Multi-Level Marketing Activities Set for Overhaul
The regulation of multi-level marketing activities in Vietnam could soon be overhauled, after the Ministry of Industry and Trade (“MOIT”) concluded a recent public consultation on a new draft decree.
The Draft Decree amending and supplementing Decree No. 40/2018/ND-CP dated 12 March 2018 was put out for consultation on 18 June. It proposed three notable changes to the current regulations on multi-level marketing activities:
First, the definition of a ‘multi-level marketing enterprise’ has been narrowed and clarified in the draft decree. It has added a condition that such an enterprise is one which the competent authorities have licensed to perform multi-level marketing activities.
Second, foreign investors who wish to establish a multi-level marketing enterprise or to invest in such an enterprise through share purchase or capital contribution would need to have at least three consecutive years of experience in this line of business in other countries.
Third, the draft decree proposes a definition of ‘conferences, seminars, or training’ as these relate to multi-level marketing activities. These are defined as activities with multiple participants regarding such activities. Furthermore, the host will have an obligation to inform the provincial Department of Industry & Trade (“DOIT”) if the number of guests reaches a certain threshold.
The draft decree proposes raising this threshold from 30 to 50 participants compared to the old regulations, or from 10 to 30 if those participants are multi-level marketing entities. Meanwhile, the timeline for the DOIT to issue permission for these ‘conferences, seminars, or training’ has increased from five to seven days.
Following the closure of the public consultation, the draft decree is under further consideration and review. APFL & Partners will continue to monitor this draft as it develops.
To find out more about these proposed changes, or about doing business in Vietnam, just contact our team on: contact@apflpartners.com
