Highlights of multi-level marketing business management in Vietnam
The Vietnamese Government has issued Decree 18/2023/ND-CP amending and supplementing Decree 40/2018/ND-CP (March 12, 2018) on multi-level marketing (MLM) business in Vietnam. Male. The purpose of Decree 18 is to remove organizations and individuals that do not strictly comply with MLM business regulations from the market, preventing businesses from using online activities to avoid supervision and control. Investigate and regulate MLM retail sales to end consumers. Decree 18 takes effect from June 20, 2023.
Decree 18/2023/ND-CP (Decree 18) on multi-level marketing (MLM) business management was issued on April 4, 2023. Here, Ecovis experts list some key points that They feel businesses should focus on:
- A foreign investor or foreign-invested business organization that is an owner, member or shareholder of an MLM registered organization must have at least three years of continuous operation in an MLM business in that country. other countries or territories.
This condition can reduce the risk of large-scale fraud by screening foreign investors’ experience in MLM operations before they enter the Vietnamese market. - To tighten strict management of multi-level business activities, a business license permitting retail distribution, including retail activities through MLM in the case of foreign investors and economic organizations, must be submitted. foreign invested capital is the owner, member or shareholder of the enterprise.
- The general requirements for an MLM business are:
- Organizations or individuals are not allowed to register for an MLM business if they were previously a member, owner or shareholder of an MLM business whose registration certificate was revoked according to MLM regulations.
- Enterprises that do not have headquarters, branches, representative offices, or business locations in the province must appoint a local person to be the contact point with local authorities. This individual must be well-trained, pass knowledge tests, and have their knowledge confirmed by the Ministry of Industry and Trade.
- Enterprises must notify the Department of Industry and Trade before conducting conferences, seminars, and online training.
- Businesses must ensure that at least 20% of MLM revenue during the fiscal year is generated from customers who are not MLM participants of the business.