licenses only for personal use and do not include rights for commercial exploitation in business activities.
Therefore, when a coffee shop uses music from such platforms to serve customers, such use may still be regarded as commercial exploitation and may give rise to royalty payment obligations under Vietnamese law.
Pursuant to Article 34 of Decree No. 17/2023/ND-CP and Article 11 of Decree No. 134/2026/ND-CP:
Organizations and individuals using works, audio recordings, or video recordings as prescribed above are obligated to directly contact copyright owners, performers, owners of related rights to audio/video recordings, or collective management organizations representing copyright and related rights holders regarding exploitation and use, provide lists and durations of the works or recordings used, and pay royalties in accordance with regulations.
Where the copyright owner, performer, or related rights holder of an audio/video recording cannot be identified or contacted, the organization or individual using such works or recordings must fulfill its obligations through the competent state authority.
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In addition, where broadcasts containing works, audio recordings, or video recordings are simultaneously retransmitted, rebroadcast, relayed, transmitted by cable, through electronic information networks, telecommunications networks, the Internet, or any other technical means, the broadcasting organization producing the program is responsible for coordinating with organizations or individuals conducting such transmission, relay, or retransmission in providing lists and durations of the works and recordings used in order to fulfill obligations toward copyright owners and related rights holders.
Note: Where no agreement can be reached, royalties must be paid according to the rates set out in Appendix II of Decree No. 17/2023/ND-CP. Specifically, the annual royalty payment is calculated as follows:
Royalty amount payable per year = Statutory base salary × Adjustment coefficient
(The adjustment coefficient is determined based on seating capacity or business area/location corresponding to the year of use.)
In conclusion, coffee shops using music are not required to obtain prior permission but are obligated to pay royalties to copyright owners, performers, and related rights holders of audio/video recordings from the time such music is used, in accordance with agreed terms.
In practice, many businesses only begin reviewing music copyright compliance after receiving payment demands or becoming involved in disputes. Therefore, proactively ensuring compliance from the outset is always the safer and more cost-effective long-term solution.
INLaw Viet Nam has accompanied and supported numerous businesses, coffee shops, restaurants, and service chains in matters relating to performance licensing, music copyright, copyright and related rights protection.
If your business requires risk assessment or specialized intellectual property legal consultation, please contact INLaw Viet Nam for practical and effective legal support.
