Latest eligibility requirements for multi-level marketing (MLM) registration in Vietnam 2023

Latest eligibility requirements for multi-level marketing (MLM) registration in Vietnam 2023 (Internet image)

The Government promulgated Decree 18/2023/ND-CP amending Decree 40/2018/ND-CP on management of business activities by multi-level method

1. Latest eligibility requirements for multi-level marketing (MLM) registration in Vietnam 2023

Specifically, in Clause 1, Article 7 of Decree 40/2018/ND-CP (amended in Decree 18/2023/ND-CP), an applicant for MLM registration is required to fulfill all of the following requirements:

- It must be an enterprise that is duly established under the laws of Vietnam in the territory of Vietnam and has never had a MLM registration certificate revoked;

- It must have at least VND 10 billion of charter capital;

- Partners of partnerships, owners of sole proprietorships or single-member limited liability companies, members of multiple-member limited liability companies, shareholders of joint stock companies, and legal representatives of companies must not include organizations or individuals who have held the same positions above of any MLM enterprises whose MLM registration certificate has been withdrawn according to Decree 42/2014/ND-CP and Decree 40/2018/ND-CP while such enterprises are performing MLM activities;

(Currently, according to Decree 40/2018/ND-CP, the requirement is the partners, if the MLM company is a partnership, the proprietor, if the MLM company is a private enterprise or a single-member limited liability company, the members, if the MLM company is a limited liability company of two or more members, the founders, if the MLM company is a joint-stock company,

Or the legal representative of the MLM company must have never held one of the said positions at a MLM company whose MLM registration certificate has been revoked in accordance with regulations of Decree 42/2014/ND-CP and regulations in Decree 40/2018/ND-CP;)

- It must deposit money at a commercial bank or a branch of foreign bank locating in Vietnam as regulated in Clause 2 Article 50 of Decree 40/2018/ND-CP;

- Its MLM contract forms, business rule, compensation plan and training programs must be available, obvious, transparent and conformable with regulations in Decree 40/2018/ND-CP;

- It must develop an information technology system to manage participants in the MLM and a website to provide information about its profiles and MLM activities;

- It must develop a communications system to receive and take actions against complaints or queries of MLM participants.

- In case the registering organization is an enterprise whose owners or members or shareholders are foreign investors or foreign-invested business organizations, all of these foreign investors or foreign-invested business organizations need to have at least 03 years of continuous operation of MLM business in a certain country or territory.

(Additional regulation to Decree 40/2018/ND-CP)

2. Application for MLM registration certificate in Vietnam

An application for the MLM registration certificate includes the following documents (which must bear the applicant's stamp):

(1) The application form for the MLM registration certificate made according to the Form No. 01 in the Appendix enclosed with Decree 40/2018/ND-CP. 

(2) A copy of the certificate of company registration or other paper with the same value.

(3) 01 list attached to the copy of personal legal documents (identity card or personal identity or passport of Vietnamese; passport and lawful residence document issued by Vietnam competent authorities for foreigners who have permanent residences in Vietnam; passports for foreigners who are Vietnam non-residents) of the persons mentioned in point c clause 1 Article 7 of Decree 40/2018/ND-CP.

(Currently in Decree 40/2018/ND-CP, the application include the list of persons mentioned in Point c Clause 1 Article 7 in Decree 40/2018/ND-CP, enclosed with copies of their personal identity papers (ID card or citizen identity card or passport if that is a Vietnamese citizen;

Passport and certificate of registration of temporary residence issued by a Vietnamese authority if that is a foreigner permanently residing in Vietnam; passport if that is a foreigner who does not permanently reside in Vietnam))

01 copy of the legal document about establishment of the organization (in case the applicant is an organization.

(4) 02 sets of documents concerning the applicant’s MLM activities, including:

- The MLM contract form;

- The compensation plan;

- The basic training program;

- The business rule.

(5) The list of products sold through the MLM, including: Name, type, origin, packaging specifications, warranty (if any), selling price, point volume calculated based upon the selling price, and time of application.

(6) The original of the bank’s confirmation of compulsory deposit.

(7) Technical specifications towards information technology system to manage MLM networks under Article 44 of this Decree which contain the following basic information:

- The IP address of the server and location of the physical server;

- Operating mechanism of the system, including system description, method for entering, storing and managing data;

- The information specified in Article 44 of Decree 40/2018/ND-CP.

(Currently, it is not required to have the basic information contained in the documents proving that the business has a website)

(8) Documents proving that the applicant’s website meets the requirements in Article 45 in Decree 40/2018/ND-CP.

(9) Documents proving the applicant’s communications system used for receiving and taking actions against complaints or queries of MLM participants.

(10) Copy of the audited financial statement or document confirming fulfillment of tax obligations or financial obligations of the last 03 fiscal years, or equivalent document issued or certified by a competent agency or organization proving fulfillment of the conditions specified in Point h Clause 1 Article 7 of Decree 40/2018/ND-CP in case the enterprise's owners, members or shareholders are foreign investors or foreign-invested business organizations."

(11) The business license that allows retail distribution, including retailing through MLM in case the enterprise's owners, members or shareholders are foreign investors or foreign-invested business organizations.

(Article 9 of Decree 40/2018/ND-CP (amended in Decree 18/2023/ND-CP)

Decree 18/2023/ND-CP takes effect from June 20, 2023.

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