Decree 40/2018/Vietnam on Multi-level marketing

Mục lục . Content

1. Decree 40/2018/ND-CP on Multi-level marketing,

2. Decree 18/2023/ND-CP (Amending Decree 40/2018/ND-CP).

(English – Tiếng Anh)

1. Decree 40/2018/ND-CP on Multi-level marketing

DECREE 40/2018/ND-CP

March 12, 2018

On the management of multi-level marketing activities

Pursuant to the June 19, 2015 Law on Organization of the Government;

Pursuant to the December 3, 2004 Competition Law;

Pursuant to the November 26, 2014 Investment Law, and the November 22, 2016 Law Amending and Supplementing Article 6 of, and Appendix 4 on the list of conditional business lines and sectors to, the Investment Law;

At the proposal of the Minister of Industry and Trade;

The Government promulgates the Decree on management of multi-level marketing activities.

Chapter I. GENERAL PROVISIONS

Article1. Scope of regulation

This Decree prescribes multi-level marketing activities and the management thereof.

Article2. Subjects of application

This Decree applies to multi-level marketing enterprises and participants and other organizations and persons involved in multi-level marketing activities.

Article3. Interpretation of terms

In this Decree, the terms below are construed as follows:

1. Multi-level marketing means a business using a multi-level and multi-branch network of participants who earn commissions, bonuses and other economic benefits derived from their own and other participants’ sales results.

2. Multi-level marketing enterprise means an enterprise that organizes its business by the multi-level marketing mode to sell goods.

3. Multi-level marketing participant means a person who enters into a multi-level marketing contract with a multi-level marketing enterprise.

4. Multi-level marketing contract means a written agreement on participation in a multi-level marketing network between a person and a multi-level marketing enterprise.

5. Rules of operation means a set of rules developed by a multi-level marketing enterprise to regulate acts of multi-level marketing participants, and the process and procedures for carrying out multi-level marketing activities.

6. Compensation plan means a plan used by a multi-level marketing enterprise to calculate commissions, bonuses and other economic benefits earned by multi-level marketing participants from their own and other network participants’ sales results.

7. Multi-level marketing position or identification number means the position or identification number of a multi-level marketing participant arranged in a network to be used for calculation of commissions, bonuses and other economic benefits to be paid to such participant. 

Article4. Objects of multi-level marketing

1. Multi-level marketing activities may only be carried out for goods. Multi-level marketing of objects other than goods is prohibited, unless otherwise provided by law.

2. The following goods may not be traded by the mode of multi-level marketing:

a/ Medicines; medical equipment; veterinary drugs (including aquatic veterinary drugs); pesticides; chemicals, insecticidal and germicidal preparations restricted or banned from domestic and medical use; and dangerous chemicals;

b/ Digital content products.

Article5. Prohibited acts in multi-level marketing

1. A multi-level marketing enterprise is prohibited from:

a/ Requesting a person to deposit or pay a certain sum of money in order to enter into a contract on participation in multi-level marketing;

b/ Requesting a person to buy a certain quantity of goods in order to enter into a contract on participation in multi-level marketing;

c/ Permitting a multi-level marketing participant to receive money or other economic benefits from luring another person into participating in multi-level marketing but not from buying goods from or selling goods to such person;

d/ Refusing to pay, without any plausible reason, commissions, bonuses or other economic benefits to multi-level marketing participants;

dd/ Providing false information about the compensation plan and benefits from the participation in the multi-level marketing network;

e/ Providing false or misleading information about properties and utilities of its goods or activities through its presenters or trainers at conferences, seminars or training courses or through its documents;

g/ Maintaining more than one contract on participation in multi-level marketing, multi-level marketing position or identification number or other similar forms for the same multi-level marketing participant;

h/ Conducting sales promotion using a multiple-level and multiple-branch network in which a sales promotion program participant has more than one position, identification number or other similar forms;

i/ Organizing commercial intermediation activities in accordance with the commercial law to serve the maintenance, expansion and development of the multi-level marketing network;

k/ Receiving or accepting written requests or documents in any form from multi-level marketing participants declaring that they partially or wholly waive their rights under this Decree or free the enterprise from fulfilling its obligations toward them under this Decree;

l/ Trading by the multi-level marketing mode in the banned objects specified in Article 4 of this Decree;

m/ Failing to use the system of management of multi-level marketing participants already registered with the agency that has granted its multi-level marketing registration certificate to manage multi-level marketing participants;

n/ Buying, selling or transferring the network of multi-level marketing participants to another enterprise, except the case of enterprise acquisition, consolidation or merger.

2. A multi-level marketing participant is prohibited from:

a/ Taking the act specified at Point a, Clause 1 of this Article;

b/ Providing false or misleading information about benefits from the participation in multi-level marketing, or properties and utilities of goods or activities of the multi-level marketing enterprise;

c/ Holding seminars, conferences or training courses on multi-level marketing without being authorized in writing by the multi-level marketing enterprise;

d/ Luring, inducing or buying off multi-level marketing participants of other enterprises to participate in the network of the enterprise in which he/she is participating;

dd/ Taking advantage of his/her position, powers, social position or occupation to encourage, request, lure or induce other persons to participate in the multi-level marketing network or buy goods traded by the multi-level marketing mode;

e/ Carrying out multi-level marketing activities in the locality where the enterprise has not yet been granted a multi-level marketing registration certificate.

3. When possessing no multi-level marketing registration certificate, organizations and individuals conducting business by the multi-level marketing mode are prohibited from organizing conferences, seminars or training courses on or introducing their own or  other organizations’ and individuals’ multi-level marketing activities, unless otherwise provided by law.

4. Individuals are prohibited from participating in activities organized by organizations and individuals conducting business by the multi-level marketing mode that have no multi-level marketing registration certificate, unless otherwise provided by law.

Chapter II. REGISTRATION OF MULTI-LEVEL MARKETING ACTIVITIES

Article 6. Registration of multi-level marketing activities

Multi-level marketing activities shall be registered under this Decree.

Article 7. Conditions for registration of multi-level marketing activities

1. An organization wishing to register its multi-level marketing activities must satisfy the following conditions:

a/ Being an enterprise lawfully established in Vietnam under law and having never had its multi-level marketing registration certificate revoked;

b/ Having a charter capital of at least VND 10 billion;

c/ Partners, for a partnership; the owner, for a private enterprise or single-member limited liability company; members, for a limited liability company with two or more members; founding shareholders, for a joint-stock company, and the at-law representative of the enterprise, must not be organizations or individuals that have held one of the above positions in a multi-level marketing enterprise which has had its multi-level marketing registration certificate revoked under the Government’s Decree No. 42/2014/ND-CP of May 14, 2014, on management of multi-level marketing activities, and this Decree;

d/ Opening an escrow account at a commercial bank or foreign bank branch in Vietnam under Clause 2, Article 50 of this Decree;

dd/ Having a clear and transparent model contract on participation in multi-level marketing, rules of operation, compensation plan and basic training program in accordance with this Decree;

e/ Having an information technology system for managing the network of multi-level marketing participants and a website providing information about the enterprise and its multi-level marketing activities;

g/ Having an information and communication system for receipt and settlement of inquiries and complaints of multi-level marketing participants.

2. An enterprise registering multi-level marketing activities shall make a dossier of application for a multi-level marketing registration certificate under Article 9 of this Decree and take responsibility for the legal validity of such dossier.

Article 8. Multi-level marketing registration certificates

1. A multi-level marketing registration certificate is valid for 5 years from the date of grant.

2. A multi-level marketing registration certificate shall be made in 2 originals, 1 to be handed to the registering enterprise and 1 to be kept at the Ministry of Industry and Trade.

3. A multi-level marketing registration certificate must contain the following details: name of the enterprise; information in the enterprise registration certificate/investment registration certificate (if any): business identification number, place and date of first-time grant, date of latest modification; address of the head office, telephone and fax numbers, website and email address; information about the at-law representative: his/her full name, citizenship, information of his/her identity card/passport, position, registered place of permanent residence/sojourn; types of goods permitted to be traded by the multi-level marketing mode.

Article 9. Dossier of application for a multi-level marketing registration certificate

A dossier of application for a multi-level marketing registration certificate must comprise the following documents (bearing the enterprise’s certification seal):

1. An application for a multi-level marketing registration certificate, made according to Form No. 01 provided in the Appendix to this Decree.

2. One copy of the enterprise registration certificate or a document of equivalent legal validity.

3. A list of persons specified at Point c, Clause 1, Article 7 of this Decree enclosed with copies of their valid personal identification papers (people’s identity card or citizen identity card or passport, for individuals holding Vietnamese citizenship; passport and temporary residence registration paper granted by a competent Vietnamese agency, for foreigners permanently residing in Vietnam; passport, for foreigners not permanently residing in Vietnam).

4. Two sets of documents related to multi-level marketing activities of the enterprise, including:

a/ Model contract on participation in multi-level marketing;

b/ Compensation plan;

c/ Basic training program;

d/ Rules of operation.

5. A list of goods to be traded by the enterprise by the multi-level marketing mode, indicating names, types, origin, packaging specifications, warranty regime (if any), selling prices and convertible bonus scores corresponding to selling prices, and time of application.

6. One original of the written certification of the escrow account.

7. Documents providing technical explanations about the information technology system for management of the network of multi-level marketing participants satisfying the conditions prescribed in Article 44 of this Decree.

8. Documents proving that the enterprise has a website satisfying the conditions prescribed in Article 45 of this Decree.

9. Documents proving that the enterprise has an information and communication system for receipt and settlement of inquiries and complaints of multi-level marketing participants.

Article 10. Order and procedures for grant of multi-level marketing registration certificates

1. Receipt of dossiers

a/ An enterprise registering its multi-level marketing activities shall submit 1 dossier prescribed in Article 9 of this Decree (enclosed with an electronic file in “doc.” and “xls.” format) to the Ministry of Industry and Trade (directly or by post);

b/ Within 5 working days after receiving the dossier, the Ministry of Industry and Trade shall examine its completeness and validity. In case the dossier is incomplete and invalid, the Ministry of Industry and Trade shall notify such in writing to the registering enterprise for dossier modification and/or supplementation;

c/ In case the registering enterprise fails to modify and/or supplement its dossier at the request of the Ministry of Industry and Trade within 30 days after being notified in writing, the Ministry of Industry and Trade shall return the dossier to the enterprise.

2. Appraisal of dossiers

a/ After receiving a complete and valid dossier, the Ministry of Industry and Trade shall notify such to the registering enterprise for paying an appraisal charge. The Ministry of Industry and Trade shall return the dossier if the registering enterprise fails to pay the appraisal charge within 30 days after being notified to pay;

b/ The Ministry of Industry and Trade shall appraise the dossier within 20 working days after receiving the appraisal charge;

c/ Contents of appraisal:

– Giving a written certification of the authenticity of the written certification of the escrow account to the bank where the enterprise opens such account;

– Appraising contents of documents in the dossier, ensuring their conformity with the provisions of this Decree.

d/ In case the dossier does not fully satisfy the conditions prescribed in this Decree, the Ministry of Industry and Trade shall notify such in writing to the registering enterprise, requesting modification and/or supplementation of the dossier. The enterprise may submit documents to complete the dossier only once within 30 days after receiving the Ministry of Industry and Trade’s notification.

The time limit for appraising a modified and/or supplemented dossier is 15 working days after the Ministry of Industry and Trade receives it.

3. Return of dossiers

In case an enterprise fails to modify and/or supplement its dossier within the time limit prescribed at Point d, Clause 2 of this Article or its dossier does not satisfy the conditions prescribed in this Decree after being modified and/or supplemented, the Ministry of Industry and Trade shall notify in writing the enterprise of the return of its dossier, clearly stating the reason for return.

4. Grant of multi-level marketing registration certificates

In case the dossier of an enterprise fully satisfies the conditions prescribed in this Decree, the Ministry of Industry and Trade shall grant a multi-level marketing registration certificate, made according to Form No. 02 provided in the Appendix to this Decree, and return the enterprise one copy of each of the documents specified in Clause 4 of this Decree which bears its seal on top of every page or appended on the edges of adjoining pages.

5. Within 10 working days after granting a multi-level marketing registration certificate, the Ministry of Industry and Trade shall announce such on its website, notify to the bank where the enterprise opens the escrow account, and provide a copy of the certificate enclosed with copies of the documents specified in Clauses 4 and 5, Article 9 of this Decree to the provincial-level Departments of Industry and Trade nationwide by one the following modes:

a/ Sending them by post;

b/ Sending them via email;

c/ Providing them via its information technology system for multi-level marketing management.

Article 11. Modification and supplementation of multi-level marketing registration certificates

1. A multi-level marketing enterprise shall carry out the procedures to request modification and supplementation of its multi-level marketing registration certificate in the following cases:

a/ There is a change in information about the enterprise, including its name, at-law representative, head office address, founding shareholders, member being its owner, and opening of the escrow account. In this case, it shall carry out the procedures for modification and supplementation of its multi-level marketing registration certificate within 15 working days after the change is certified by a competent agency;

b/ With regard to a change in the documents specified in Clause 4, 7, 8 or 9, Article 9 of this Decree, it shall carry out the procedures for modification and supplementation of its multi-level marketing registration certificate before effecting the change.

2. With regard to a change in information in the list of goods traded by the multi-level marketing mode, an enterprise shall notify the change in writing to the Ministry of Industry and Trade before effecting it.

Article 12. Dossiers, order and procedures for modification and supplementation of multi-level marketing registration certificates

1. A dossier of request for modification and supplementation of a multi-level marketing registration certificate must comprise:

a/ A written request for modification of the multi-level marketing registration certificate, made according to Form No. 03 provided in the Appendix to this Decree;

b/ The original multi-level marketing registration certificate granted by the Ministry of Industry and Trade;

c/ The documents specified in Article 9 of this Decree related to the modified and supplemented contents of the multi-level marketing registration certificate.

2. The order and procedures for modification and supplementation of a multi-level marketing registration certificate must comply with Article 10 of this Decree.

3. Order and procedures for notification and supplementation of a change in the list of goods traded by multi-level marketing mode:

a/ An enterprise shall directly submit or send by post to the Ministry of Industry and Trade a notice of change in information in the list of goods traded by multi-level marketing mode, clearly stating changed contents, enclosed with the changed list;

b/ In case of a request for modification and supplementation, the Ministry of Industry and Trade shall issue a notice of modification and supplementation within 15 working days after receiving the dossier of request.

An enterprise may apply the list of goods permitted for trading by the multi-level marketing mode if the Ministry of Industry and Trade does not request modification and/or supplementation of the dossier within 15 working days after receiving such dossier;

c/ The Ministry of Industry and Trade shall notify, by one of the modes specified in Clause 5, Article 10 of this Decree, the provincial-level Departments of Trade and Industry nationwide of the enterprise’s notification of change in the list of goods traded by the multi-level marketing mode.

Article13. Re-grant of multi-level marketing registration certificates

1. In case its multi-level marketing registration certificate is lost, torn or destroyed, a multi-level marketing enterprise shall directly submit or send by post to the Ministry of Industry and Trade a request for re-grant of the multi-level marketing registration certificate, made according to Form No. 04 provided in the Appendix to this Decree.

2. Within 10 working days after receiving a valid request for re-grant of a multi-level marketing registration certificate, the Ministry of Industry and Trade shall re-grant such certificate.

Article14. Extension of multi-level marketing registration certificates

1. A multi-level marketing registration certificate may be extended multiple times, with each extension lasting 5 years.

2. A multi-level marketing enterprise may have its multi-level marketing registration certificate extended when it satisfies the conditions prescribed in Article 7 of this Decree.

3. At least 3 months before its multi-level marketing registration certificate expires, a multi-level marketing enterprise shall carry out the procedures for extension of such certificate.

4. A dossier of request for extension of a multi-level marketing registration certificate must comprise:

a/ A written request for extension of the multi-level marketing registration certificate, made according to Form No. 05 provided in the Appendix to this Decree;

b/ The documents specified in Clauses 2 and 3, Article 9 of this Decree;

c/ The documents specified in Clauses 4 thru 9, Article 9 of this Decree in case of a change compared to the latest modified and supplemented multi-level marketing registration certificate.

5. The order and procedures for extension of multi-level marketing registration certificates must comply with Article 10 of this Decree.

Article 15. Appraisal charges for grant of multi-level marketing registration certificates

1. Appraisal charges for grant of multi-level marketing registration certificates include charges for grant, modification and supplementation and extension of multi-level marketing registration certificates.

2. Charge rates, collection, remittance, management and use of appraisal charges for grant of multi-level marketing registration certificates must comply with regulations.

Article 16. Revocation of multi-level marketing registration certificates

1. The Ministry of Industry and Trade shall revoke a multi-level marketing registration certificate in the following cases:

a/ The enterprise registration certificate or paper of equivalent legal validity is revoked or the enterprise concerned is dissolved or falls bankrupt in accordance with law;

b/ The dossier of application for the certificate contains untruthful information;

c/ The enterprise is fined in accordance with law for one of the violations specified in Clause 1, Article 5, or Clause 3, Article 47, of this Decree in the course of organizing its multi-level marketing activities;

d/ The enterprise fails to fully satisfy the conditions prescribed in Article 7 of this Decree when carrying out multi-level marketing activities at the request of a competent agency in charge of multi-level marketing management.

2. A multi-level marketing registration certificate is invalidated after the decision on revocation of such certificate takes legal effect.

3. Order and procedures for revocation of multi-level marketing registration certificates:

a/ The Ministry of Industry and Trade shall issue a decision to revoke a multi-level marketing registration certificate in one of the cases specified in Clause 1 of this Article;

b/ Within 10 working days after a decision on revocation of a multi-level marketing registration certificate takes effect, the Ministry of Industry and Trade shall notify such to the provincial-level Departments of Industry and Trade nationwide by one of the modes specified in Clause 5, Article 10 of this Decree and announce it on its website.

Article 17. Termination of multi-level marketing activities

1. Cases of termination of multi-level marketing activities:

a/ The multi-level marketing registration certificate expires without being extended under Article 14 of this Decree;

b/ The enterprise voluntarily terminates its multi-level marketing activities;

c/ The multi-level marketing registration certificate is revoked by a competent agency.

2. When terminating its multi-level marketing activities, an enterprise shall:

a/ Notify such in writing to the Ministry of Industry and Trade, post up the termination decision at its head office, branches, representative offices and business places, and announce such decision on its website;

b/ Terminate and liquidate contracts on participation in multi-level marketing and guarantee benefits of multi-level marketing participants in accordance with the law on management of multi-level marketing activities;

c/ Fulfill its obligations under a competent agency’s decision on handling of violations in multi-level marketing activities.

Article18. Order and procedures for termination of multi-level marketing activities

1. In case an enterprise terminates its multi-level marketing activities at its own will:

a/ A dossier for notification of termination of multi-level marketing activities must comprise:

– A notice of termination of multi-level marketing activities, made according to Form No. 06 provided in the Appendix to this Decree;

– A report, made according to Form No. 15 provided in the Appendix to this Decree;

– One copy of the latest modified enterprise registration certificate or a paper of equivalent legal validity;

– The original multi-level marketing registration certificate;

– One copy of the decision on termination of multi-level marketing activities of the owner of the private enterprise or single-member limited liability company; the decision and minutes of the meeting on termination of multi-level marketing activities of the members’ council of the limited liability company with two or more members, or of the shareholders’ general meeting of the joint-stock company or partners of the partnership.

b/ Order and procedures for termination of multi-level marketing activities:

– An enterprise shall directly submit or send by post a dossier for notification of termination of multi-level marketing activities to the Ministry of Industry and Trade;

– Within 10 working days after receiving a valid dossier for notification of termination of multi-level marketing activities, the Ministry of Industry and Trade shall issue a written receipt of the dossier, and notify such to the provincial-level Departments of Industry and Trade nationwide by one of the modes specified in Clause 5, Article 10 of this Decree, and announce it on its website.

2. In case an enterprise terminates its multi-level marketing activities because its multi-level marketing registration certificate is invalided or revoked:

a/ A dossier for notification of termination of multi-level marketing activities must comprise:

– A notice of termination of multi-level marketing activities, made according to Form No. 06 provided in the Appendix to this Decree;

– A report, made according to Form No. 15 provided in the Appendix to this Decree;

– One copy of the latest modified enterprise registration certificate or a paper of equivalent legal validity;

– The original multi-level marketing registration certificate.

b/ Order and procedures for termination of multi-level marketing activities:

– Within 30 working days after having its multi-level marketing registration certificate invalided or revoked, an enterprise shall directly submit or send by post a dossier for notification of termination of multi-level marketing activities to the Ministry of Industry and Trade;

– Within 10 working days after receiving a valid dossier for notification of termination of multi-level marketing activities, the Ministry of Industry and Trade shall issue a written receipt of the dossier, and notify such to the provincial-level Departments of Industry and Trade nationwide by one of the modes specified in Clause 5, Article 10 of this Decree, and announce it on its website.

Chapter III. MANAGEMENT OF MULTI-LEVEL MARKETING ACTIVITIES IN LOCALITIES

Article 19. Multi-level marketing activities in localities   

A multi-level marketing enterprise may be regarded as having conducted multi-level marketing activities in a locality if:

1. It has its head office, a branch or representative office performing functions related to multi-level marketing activities in the locality.

2. It organizes conferences, seminars or training courses on multi-level marketing activities in the locality.

3. It has its multi-level marketing participants permanently or temporarily residing or conducting out marketing or selling activities by the multi-level marketing mode in the locality.

Article 20. Registration of multi-level marketing activities in localities

1. A multi-level marketing enterprise shall carry out the registration procedures at the provincial-level Department of Industry and Trade and may only organize multi-level marketing activities after obtaining a written certification of registration of multi-level marketing activities from this Department.

2. In case of having no office, branch or representative office in a locality, a multi-level marketing enterprise shall authorize an individual residing in the locality to act as its local representative to work on its behalf with local state management agencies.

3. A multi-level marketing enterprise shall archive and produce dossiers and documents related to its multi-level marketing activities in a locality at the request of a competent management agency.

Article 21. Dossiers, order and procedures for registration of multi-level marketing activities in localities

1. A dossier for registration of multi-level marketing activities in a locality must comprise:

a/ A written request for registration of multi-level marketing activities in the locality, made according to Form No. 07 provided in the Appendix to this Decree;

b/ One copy of the enterprise registration certificate or a paper of equivalent legal validity;

c/ One copy of the multi-level marketing registration certificate;

d/ One copy of the operation registration certificate of the branch or representative office, business location registration certificate (if any) or one power of attorney for the local representative, enclosed with one certified copy of the people’s identity card or citizen identity card or passport of such representative in case the enterprise has no head office, branch or representative office in the locality.

2. An enterprise shall directly submit or send by post a dossier for registration of multi-level marketing activities in a locality enclosed with a list of multi-level marketing participants residing in the locality by the time of dossier submission in case it has conducted multi-level marketing activities in the locality before the effective date of this Decree (the list must clearly state the full name, date of birth, address of place of permanent or temporary residence, serial number of people’s identity card or citizen identity card or passport, serial number of contract on multi-level marketing participation, code number and contact telephone number of each multi-level marketing participant) to the provincial-level Industry and Trade Department of the locality where the enterprise is expected to operate.

3. In case a dossier is incomplete or invalid, the provincial-level Industry and Trade Department shall, within 5 working days after receiving it, notify such to the enterprise for dossier modification and/or supplementation. The time limit for dossier modification and/or supplementation is 15 working days after the provincial-level Industry and Trade Department issues a notice. The provincial-level Industry and Trade Department shall return the dossier in case the enterprise fails to modify and/or supplement it within the above time limit.

In case a dossier is complete and valid, the provincial-level Industry and Trade Department shall, within 7 working days after receiving it, send to the enterprise a written certification of registration of multi-level marketing activities in the locality, made according to Form No. 08 in the Appendix to this Decree. In case of refusal to give certification, the provincial-level Industry and Trade Department shall reply in writing clearly stating the reason.

4. Within 5 working days after issuing a written certification of registration of multi-level marketing activities in the locality, the provincial-level Industry and Trade Department shall announce it on its website and send a copy thereof to the Ministry of Industry and Trade by one of the modes specified in Clause 5, Article 10 of this Decree.

Article 22. Registration of change or addition of multi-level marketing activities in localities

1. In the course of multi-level marketing activities in a province or centrally run city, a multi-level marketing enterprise shall register change or addition of its multi-level marketing activities in the locality with the provincial-level Industry and Trade Department when there is a change related to:

a/ Its head office, branch, representative office or business place in the locality;

b/ Its representative in the locality.

2. Within 15 working days after a change in registration information specified in Clause 1 of this Article occurs, an enterprise shall send directly or by post its registration of change or addition, made according to Form No. 09 in the Appendix to this Decree and the documents specified at Points b and d, Clause 1, Article 21 of this Decree related to the changed or added contents to the provincial-level Industry and Trade Department.  

3. In case of an incomplete and invalid dossier, within 5 working days after receiving it, the provincial-level Industry and Trade Department shall notify such in writing to the enterprise for modification and/or supplementation of the dossier. The enterprise may modify and/or supplement its dossier only once within 15 working days after being notified by the provincial-level Industry and Trade Department. The provincial-level Industry and Trade Department shall return the dossier in case the enterprise fails to modify and/or supplement the dossier within the above time limit.

4. In case of a complete and valid dossier, within 7 working days after receiving it, the provincial-level Industry and Trade Department shall send to the enterprise a written certification of the registration of change or addition of multi-level marketing activities in the locality, made according to Form No. 10 in the Appendix to this Decree. In case of refusal to certify the registration, the provincial-level Industry and Trade Department shall reply in writing clearly stating the reason.

5. Provincial-level Industry and Trade Departments shall announce on their websites and notify to the Ministry of Industry and Trade by one of the modes specified in Clause 5, Article 10 of this Decree the certification of registration of change or addition of multi-level marketing activities of multi-level marketing enterprises in their localities.

Article 23. Revocation of certification of registration of multi-level marketing activities in localities

1. A provincial-level Industry and Trade Department shall revoke a certification of registration of multi-level marketing activities in its locality in the following cases:

a/ The dossier for registration of multi-level marketing activities in the locality contains untruthful information;

b/ The enterprise fails to carry out multi-level marketing activities for 12 consecutive months;

c/ The enterprise fails to fulfill the responsibility specified in Clause 11, Article 40 of this Decree;

d/ The multi-level marketing registration certificate of the enterprise is revoked by a competent agency.

2. Within 10 working days after issuing a decision to revoke a certification of registration of multi-level marketing activities in its locality, a provincial-level Industry and Trade Department shall announce it on its website and notify it to the Ministry of Industry and Trade by one of the modes specified in Clause 5, Article 10 of this Decree.

3. A certification of registration of multi-level marketing activities is invalidated from the date the revocation decision takes legal effect.

4. Within 30 days after its revocation decision takes legal effect, an enterprise shall carry out the procedures for terminating its multi-level marketing activities in the concerned locality under Article 24 of this Decree.

5. A provincial-level Industry and Trade Department shall refuse to re-grant a certification of registration of multi-level marketing activities in a locality within 6 months after the revocation decision takes effect, for the case specified at Point b, Clause 1 of this Article, and within 12 months for the cases specified at Points a and c, Clause 1 of this Article.

Article 24. Termination of multi-level marketing activities in localities

1. Cases of termination of multi-level marketing activities in a locality:

a/ A multi-level marketing enterprise has the certification of multi-level marketing activities in the locality revoked;

b/ A multi-level marketing enterprise voluntarily terminates its multi-level marketing activities in the locality.

2. When terminating its multi-level marketing activities in a locality, a multi-level marketing enterprise shall:

a/ Notify such in writing to the provincial-level Industry and Trade Department, publicly post up a notice of termination at its head office, branches, representative offices and business places in the locality (if any), and announce such on its website;

b/ Terminate and liquidate contracts on multi-level marketing participation and settle interests of participants in multi-level marketing activities in the locality in accordance with regulations on management of multi-level marketing activities;

c/ Fulfill its obligations under a local competent agency’s decision on handling of violations in multi-level marketing activities.

Article 25. Order and procedures for termination of multi-level marketing activities in localities

1. In case of voluntarily terminating its multi-level marketing activities in a locality, an enterprise shall submit directly or send by post a notice of such termination in the locality, made according to Form No. 11 in the Appendix to this Decree, and a report, made according to Form No. 16 in the Appendix to this Decree, to the provincial-level Industry and Trade Department.

2. In case an enterprise terminates its multi-level marketing activities due to the revocation of the certification of registration of multi-level marketing activities in the locality, it shall submit directly or send by post the documents specified in Clause 1 of this Article to the provincial-level Industry and Trade Department within 30 working days after the revocation.

3. In case an enterprise voluntarily terminates its multi-level marketing activities in a locality, within 10 working days after receiving a valid dossier of notification of termination of multi-level marketing activities, the provincial-level Industry and Trade Department shall issue a written receipt of the dossier, announce it on its website, and notify it to the Ministry of Industry and Trade by one of the modes specified in Clause 5, Article 10 of this Decree.

Article 26. Notification of organization of conferences, seminars and training courses on multi-level marketing

1. A multi-level marketing enterprise may organize conferences, seminars or training courses on multi-level marketing in the province or centrally run city where it has been granted a certification of registration of multi-level marketing activities.

2. In case a conference, seminar or training course on multi-level marketing is expected to be attended by 30 or more people or by 10 or more multi-level marketing participants, the multi-level marketing enterprise shall notify such conference, seminar or training course to the provincial-level Industry and Trade Department before organizing it.

3. A multi-level marketing enterprise shall coordinate with functional agencies in the course of performing the responsibility to monitor, inspect and supervise conferences, seminars or training courses on multi-level marketing it organizes, ensuring compliance with law.

Article 27. Dossiers, order and procedures for notification of organization of conferences, seminars and training courses on multi-level marketing

1. A dossier for notification of organization of a conference, seminar or training course on multi-level marketing must comprise:

a/ A notice of organization of a conference, seminar or training course on multi-level marketing, made according to Form No. 12 in the Appendix to this Decree;

b/ Contents and documents to be presented at the seminar and projected number of participants;

c/ A list of presenters at the conference, seminar or training course, enclosed with package hire contracts of the enterprise, clearly stating the rights and responsibilities of presenters and contents to be presented;

d/ One original of the power of attorney in case the enterprise authorizes an individual to conduct the training or organize the conference or seminar.

2. A multi-level marketing enterprise may notify the organization of more than one conference, seminar or training course on multi-level marketing in the same notice.

3. A multi-level marketing enterprise shall submit directly or send by post a dossier for notification of organization of a conference, seminar or training course on multi-level marketing to the provincial-level Industry and Trade Department at least 15 working days before the expected date of organization of such conference, seminar or training course.

4. In case of an invalid and incomplete dossier, within 5 working days after receiving it, the provincial-level Industry and Trade Department shall notify such in writing to the enterprise for modification and/or supplementation. The time limit for dossier modification and/or supplementation is 10 working days after the enterprise receives the provincial-level Industry and Trade Department’s notification.

5. An enterprise may organize a conference, seminar or training course if within 5 working days after receiving its dossier the provincial-level Industry and Trade Department makes no request for modification or supplementation.

6. In case of a change in information in its dossier for notification of organization of a conference, seminar or training course, an enterprise shall notify it in writing to the provincial-level Industry and Trade Department at least 3 working days before the expected date the change is effected.

7. In case the organization of a conference, seminar or training course has been notified to the provincial-level Industry and Trade Department but the enterprise is unable to organize such conference, seminar or training course, it shall notify such in writing to the provincial-level Industry and Trade Department before the expected date of organization stated in the dossier of notification.

Chapter IV. MANAGEMENT OF MULTI-LEVEL MARKETING PARTICIPANTS

Article 28. Conditions on multi-level marketing participants

1. A multi-level marketing participant must be a person having the full civil act capacity in accordance with law.

2. A person may not participate in multi-level marketing when:

a/ He/she is serving an imprisonment sentence or has previous convictions for producing or trading in counterfeit goods or banned goods, making deceitful advertisement, deceiving customers, appropriating property through swindling, abusing trust for appropriation of property, illegally seizuring property or violating regulations on multi-level marketing;

b/ He/she is a foreigner who has no permit to work in Vietnam granted by a competent agency, unless he/she is exempted from such a permit in accordance with law;

c/ He/she has been sanctioned for a violation of the provisions of Clause 2, 3 or 4, Article 5 of this Decree and the period upon the expiration of which he/she will be regarded as having never been sanctioned for an administrative violation has not yet expired;

d/ He/she is a person specified at Point c, Clause 1, Article 7 of this Decree;

dd/ He/she is a cadre or civil servant as defined by the law on cadres and civil servants.

Article 29. Contracts on multi-level marketing participation

1. A multi-level marketing enterprise shall enter into written contracts on multi-level marketing participation with multi-level marketing participants.

2. A contract on multi-level marketing participation must have the following principal contents:

a/ Names of the multi-level marketing enterprise and its at-law representative and its contact information;

b/ Full name, date of birth, address of the place of permanent residence (or registered place of sojourn, for foreigners), place of permanent or temporary residence, telephone number, bank account number, serial number of people’s identity card or citizen identity card or passport of the multi-level marketing participant; serial number of his/her work permit in case he/she is a foreigner;

c/ Full name and code number of the introducer (surety);

d/ Information about goods traded by the mode of multi-level marketing;

dd/ Information about the compensation plan and rules of operation;

e/ Rights and obligations of the parties in compliance with this Decree and relevant regulations;

g/ Regulations on payment of commissions and bonuses by the mode of via-bank account transfer;

h/ Regulations on redemption of goods;

i/ Cases of termination of the contract and related obligations;

k/ Mechanism of settlement of contractual disputes.

3. A contract on multi-level marketing participation must satisfy the following conditions on form and presentation:

a/ The contract must be written in Vietnamese, with letters of a font size of at least 12;

b/ The color of paper sheets of the contract must be in contrast to the ink color.

Article 30. Termination of contracts on multi-level marketing participation

1. A multi-level marketing participant may terminate his/her contract on multi-level marketing participation by sending a written notice to the multi-level marketing enterprise at least 10 working days before the termination.

2. A multi-level marketing enterprise may terminate a contract with a multi-level marketing participant when the latter violates the provisions of Article 41 of this Decree.

3. A multi-level marketing enterprise shall terminate a contract with a multi-level marketing participant when the latter violates the provisions of Clause 2, Article 5 of this Decree.

4. Within 30 working days after a contract is terminated, a multi-level marketing enterprise shall pay to the multi-level marketing participant commissions, bonuses and other economic benefits which the latter is entitled to during the participation in the multi-level marketing network of the enterprise.

Article 31. Basic training program

1. A basic training program is a mandatory training program for multi-level marketing participants.

2. Basic training covers the following:

a/ The law on multi-level marketing;

b/ Code of ethics in multi-level marketing activities;

c/ Basic contents of a contract on multi-level marketing participation, rules of operation and compensation plan;

d/ Mechanism for evaluation of completion of the basic training program suitable to training content and method.

3. The training duration is at least 8 hours.

Article 32. Basic training for multi-level marketing participants

1. A multi-level marketing enterprise shall train multi-level marketing participants under the basic training program already registered with a competent agency and may not collect any charge in any form.

2. Multi-level marketing participants shall participate in, and fully grasp contents of, the basic training program.

3. Only persons designated by a multi-level marketing enterprise to act as trainers may provide basic training for multi-level marketing participants of such enterprise.

4. A basic training program may be implemented by the following methods which can ensure interaction during training, including:

a/ Direct training;

b/ Distance training.

5. A multi-level marketing enterprise shall evaluate how well a multi-level marketing participant has completed the basic training program and certify in writing his/her completion of the basic training program in both content and duration.

6. A multi-level marketing enterprise shall preserve documents related to basic training of multi-level marketing participants, including those indicating the training duration, methods, places (if any) and results.

7. When there is a change related to the contents specified in Clause 2, Article 31 of this Decree, a multi-level marketing enterprise shall additionally train or notify such change to multi-level marketing participants on its website or publicly post up such change at its head office, branches, representative offices and business places within 30 days after such change occurs.

Article 33. Member cards

1. A multi-level marketing enterprise may only grant member cards to persons who have gone through the basic training program and made written commitments according to Form No. 13 in the Appendix to this Decree.

2. A multi-level marketing enterprise shall grant free of charge member cards to multi-level marketing participants.

3. A member card must contain the following:

a/ Name of the enterprise;

b/ Contact information of the enterprise;

c/ Photo of the multi-level marketing participant;

d/ Information about the multi-level marketing participant, including: name, serial number of the people’s identity card/citizen identity card or passport, member code or card number, date and place of issuance.

4. A member card is invalidated when the card holder’s contract on multi-level marketing participation is terminated.

5. A multi-level marketing enterprise shall publicly announce the invalidation of member cards on its website.

Article 34. Trainers 

1. A multi-level marketing enterprise shall designate trainers to provide basic training for its multi-level marketing participants.

2. Conditions on a trainer:

a/ Having been granted a certification of legal knowledge about multi-level marketing under Article 38 of this Decree;

b/ Having a labor or training contract with a multi-level marketing enterprise.

3. The following persons are ineligible to act as trainers:

a/ Those who are serving imprisonment sentences or have previous convictions for producing or trading in counterfeit goods or banned goods, making deceitful advertisement, deceiving customers, appropriating property through swindling, abusing trust to appropriate property, illegally seizing property or violating regulations on multi-level marketing;

b/ Foreigners who have no permit to work in Vietnam granted by a competent agency, unless they are exempted from such a permit in accordance with law;

c/ Persons who have been sanctioned for violating the provisions of Clause 2, 3 or 4, Article 5 of this Decree and the period upon the expiration of which they will be regarded as having never been handled for an administrative violation has not yet expired;

d/ Individuals specified at Point c, Clause 1, Article 7 of this Decree;

dd/ Cadres and civil servants as defined by the law on cadres and civil servants.

4. A multi-level marketing enterprise shall make a list of trainers and retain their enclosed personal files, and announce such list on its website and notify it to the Ministry of Industry and Trade.

5. A multi-level marketing enterprise shall update the list of trainers on its website and notify updates to the Ministry of Industry and Trade within 10 working days after a change in the list is updated.

6. A multi-level marketing enterprise shall take responsibility for all activities of its trainers during the basic training course.

Article 35. Provision of legal knowledge about multi-level marketing

1. Legal knowledge about multi-level marketing to be provided during training includes:

a/ Regulations on multi-level marketing, advertising and protection of consumer interests;

b/ Ethical standards in multi-level marketing.

2. Programs on provision of legal knowledge about multi-level marketing must be recognized by the Ministry of Industry and Trade.

Article 36. Dossiers, order and procedures for recognition of programs on provision of legal knowledge about multi-level marketing

1. A dossier of request for recognition must comprise:

a/ A written request for recognition;

b/ A copy of the decision of a competent agency on the founding of the establishment with the training function or a paper of equivalent legal validity in accordance with law;

c/ The training program on provision on legal knowledge about multi-level marketing;

d/ A list of at least 2 lecturers possessing a university or higher degree.

2. Order and procedures for recognition of a training program on provision of legal knowledge about multi-level marketing:

a/ Within 7 working days after receiving a dossier of request for recognition, the Ministry of Industry and Trade shall examine its validity. In case the dossier is invalid, the Ministry of Industry and Trade shall request in writing the training establishment to supplement the dossier;

b/ Within 30 working days after receiving a valid dossier of request for recognition, the Ministry of Industry and Trade shall appraise the dossier and issue a decision on recognition.

3. A decision on recognition of a training program on provision of legal knowledge about multi-level marketing is valid for 3 years from the date of its signing.

4. The Ministry of Industry and Trade shall prescribe the framework training program on provision of legal knowledge about multi-level marketing.

Article 37. Activities of establishments providing training in legal knowledge about multi-level marketing

1. Organizing training:

a/ An establishment providing training in legal knowledge about multi-level marketing shall carry out training activities according to the recognized contents and program and grant certificates of completion of a training course in legal knowledge about multi-level marketing, made according to Form No. 14 in the Appendix to this Decree;

b/ An establishment providing training in legal knowledge about multi-level marketing shall report to the Ministry of Industry and Trade on results of training activities which it has carried out within 10 days after a training course is finished.

2. Archive of files:

An establishment providing training in legal knowledge about multi-level marketing shall archive files of training courses in accordance with the law on archive. Files to be archived include:

a/ Files of trainees for admission to training courses, lists of trainees of each training course who have been granted certificates of completion of the training course;

b/ Lists of lecturers of training courses;

c/ Files for management of the grant of certificates of completion of a training course.

3. Inspection and supervision of activities of an establishment providing training in legal knowledge about multi-level marketing:

a/ Before January 31 every year, a training establishment shall send a report on the provision of legal knowledge about multi-level marketing in the previous year (including: training results, examination and grant of certificates of completion of a training course in legal knowledge about multi-level marketing) to the Ministry of Industry and Trade;

b/ Every year, the Ministry of Industry and Trade shall inspect the training and grant of certificates of completion of a training course in legal knowledge about multi-level marketing by training establishments.

Based on inspection results, depending on the seriousness of violations, the Ministry of Industry and Trade shall request a training establishment to remedy its violations or temporarily suspend the decision on recognition of a program on provision of legal knowledge about multi-level marketing.

c/ The Ministry of Industry and Trade shall revoke or cancel a decision on recognition of a training program on provision of legal knowledge about multi-level marketing in the following cases: The training establishment is dissolved or fails to remedy its violations during the period of temporary suspension or its violations are irremediable.

Article 38. Certification of legal knowledge about multi-level marketing

1. A person who has completed a training course on legal knowledge about multi-level marketing shall be registered by a multi-level marketing enterprise to sit an examination of legal knowledge about multi-level marketing organized by the Ministry of Industry and Trade.

2. The Ministry of Industry and Trade shall give certification of legal knowledge about multi-level marketing to persons who have passed an examination of legal knowledge about multi-level marketing.

3. The Ministry of Industry and Trade shall prescribe in detail the examination for, giving and revocation of, certification of legal knowledge about multi-level marketing.

Article 39. Order and procedures for giving certification of legal knowledge about multi-level marketing

1. A multi-level marketing enterprise shall submit directly or send by post a dossier for registration for examination and certification of legal knowledge about multi-level marketing to the Ministry of Industry and Trade. Such a dossier must comprise:

a/ A written request for examination and certification of legal knowledge about multi-level marketing;

b/ A list of persons requested to take an examination and receive certification of legal knowledge about multi-level marketing, including the following information: full name, gender, date of birth, serial number and date and place of issue of people’s identity card/citizen identification card of each of the listed person;

c/ Two 3 cm x 4 cm photos of each of the persons on the list mentioned at Point b, Clause 1 of this Article;

d/ One copy of the certificate of completion of a training course in legal knowledge about multi-level marketing.

2. Within 15 working days after an examination of legal knowledge about multi-level marketing is organized, the Ministry of Industry and Trade shall give certification of legal knowledge about multi-level marketing to persons who pass the examination.

Chapter V. MULTI-LEVEL MARKETING ACTIVITIES

Article 40. Responsibilities of a multi-level marketing enterprise

1. To post up at its head office, branches, representative offices and business places the documents specified in Clauses 4 and 5, Article 9 of this Decree.

2. To strictly implement the registered rules of operation and compensation plan.

3. To fix and announce selling prices of goods traded by the mode of multi-level marketing and sell goods at announced prices.

4. To issue invoices for each transaction of selling goods to each of its multi-level marketing participants or customers that directly buys goods from it.

5. To supervise activities of multi-level marketing participants to ensure their strict performance of contracts on multi-level marketing participation and strict compliance with its rules of operation and compensation plan.

6. To take responsibility for multi-level marketing participants’ multi-level marketing activities which are carried out at its head office, branches, representative offices or business places or at its conferences, seminars or training courses.

7. To withhold personal income tax of multi-level marketing participants for remittance into the state budget before paying commissions, bonuses or other economic benefits to them, unless otherwise provided by law.

8. To operate the information technology system for management of multi-level marketing participants under Article 44 of this Decree and according to the technical explanations made upon registration of multi-level marketing activities, ensuring multi-level marketing participants are able to access and retrieve basic information about their multi-level marketing activities.

9. To operate and regularly update its website in Vietnamese to provide information about it and its multi-level marketing activities under Article 45 of this Decree.

10. To operate an information and communication system, including telephone, email and its office address, to receive and answer inquiries and settle complaints of multi-level marketing participants.

11. To provide the right to access to the account for management of the information technology system for management of its multi-level marketing activities when so requested in writing by a competent state management agency in charge of management of multi-level marketing activities.

12. To comply with relevant regulations on conditions for trading and circulation of goods traded by the mode of multi-level marketing.

Article 41. Responsibilities of a multi-level marketing participant

1. To carry out activities of marketing and selling goods and developing the multi-level marketing network only after being granted a member card.

2. To produce his/her member card before introducing or marketing goods for sale.

3. To comply with the contract on multi-level marketing participation and rules of operation of the enterprise.

4. To provide sufficient and truthful information about the multi-level marketing enterprise and its goods traded by the mode of multi-level marketing, compensation plan and rules of operation.

Article 42. Rules of operation

Rules of operation must clearly specify the process and procedures for entering contracts on multi-level marketing participation, basic training for multi-level marketing participants, grant of member cards, placement of orders for goods, payment, delivery and receipt of goods, return of goods (if any), warranty (if any), exchange, return, repurchase of goods and refund of money to multi-level marketing participants, settlement of complaints of multi-level marketing participants, termination and liquidation of contracts.

Article 43. Compensation plans

A compensation plan must clearly state conditions agreed upon, commissions, bonuses and other economic benefits payable to multi-level marketing participants of each rank or title.

Article 44. Information technology system for management of the network of multi-level marketing participants

1. An information technology system for management of a network of multi-level marketing participants of a multi-level marketing enterprise must be operated on a server located in Vietnam.

2. An information technology system for management of a network of multi-level marketing participants must provide these participants with the following basic information:

a/ Basic information about multi-level marketing participants as specified at Point b, Clause 2, Article 29 of this Decree;

b/ Information about the number of contracts on multi-level marketing participation, code numbers, positions, ranks and titles of multi-level marketing participants, uplines and downlines of multi-level marketing participants;

c/ Information about the buying history of multi-level marketing participants and customers introduced by such participants;

d/ Information about the history of receiving commissions, bonuses and other economic benefits of multi-level marketing participants.

3. Any malfunction of the information technology system shall be promptly reported to the agency that has granted the multi-level marketing registration certificate.

Article 45. Websites of multi-level marketing enterprises

1. A website of a multi-level marketing enterprise must have the following basic contents:

a/ Documents on multi-level marketing activities of the enterprise, including the multi-level marketing registration certificate, model contract on multi-level marketing participation, rules of operation, compensation plan, basic training program and other necessary documents;

b/ Information about goods traded by the mode of multi-level marketing, including names, selling prices, ingredients, effects, usage, origins, certificates and certifications of product standards (if any);

c/ Information about the registration, head office, branches, representative offices and business places of the enterprise;

d/ Process and procedures for entering into contracts on multi-level marketing participation, basic training for multi-level marketing participants, grant of member cards, placement of orders for goods, payment, delivery and receipt of goods, return of goods (if any), warranty (if any), exchange, return, repurchase of goods and refund of money to multi-level marketing participants, settlement of complaints of multi-level marketing participants, termination and liquidation of contracts;

dd/ Process and place of warranty for, exchange or return of goods and post-sale services (if any);

e/ Contact information for receipt and answering of inquiries and settlement of complaints of multi-level marketing participants, including telephone number, email address and address of the receiving office;

g/ Information about multi-level marketing activities of the enterprise, including: address of the current place of operation; the highest income, average income and lowest income of multi-level marketing participants in the preceding fiscal year;

h/ The handling of violations, termination of contracts and invalidation of member cards of multi-level marketing participants;

i/ Sales promotion programs of the enterprise.

2. The information specified in Clause 1 of this Article must appear on the homepage of or be directly linked to from the website of the enterprise.

3. A multi-level marketing enterprise shall comply with other relevant regulations when operating its website.

Article 46. Delivery, receipt and consignment of goods

1. Within 30 days after a multi-level marketing participant pays a money amount for goods purchase, a multi-level marketing enterprise shall fully deliver goods purchased with such money amount while the multi-level marketing participant shall receive all goods delivered from the enterprise.

2. In case a multi-level marketing enterprise fails to deliver goods or a multi-level marketing participant refuses to receive delivered goods within the time limit prescribed in Clause 1 of this Article, the enterprise shall cancel the transaction and return the whole paid money amount to the participant.

3. In case a multi-level marketing participant consigns goods at a multi-level marketing enterprise and refuses to receive such goods within the time limit prescribed in Clause 1 of this Article, the enterprise shall cancel the transaction and return the whole paid money amount to the participant.

Article 47. Return and repurchase of goods

1. A multi-level marketing participant may return goods he/she has purchased from a multi-level marketing enterprise, including also goods purchased under a sales promotion program, within 30 days from the date of receipt.

2. To be returned, a goods item must satisfy the following conditions:

a/ Its package, stamp and label remain intact;

b/ It is accompanied by the purchase invoice.

3. Within 30 days after a multi-level marketing participant makes a valid request for return of goods, a multi-level marketing enterprise shall repurchase such goods, provided the conditions prescribed in Clause 2 of this Article are satisfied, and refund the paid money amount at a level agreed upon with the participant which must not be lower than 90% of the money amount paid by the participant to receive such goods.

4. When refunding the paid money amount to a multi-level marketing participant, a multi-level marketing enterprise may deduct commissions, bonuses and other economic benefits already received by such participant for the purchase of the goods under
this Article.

5. A multi-level marketing enterprise may re-collect from other multi-level marketing participants commissions, bonuses and other economic benefits they have received in relation to the returned goods under this Article.

6. In case a contract on multi-level marketing participation is terminated, a multi-level marketing enterprise shall re-purchase goods sold to the multi-level marketing participant under Clauses 1 thru 5 of this Article.

Article 48. Commissions, bonuses and other economic benefits

1. A multi-level marketing enterprise shall pay commissions, bonuses and other economic benefits to multi-level marketing participants under a compensation plan registered with a competent agency.

2. The total value of monetized commissions, bonuses and other economic benefits, including benefits earned under sales promotion programs payable by a multi-level marketing enterprise to its multi-level marketing participants in a year must not exceed 40% of multi-level marketing sales in that year of such enterprise.

3. Multi-level marketing sales mentioned in Clause 2 of this Article means sales of multi-level marketing activities of an enterprise, exclusive of value-added tax.

4. The total value of commissions, bonuses and other economic benefits mentioned in Clause 2 of this Article excludes the difference between retail sale prices announced by an enterprise and prices at which the enterprise has sold goods to multi-level marketing participants.

5. A multi-level marketing enterprise shall pay via bank monetized commissions, bonuses and other economic benefits to its multi-level marketing participants.

Article 49. Reports of multi-level marketing enterprises

1. Biannually, a multi-level marketing enterprise shall report on its multi-level marketing activities to the Ministry of Industry and Trade and provincial-level Industry and Trade Department of the locality where it carries out such activities.

2. Biannual reports shall be submitted before July 31 every year:

a/ A biannual report to be submitted to the Ministry of Industry and Trade must have the contents specified in Form No. 15 in the Appendix to this Decree and be enclosed with the financial statement of the preceding year bearing the certification by a competent agency in accordance with law.

b/ A biannual report to be submitted to the provincial-level Industry and Trade Department must have the contents specified in Form No. 16 in the Appendix to this Decree.

3. Annual reports to be submitted before January 20 every year to the Ministry of Industry and Trade shall be made according to Form No. 15 while those to be submitted to provincial-level Industry and Trade Departments shall be made according to Form No. 16 in the Appendix to this Decree.

4. Before the 10th day every month, a multi-level marketing enterprise shall update and send directly, by post or via email to the provincial-level Industry and Trade Department of the locality where it has registered multi-level marketing activities a list of multi-level marketing participants residing in the locality in the preceding month (clearly stating their full names, dates of birth, addresses of their places of permanent or temporary residence, serial numbers of their people’s identity cards, citizen identification cards or passports, numbers of contracts on multi-level marketing participation, codes and contact telephone numbers).

5. A multi-level marketing enterprise shall report at the request of a competent agency in charge of multi-level marketing activities.

Chapter VI. ESCROW

Article 50. Escrow amount

1. Escrow means a money amount which secures the fulfillment by a multi-level marketing enterprise of its obligations toward multi-level marketing participants and the State in the cases specified in Clause 1, Article 53 of this Decree.

2. A multi-level marketing enterprise shall open an escrow account to deposit a money amount equal to 5% of its charter capital, which, however, must not be lower than VND 10 (ten) billion, at a commercial bank or foreign bank branch in Vietnam.

3. The bank where a multi-level marketing enterprise opens its escrow account shall give a written certification of the escrow according to Form No. 17 in the Appendix to this Decree and coordinate with the Ministry of Industry and Trade in certifying the contents related to such written certification when so requested by the latter.

4. When there is a change in information in a written certification of escrow, a multi-level marketing enterprise shall carry out the procedures for modification of such certification with the bank.

5. An escrow account shall be blocked by the bank throughout the operation of an enterprise and money may be withdrawn therefrom or used only when there is written approval of the Ministry of Industry and Trade, except the case specified at Point a, Clause 1, Article 51 of this Decree.

6. The bank where an enterprise opens its escrow account shall manage the escrow in accordance with law.

7. A multi-level marketing enterprise may enjoy interest on its escrow as agreed with the bank and withdraw such interest.

Article 51. Escrow withdrawal

1. A multi-level marketing enterprise may withdraw its escrow in the following cases:

a/ The Ministry of Industry and Trade refuses to grant a multi-level marketing registration certificate to it;

b/ It has terminated multi-level marketing activities under Clause 1, Article 17 of this Decree and fulfilled its responsibilities prescribed in Clause 2, Article 17 of this Decree;

c/ It has opened an escrow account under Article 50 of this Decree at another bank or foreign bank branch.

2. When withdrawing its escrow under Point a, Clause 1 of this Article, an enterprise shall provide the bank with the Ministry of Industry and Trade’s original notice of the dossier return under Clause 3, Article 10 of this Decree.

3. When withdrawing its escrow under Point b or c, Clause 1 of this Article, an enterprise shall provide the bank with the original written consent of the Ministry of Industry and Trade under Clause 3 or 4, Article 52 of this Decree.

4. The bank where an enterprise opens its escrow account shall give a written certification of the escrow to the Ministry of Industry and Trade before permitting the enterprise to withdraw the escrow.

Article 52. Dossiers, order and procedures for escrow withdrawal

1. Past the time limit of 90 days from the date the Ministry of Industry and Trade issues a written receipt of a dossier notifying the termination of multi-level marketing activities or a decision on revocation of a multi-level marketing registration certificate, a multi-level marketing enterprise that has fulfilled the responsibilities prescribed in Clause 2, Article 17 of this Decree may submit directly or send by post to the Ministry of Industry and Trade a dossier of request for escrow withdrawal.

2. A dossier of request for escrow withdrawal must comprise:

a/ A written request for escrow withdrawal, made according to Form No. 18 in the Appendix to this Decree;

b/ A list of multi-level marketing participants by the time of termination of multi-level marketing activities (their names, serial numbers of their people’s identity cards or citizen identification card or passports, addresses, telephones numbers, numbers of contracts on multi-level marketing participation, dates of contract entry, serial numbers of member cards).

3. Receipt of a dossier of request for escrow withdrawal:

a/ Within 5 working days after receiving a dossier of request for escrow withdrawal, the Ministry of Industry and Trade shall examine the completeness and validity of the dossier.

In case the dossier is incomplete and invalid, the Ministry of Industry and Trade shall notify such in writing to the enterprise for modification and/or supplementation of the dossier. The time limit for dossier modification and/or supplementation is 10 working days after the Ministry of Industry and Trade makes the notification.

In case the dossier is complete and valid, the Ministry of Industry and Trade shall publicly announce on its website the termination of multi-level marketing activities and the enterprise’s request for escrow withdrawal;

b/ Within 30 days after the Ministry of Industry and Trade publicizes the above information, a multi-level marketing participant and the agency competent to handle violations in multi-level marketing activities shall notify the Ministry of Industry and Trade that the multi-level marketing enterprise has not yet fulfilled the responsibilities prescribed in Clause 2, Article 17 of this Decree.

In case the multi-level marketing participant and the agency competent to handle violations in multi-level marketing activities send no notice to the Ministry of Industry and Trade within the above time limit, the Ministry of Industry and Trade shall give a written permission for the enterprise to withdraw its escrow.

4. The procedures for withdrawing escrow in the case specified at Point c, Clause 1, Article 51 of this Decree:

a/ A multi-level marketing enterprise shall send directly or by post a written request for change of its escrow, enclosed with the original written certification of escrow at a bank or another bank branch, to the Ministry of Industry and Trade;

b/ Within 10 working days after receiving a dossier of request for change of escrow specified at Point a of this Clause, the Ministry of Industry and Trade shall send a written request to the bank or bank branch where the enterprise opens its new escrow account to certify the validity of the written certification of escrow;

c/ Within 10 working days after receiving a written certification by the bank or bank branch where the enterprise opens its new escrow account, the Ministry of Industry and Trade shall give a written permission for the enterprise to withdraw money from the old escrow account.

Article 53. Handling of escrow

1. Escrow may be used in the following cases:

a/ A multi-level marketing enterprise terminates its multi-level marketing activities under Clause 1, Article 17 of this Decree but fails to fulfill all obligations related to multi-level marketing activities toward multi-level marketing participants, and there is a legally effective judgment or ruling of a competent agency on the settlement of disputes between the enterprise and participants over such obligations;

b/ A multi-level marketing enterprise terminates its multi-level marketing activities without abiding by a legally effective decision of a competent agency on sanctioning of a violation in multi-level marketing activities.

2. Order and procedures for use of escrow in the case specified at Point a, Clause 1 of this Article:

a/ A multi-level marketing participant shall submit directly or send by post a written request for use of escrow and an authenticated copy of the judgment or ruling mentioned at Point a, Clause 1 of this Article to the Ministry of Industry and Trade;

b/ Within 10 working days after receiving the documents specified at Point a of this Clause, the Ministry of Industry and Trade shall examine their validity.

In case such documents are invalid, the Ministry of Industry and Trade shall notify such in writing, requesting the requester to modify and/or supplement them. The time limit for modification and/or supplementation is 15 working days after the Ministry of Industry and Trade makes the notification;

c/ In case the documents specified at Point a of this Clause are valid, the Ministry of Industry and Trade shall request in writing the bank where the enterprise opens its escrow account to deduct the escrow as requested by the multi-level marketing participant.

3. Order and procedures for use of escrow in the case specified at Point b, Clause 1 of this Article:

In case an enterprise terminates its multi-level marketing activities but fails to abide by the effective decision of the competent agency on sanctioning of a violation in multi-level marketing activities, the agency issuing such sanctioning decision shall request in writing the Ministry of Industry and Trade to issue a document to request the bank where the enterprise opens its escrow account to deduct the escrow to execute the sanctioning decision.

4. The Ministry of Industry and Trade shall permit the use of escrow as soon as it receives a valid dossier of request therefor.

Chapter VII. RESPONSIBILITY FOR STATE MANAGEMENT OF MULTI-LEVEL MARKETING ACTIVITIES

Article 54. Responsibilities of the Ministry of Industry and Trade

1. The Ministry of Industry and Trade shall take responsibility before the Government for performing the state management of multi-level marketing activities nationwide:

a/ To grant, modify, supplement, extend, re-grant or revoke multi-level marketing registration certificates, and certify the receipt of enterprises’ dossiers for notification of termination of multi-level marketing activities;

b/ To collect, manage and use appraisal charges for the grant of multi-level marketing registration certificates in accordance with law;

c/ To notify the grant, modification, extension or revocation of multi-level marketing registration certificates, and certify the receipt of dossiers for notification of termination of multi-level marketing activities to provincial-level Industry and Trade Departments of localities where enterprises organize their multi-level marketing activities;

d/ To inspect, examine and supervise multi-level marketing activities and handle violations according to its competence;

dd/ To guide and coordinate with provincial-level Industry and Trade Departments in the inspection, examination and handling of violations of the regulations on management of multi-level marketing activities;

e/ To notify and transfer to competent agencies for handling violations of the regulations on management of multi-level marketing activities;

g/ To organize professional training and refresher courses for cadres and civil servants directly performing the state management of multi-level marketing; to disseminate and popularize the law on management of multi-level marketing activities among multi-level marketing enterprises and participants;

h/ To draft and submit to competent authorities for promulgation legal documents on management of multi-level marketing activities or revise existing ones;

i/ To perform other responsibilities as prescribed in this Decree.

2. The Competition and Consumer Protection Department of the Ministry of Industry and Trade shall assist the Minister of Industry and Trade in assuming the prime responsibility for performing the state management activities specified in Clause 1 of this Article.

3. The Market Management Directorate of the Ministry of Industry and Trade shall assist the Minister of Industry and Trade in performing the state management activities specified at Points d, e and g, Clause 1 of this Article.

Article 55. Responsibilities of ministries and ministerial-level agencies

1. Ministries and ministerial-level agencies shall, within the ambit of their tasks and powers, coordinate with the Ministry of Industry and Trade in performing the state management of multi-level marketing activities.

2. The Ministry of Public Security:

a/ To coordinate with the Ministry of Industry and Trade, provincial-level People’s Committees and other ministries and ministerial-level agencies in improving the effectiveness of the state management of multi-level marketing activities;

b/ To prevent and combat crimes and violations in multi-level marketing activities;

c/ To receive and process reports and denunciations against crimes related to multi-level marketing activities; to initiate criminal cases, investigate crimes and perform other judicial tasks as prescribed by law.

3. The Ministry of Health:

a/ To inspect, examine and handle violations of enterprises related to the conditions for trading in goods by the mode of multi-level marketing in the fields under its management in accordance with law;

b/ To inspect, examine and handle violations of multi-level marketing enterprises in the production, preliminary processing, processing, preservation, transportation, export, import or trading of foods, cosmetics and other products falling under its competence;

c/ To inspect, examine and handle according to its competence activities of advertising, holding conferences and seminars, communicating and providing information about cosmetics, functional foods and other goods items of multi-level marketing enterprises under its management in accordance with law.

4. The Ministry of Finance:

a/ To inspect and examine multi-level marketing activities in accordance with the tax laws;

b/ To promptly, accurately and objectively publicize information about results of tax inspection and examination of multi-level marketing activities.

5. The Ministry of Science and Technology shall inspect, examine and handle violations of multi-level marketing enterprises in the fields of standardization, measurement and quality of products and goods and intellectual property falling under its competence.

6. The Ministry of Agriculture and Rural Development:

a/ To inspect, examine and handle violations of multi-level marketing enterprises in the production and trading of and advertisement for products falling under its competence;

b/ To inspect, examine and handle violations of multi-level marketing enterprises related to the conditions for trading in goods in the fields under its management in accordance with law.

7. The Ministry of Information and Communications:

a/ To develop and implement programs on dissemination and popularization in the mass media of the law on multi-level marketing activities among management and press agencies and enterprises;

b/ To coordinate with press agencies in:

– Formulating regular programs and thematic broadcasts to disseminate and popularize the law on multi-level marketing activities and warn people about disguised and illegal acts in multi-level marketing;

– Reporting and providing prompt, accurate and objective information about practical operations of multi-level marketing enterprises.

8. The State Bank of Vietnam shall guide credit institutions in complying with the regulations on certification and management of escrows of multi-level marketing enterprises under this Decree.

Article 56. Responsibilities of provincial-level People’s Committees

1. Provincial-level People’s Committees shall, within the ambit of their tasks and powers, perform the state management of multi-level marketing activities in their localities:

a/ To issue regulations on coordination among related local agencies in inspecting, examining and supervising multi-level marketing activities in their localities;

b/ To grant or revoke certifications of registration of multi-level marketing activities in their localities, certify the receipt of notices of termination of multi-level marketing activities in their localities;

c/ To inspect, examine and supervise multi-level marketing activities;

d/ To handle according to their competence or report to competent authorities for handling violations of the regulations on management of multi-level marketing activities;

dd/ To notify or transfer to competent agencies for handling violations of the regulations on management of multi-level marketing activities;

e/ To organize professional training and refresher courses for cadres and civil servants directly performing the state management of multi-level marketing; to disseminate and popularize the law on management of multi-level marketing activities among multi-level marketing enterprises and participants;

g/ To report on an annual or irregular basis to the Ministry of Industry and Trade on the management of multi-level marketing activities in their localities;

h/ To perform other responsibilities as prescribed in this Decree.

2. Provincial-level Industry and Trade Departments shall assist provincial-level People’s Committees in performing the management activities specified in Clause 1 of this Article.

3. Local market management forces shall assist provincial-level People’s Committees and the Market Management Directorate in performing the management activities specified at Points c, d, dd and e, Clause 1 of this Article.

Article 57. Handling of violations of multi-level marketing enterprises and participants

1. Multi-level marketing enterprises and participants that commit violations prescribed in this Decree shall, depending on the nature and seriousness of their violations, be handled in accordance with the law on competition and law on handling of administrative violations or examined for penal liability in accordance with law.

2. Multi-level marketing enterprises and participants that violate the provisions of this Decree, causing damage to other organizations and individuals, shall pay compensation in accordance with law.

3. Results of handling of violations in multi-level marketing activities shall be publicized.

Article 58. Competence and procedures for handling violations

The order, procedures and competence for handling violations specified in this Decree must comply with the regulations on handling of violations.

Chapter VIII. IMPLEMENTATION PROVISIONS

Article 59. Effect

1. This Decree takes effect on May 2, 2018.

2. This Decree replaces the Government’s Decree No. 42/2014/ND-CP of May 14, 2014, on management of multi-level marketing activities.

Article 60. Transitional provisions

1. Within 9 months from the effective date of this Decree, multi-level marketing enterprises operating under Decree No. 42/2014/ND-CP shall satisfy the conditions on multi-level marketing activities prescribed in this Decree.

2. Within 12 months from the effective date of this Decree, multi-level marketing enterprises which have been granted certification of receipt of notices of multi-level marketing activities in localities under Decree No. 42/2014/ND-CP shall supplement their dossiers and register their multi-level marketing activities in localities under this Decree.

3. Trainer certificates granted under Decree No. 42/2014/ND-CP may be used in substitution for certification of legal knowledge about multi-level marketing for 9 months from the effective date of this Decree.

4. Conditions, dossiers, order and procedures for withdrawal and use of escrow of multi-level marketing enterprises having multi-level marketing registration certificates granted under Decree No. 42/2014/ND-CP must comply with this Decree.

5. The withdrawal and use of escrow of multi-level marketing enterprises having multi-level marketing organization registrations granted under the Government’s Decree No. 110/2005/ND-CP of August 24, 2005, on management of multi-level marketing activities, shall be carried out at provincial-level Industry and Trade Departments with relevant dossiers and according to the order and procedures prescribed in Clauses 2 and 3, Article 52, and Article 53, of this Decree.

Article 61. Implementation responsibility

1. The Minister of Industry and Trade shall organize the implementation of this Decree.

2. Ministers, heads of ministerial-level agencies, heads of government-attached agencies and chairpersons of provincial-level People’s Committees shall implement this Decree.

2. Decree 18/2023/ND-CP (Amending Decree 40/2018/ND-CP)

DECREE 18/2023/ND-CP

April 28, 2023

Amending and supplementing a number of articles of the Government’s Decree No. 40/2018/ND-CP of March 12, 2018, on the management of multi-level marketing activities[1]

Pursuant to the June 19, 2015 Law on Organization of the Government; and the November 22, 2019 Law Amending and Supplementing a Number of Articles of the Law on Organization of the Government and the Law on Organization of Local Administration;

Pursuant to the June 17, 2020 Law on Investment;

At the proposal of the Minister of Industry and Trade;

The Government promulgates the Decree amending and supplementing a number of articles of the Government’s Decree No. 40/2018/ND-CP of March 12, 2018, on the management of multi-level marketing activities.

Article 1. To amend and supplement a number of articles of the Government’s Decree No. 40/2018/ND-CP of March 12, 2018, on the management of multi-level marketing activities

1. To amend and supplement Clause 2, Article 3 as follows:

“2. Multi-level marketing enterprise means an enterprise that has a multi-level marketing registration certificate granted by a competent agency to organize multi-level marketing activities in accordance with this Decree.”

2. To add Clause 8 to Article 3 as follows:

“8. Conference, seminar or training course on multi-level marketing means an activity covering the contents of introducing, honoring, providing information, guidance and training, and sharing information related to multi-level marketing activities.”

3. To amend and supplement Point c, Clause 1, Article 7 as follows:

“c/ Partners, for a partnership; the owner, for a sole proprietorship or single-member limited liability company; members, for a limited liability company with two or more members; shareholders, for a joint-stock company, or the at-law representative of an enterprise must not be an organization(s) or individual(s) that used to hold one of the above positions in the multi-level marketing enterprise having its multi-level marketing registration certificate revoked under the Government’s Decree No. 42/2014/ND-CP of May 14, 2014, on the management of multi-level marketing activities, and this Decree during the period in which such enterprise conducts multi-level marketing activities;”

4. To add Point h to Clause 1, Article 7 as follows:

“h/ In case an organization registering multi-level marketing activities is an enterprise having a foreign investor(s) or foreign-invested economic organization(s) being its owner(s) or member(s) or shareholder(s), such foreign investor(s) or foreign-invested economic organization(s) must have at least 3 consecutive years’ experience in multi-level marketing activities in any country or territory
in the world.”

5. To amend and supplement Clause 3, Article 9 as follows:

“3. One list of the persons specified at Point c, Clause 1, Article 7 of this Decree, enclosed with copies of their valid personal identification papers (people’s identity card or citizen identity card or passport, for individuals holding Vietnamese citizenship; passport and lawful residence paper granted by a competent Vietnamese agency, for foreigners permanently residing in Vietnam; or passport, for foreigners not permanently residing in Vietnam).

One copy of the legal paper on the establishment of the organization, in the case the applicant is an organization.”

6. To amend and supplement Clause 7, Article 9 as follows:

“7. Documents providing technical evaluations stating that the information technology system for management of the network of multi-level marketing participants satisfies the condition specified in Article 44 of this Decree, which must have the following principal contents:

a/ IP address of the server and location of the physical server;

b/ Operating mechanism for the system, including information describing the system, and methods to input, store and manage data;

c/ The information specified in Article 44 of this Decree.”

7. To add Clause 10 to Article 9 as follows:

“10. Copies of the audited financial statements or documents certifying the fulfillment of tax or financial obligations in the last three fiscal years or documents of equivalent validity issued or certified by competent agencies or organizations, proving the enterprise’s satisfaction of the condition specified at Point h, Clause 1, Article 7 of this Decree, in case the enterprise has a foreign investor(s) or foreign-invested economic organization(s) being its owner(s) or member(s) or shareholder(s).”

8. To add Clause 11 to Article 9 as follows:

“11. A business license with the content of licensing the exercise of the right to retail distribution, including retail activities by multi-level marketing mode, in case the enterprise has a foreign investor(s) or foreign-invested economic organization(s) being its owner(s) or member(s) or shareholder(s).”

9. To amend and supplement Point a, Clause 1, Article 10 as follows:

“a/ An enterprise registering its multi-level marketing activities shall submit 1 dossier specified in Article 9 of this Decree (enclosed with an electronic file in “.doc” or “.docx” format, for the documents specified in Clause 4, Article 9 of this Decree, or in “.xls” or “.xlsx” format, for the documents specified in Clause 5, Article 9 of this Decree) to the Ministry of Industry and Trade (by hand-delivery, online or by postal service);”

10. To amend and supplement Point b, Clause 3, Article 12 as follows:

“b/ In case of requesting provision of information or modification/supplementation of the enterprise’s notice mentioned at Point a of this Clause, the Ministry of Industry and Trade shall notify such request to the enterprise within 15 working days after receiving the enterprise’s dossier. The time limit for modification/supplementation is 10 working days. In case the enterprise fails to provide information or modify/supplement the dossier within the above time limit, or the enterprise’s dossier fails to comply with regulations, the Ministry of Industry and Trade shall notify such in writing and return the dossier to the enterprise, clearly stating the reason.

An enterprise may apply the list of goods traded by the multi-level marketing mode if the Ministry of Industry and Trade makes no request regarding the notice mentioned at Point a of this Clause within 15 working days after receiving the enterprise’s dossier;”

11. To amend and supplement Point c, Clause 4, Article 14 as follows:

“c/ The documents specified in Clauses 4 thru 11, Article 9 of this Decree, in case of a change compared to the latest modified/supplemented multi-level marketing registration certificate.”

12. To amend and supplement Point c, Clause 1, Article 16 as follows:

“c/ The enterprise is sanctioned in accordance with law for one of the violations specified in Clause 1, Article 5, Clause 14, Article 40, and Clause 3, Article 47, of this Decree in the course of organizing its multi-level marketing activities;”

13. To amend and supplement Article 18 as follows:

“Article 18. Order and procedures for termination of multi-level marketing activities

1. In case an enterprise terminates its multi-level marketing activities at its own will:

a/ A dossier for notification of termination of multi-level marketing activities must comprise:

A notice of termination of multi-level marketing activities, made according to Form No. 06 provided in the Appendix to this Decree;

A report, made according to Form No. 06a provided in the Appendix to this Decree;

One copy of the latest modified enterprise registration certificate or a paper of equivalent legal validity;

One original of the multi-level marketing registration certificate;

One copy of the decision on termination of multi-level marketing activities issued by the owner of the sole proprietorship or owner of the single-member limited liability company; the decision and minutes of the meeting on termination of multi-level marketing activities issued by the members’ council, for a limited liability company with two or more members, or by the general meeting of shareholders, for a joint-stock company, or by partners, for a partnership.

b/ Order and procedures for termination of multi-level marketing activities:

An enterprise shall submit by hand-delivery, online by postal service a dossier for notification of termination of multi-level marketing activities to the Ministry of Industry and Trade;

In case the dossier fails to comply with Point a of this Clause, the Ministry of Industry and Trade shall issue a notice requesting modification/supplementation of the dossier within 10 working days after receiving the dossier.  The time limit for the modification/supplementation of the dossier is 15 working days after the enterprise receives the notice.

In case the enterprise fails to modify/supplement the dossier within the above time limit, or the enterprise’s dossier fails to comply with regulations, the Ministry of Industry and Trade shall notify such in writing and return the dossier to the enterprise, clearly stating the reason.

Within 10 working days after receiving the enterprise’s valid dossier for notification of termination of multi-level marketing activities, the Ministry of Industry and Trade shall issue a receipt of the dossier, and issue a notice thereof to the provincial-level Departments of Industry and Trade nationwide by one of the modes specified in Clause 5, Article 10 of this Decree, and post the notice on its website.

2. In case an enterprise terminates its multi-level marketing activities because its multi-level marketing registration certificate has expired or is revoked:

a/ A dossier for notification of termination of multi-level marketing activities must comprise:

A notice of termination of multi-level marketing activities, made according to Form No. 06 provided in the Appendix to this Decree;

A report, made according to Form No. 06a provided in the Appendix to this Decree;

One copy of the latest modified enterprise registration certificate or a paper of equivalent legal validity;

One original of the multi-level marketing registration certificate.

b/ Order and procedures for termination of multi-level marketing activities:

Within 30 working days after its multi-level marketing registration certificate expires or is revoked, an enterprise shall submit by hand-delivery, online or by postal service a dossier for notification of termination of multilevel marketing activities to the Ministry of Industry and Trade;

In case the dossier fails to comply with Point a of this Clause, the Ministry of Industry and Trade shall issue a notice requesting modification/supplementation of the dossier within 10 working days after receiving the dossier.  The time limit for the modification/supplementation of the dossier is 15 working days after the enterprise receives the notice.

In case the enterprise fails to modify/supplement the dossier within the above time limit, or the enterprise’s dossier fails to comply with regulations, the Ministry of Industry and Trade shall notify such in writing and return the dossier to the enterprise, clearly stating the reason.

Within 10 working days after receiving the enterprise’s valid dossier for notification of termination of multi-level marketing activities, the Ministry of Industry and Trade shall issue a receipt of the dossier, and issue a notice thereof to the provincial-level Departments of Industry and Trade nationwide by one of the modes specified in Clause 5, Article 10 of this Decree, and post the notice on its website.”

14. To amend and supplement Clause 2, Article 20 as follows:

“2. If having no head office, branch, representative office or business location in a locality, a multi-level marketing enterprise shall assign a person residing in such locality to act as the focal point to work with state management agencies in the locality. The person acting as the focal point of a multi-level marketing enterprise in a locality must satisfy the following conditions:

a/ Not falling into the case specified at Point a, Clause 2, Article 28 of this Decree;

b/ Having been granted a certification of knowledge in accordance with Article 38 of this Decree;

c/ Being assigned by the enterprise to work with, and provide information and documents related to multi-level marketing activities of the enterprise in, the locality at the request of a state management agency in charge of multi-level marketing.”

15. To amend and supplement Clause 1, Article 21 as follows:

 “1. A dossier for registration of multi-level marketing activities in a locality must comprise:

a/ A request for registration of multi-level marketing activities in a locality, made according to Form No. 07 provided in the Appendix to this Decree;

b/ One copy of the enterprise registration certificate or a paper of equivalent legal validity;

c/ One copy of the multi-level marketing registration certificate;

d/ One copy of the branch or representative office operation registration certificate or of the business location registration certificate (if any).

If having no head office, branch, representative office or business location in a locality, a multi-level marketing enterprise shall provide documents related to the person acting as its focal point in such locality, including: one certified copy of the people’s identity card or citizen identity card or passport; one original or one certified copy of the criminal record certificate; and one certified copy of the certification of knowledge for the person acting as the focal point in the locality; and one copy of the assignment document specifying the scope of jobs and rights and obligations of related parties.”

16. To amend and supplement Clause 3, Article 21 as follows:

 “3. In case a dossier is not complete or valid as required in Clause 1 of this Article, the provincial-level Department of Industry and Trade shall, within 5 working days after receiving the dossier, notify such to the enterprise for modification/supplementation of the dossier. The time limit for dossier modification/supplementation is 15 working days after the provincial-level Department of Industry and Trade issues a notice. The provincial-level Department of Industry and Trade shall return the dossier in case the enterprise fails to modify/supplement the dossier within the above time limit.

In case a dossier is complete and valid, the provincial-level Department of Industry and Trade shall, within 10 working days after receiving the dossier, send to the enterprise a certification of registration of multi-level marketing activities in the locality, made according to Form No. 08 provided in the Appendix to this Decree. In case of refusal to grant certification, the provincial-level Department of Industry and Trade shall reply in writing, clearly stating the reason.”

17. To add Point dd to Clause 1, Article 23 as follows:

“dd/ The enterprise fails to fully satisfy the conditions for carrying out multi-level marketing activities in the locality as specified in Clause 2, Article 20 of this Decree.”

18. To amend and supplement Point a, Clause 2, Article 24 as follows:

“a/ Publicly display a notice of termination at its head office, branches, representative offices and business locations in the locality (if any), and post the notice on its website within 5 working days from the date of termination of multi-level marketing activities in the locality; and send the notice to the provincial-level Department of Industry and Trade;”

19. To add Clause 3 to Article 24 as follows:

“3. Enterprises are not required to carry out procedures for termination of multi-level marketing activities in localities in case of termination of their multi-level marketing activities nationwide.”

20. To amend and supplement Clause 2, Article 26 as follows:

“2. In case a conference, seminar or training course on multi-level marketing is expected to be attended by 30 or more persons or by 10 or more multi-level marketing participants and is not an internal meeting or event of a multi-level marketing enterprise, the enterprise shall notify such conference, seminar or training course to the provincial-level Department of Industry and Trade before organizing it.

For a conference, seminar or training course on multi-level marketing to be organized online in a province or centrally run city with the participation of multi-level marketing participants, the multi-level marketing enterprise shall notify such conference, seminar or training course to the Department of Industry and Trade of such province or centrally run city.

For a conference, seminar or training course on multi-level marketing to be organized online in more than one province or centrally run city with the participation of multi-level marketing participants, the multi-level marketing enterprise shall notify such conference, seminar or training course to the provincial-level Department of  Industry and Trade of the locality where its head office is based.”

21. To amend and supplement Article 27 as follows:

“Article 27. Dossiers, order and procedures for notification of organization of conferences, seminars and training courses on multi-level marketing

1. A dossier for notification of organization of a conference, seminar or training course on multi-level marketing must comprise:

a/ A notice of organization of a conference, seminar or training course on multi-level marketing, made according to Form No. 12 provided in the Appendix to this Decree;

b/ Detailed contents and documents to be presented at the conference, seminar or training course and projected number of participants;

c/ A list of rapporteurs at the conference, seminar or training course, enclosed with contracts signed by the enterprise with these rapporteurs, clearly stating the rights and responsibilities of rapporteurs and contents to be presented;

d/ One original of the power of attorney, in case the enterprise authorizes an individual to conduct the training or organize the conference or seminar;

dd/ Information on the account or link for the participants to access the conference, seminar or training course, in case the conference, seminar or training course is organized online.

2. A multi-level marketing enterprise may notify the organization of more than one conference, seminar or training course on multi-level marketing in the same notice, provided that such conference, seminar or training course is organized within 3 months from the date of submission of the dossier of notification.

3. A multi-level marketing enterprise shall submit by hand-delivery, online or by postal service a dossier for notification of organization of a conference, seminar or training course on multi-level marketing to the provincial-level Department of Industry and Trade at least 15 working days before the expected date of organization of such conference, seminar or training course.

4. In case a dossier fails to comply with Clause 1 of this Article, within 7 working days after receiving it, the provincial-level Department of Industry and Trade shall issue a notice requesting the enterprise to modify/supplement the dossier. The time limit for dossier modification/supplementation is 10 working days after the provincial-level Department of Industry and Trade issues the notice.

5. An enterprise may organize a conference, seminar or training course if the provincial-level Department of Industry and Trade makes no request for modification/supplementation of the dossier within 7 working days after receiving the enterprise’s notice of organization of a conference, seminar or training course on multi-level marketing.

6. Pastthe time limit specified in Clause 5 of this Article, if wishing to make a change in information in its dossier for notification of organization of a conference, seminar or training course, an enterprise shall issue a notice thereof to the provincial-level Department of Industry and Trade at least 7 working days in advance.

An enterprise may organize a conference, seminar or training course if the provincial-level Department of Industry and Trade makes no request for modification/supplementation of the dossier within 7 working days after receiving the enterprise’s notice.

7. In case the enterprise has notified the organization of a conference, seminar or training course to the provincial-level Department of Industry and Trade but does not organize such conference, seminar or training course, it shall send a notice thereof in paper form or via email to the provincial-level Department of Industry and Trade before the expected date of organization of such conference, seminar or training course as stated in the dossier for notification.”

22. To amend and supplement Clause 1, Article 28 as follows:

“1. A multi-level marketing participant must be a person having full civil act capacity in accordance with law and residing in Vietnam.”

23. To amend and supplement Point b, Clause 2, Article 28 as follows:

“b/ He/she is a foreigner who has no permit to work in Vietnam granted by a competent agency, which is related to the multi-level marketing enterprise employing him/her, unless he/she is exempted from such a permit in accordance with law.”

24. To amend and supplement Point a, Clause 1, Article 36 as follows:

“a/ A request for recognition, made according to Form No. 13a provided in the Appendix to this Decree;”

25. To add Clause 3a to Article 36 as follows:

“3a. In case of a change in information in its dossier of request for recognition of a program on provision of legal knowledge about multi-level marketing, the training institution shall notify such change in writing to the Ministry of Industry and Trade.

Within 30 working days after receiving a dossier of request for recognition, the Ministry of Industry and Trade shall appraise the dossier and issue a notice of recognition of the changed information. In case the changed information has a content(s) that is/are illegal or incompliant with this Decree, the Ministry of Industry and Trade shall notify its non-recognition of the changed information.”

26. To amend and supplement Point a, Clause 3, Article 37 as follows:

“a/ Before January 31 every year, a training institution shall send a review report on the provision of legal knowledge about multi-level marketing in the preceding year, made according to Form No. 14a provided in the Appendix to this Decree, to the Ministry of Industry and Trade;”

27. To amend and supplement Article 38 as follows:

“Article 38. Certification of legal knowledge about multi-level marketing and knowledge for persons acting as focal points in localities

1. A person who has completed a training course on legal knowledge about multi-level marketing shall be registered by a multi-level marketing enterprise to sit an exam of legal knowledge about multi-level marketing or knowledge for persons acting as focal points in localities organized by the Ministry of Industry and Trade.

2. The Ministry of Industry and Trade shall grant a certification of legal knowledge about multi-level marketing or knowledge for persons acting as focal points in localities to persons who have passed the exam.

3. The Ministry of Industry and Trade shall provide specific regulations on the examination for, grant and revocation of, certification of legal knowledge about multi-level marketing and knowledge for persons acting as focal points in localities.”

28. To amend and supplement Article 39 as follows:

“Article 39. Order and procedures for grant of certification of legal knowledge about multi-level marketing or knowledge for persons acting as focal points in localities

1. A multi-level marketing enterprise shall submit by hand-delivery or by post a dossier for registration for examination for certification of legal knowledge about multi-level marketing or knowledge for persons acting as focal points in localities to the Ministry of Industry and Trade. The dossier must comprise:

a/ A request for examination for certification of legal knowledge about multi-level marketing, made according to Form No. 20a provided in the Appendix to this Decree, or a request for examination for certification of knowledge for persons acting as focal points in localities, made according to Form No. 20b provided in the Appendix to this Decree;

b/ A list of persons requested to take an exam for certification of legal knowledge about multi-level marketing or knowledge for persons acting as focal points, which must have the following information: full name, gender, date of birth, and serial number, date and place of issuance of people’s identity card/citizen identity card of each of the persons on the list;

c/ Two 3cm x 4cm photos of each of the persons on the list mentioned at Point b, Clause 1 of this Article;

d/ One copy of the certificate of completion of a training course in legal knowledge about multi-level marketing.

2. Within 15 working days after organizing an exam of legal knowledge about multi-level marketing or knowledge for persons acting as focal points in localities, the Ministry of Industry and Trade shall grant a certification of legal knowledge about multi-level marketing, made according to Form No. 21a provided in the Appendix to this Decree, or a certification of knowledge for persons acting as focal points in localities, made according to Form No. 21b provided in the Appendix to this Decree, to the persons who have passed the exam.

3. In case a certification of legal knowledge about multi-level marketing or knowledge for persons acting as focal points in localities is lost, torn or destroyed, the agency having organized the exam shall re-grant certification, and the requester for re-grant is not required to complete another training course on legal knowledge about multi-level marketing.”

29. To add Clause 13 to Article 40 as follows:

“13. To make sure that at least 20% of multi-level marketing sales in a fiscal year come from customers who are not multi-level marketing participants of the enterprise.”

30. To add Clause 14 to Article 40 as follows:

“14. To refrain from providing information on food by using images, equipment, costumes, names or mails of medical units or facilities, medical doctors, pharmacists or medical workers, thank-you letters or thank-you notes of patients, or articles of medical doctors, pharmacists or medical workers; to refrain from providing information on food by posting, quoting or citing patients’ opinions describing that the food has curative effects.”

31. To add Clause 5 to Article 41 as follows:

“5. To refrain from providing information on food by using images, equipment, costumes, names or mails of medical units or facilities, medical doctors, pharmacists or medical workers, thank-you letters or thank-you notes of patients, articles of medical doctors, pharmacists or medical workers; to refrain from providing information on food by posting, quoting or citing patients’ opinions describing that the food has curative effects.”

32. To amend and supplement Article 43 as follows:

“Article 43. Payout plans

1. A payout plan must clearly state ranks and titles of multi-level marketing participants, conditions satisfied by such participants, commissions, bonuses and other economic benefits payable to multi-level marketing participants of each rank or title.

2. Payout plans shall only apply to multi-level marketing participants of Vietnam-based enterprises.”

33. To amend and supplement Point d, Clause 2, Article 44 as follows:

“d/ Statistics of commissions, bonuses and other economic benefits of multi-level marketing participants.”

34. To amend and supplement Clause 4, Article 49 as follows:

“4. Before the 10th of every month (except January and July), a multi-level marketing enterprise shall send by hand-delivery, by postal service or via email to the provincial-level Department of Industry and Trade of the locality where it has registered multi-level marketing activities a list of multi-level marketing participants residing in the locality in the preceding month (which must clearly state the full name, date of birth, address of place of permanent residence or temporary residence, serial number of people’s identity card, citizen identity card or passport, serial number of contract on participation in multi-level marketing, date of contract signing, code and telephone number of each of the participants).”

35. To add Article 49a as follows:

“Article 49a. Modes of performance of administrative procedures

1. For documents involved in administrative procedures specified in this Decree for which certified copies are required, enterprises may submit copies and present the originals for collation at the time of dossier receipt.

2. In case of online performance of administrative procedures, multi-level marketing enterprises shall register their accounts on the online public service at http://dichvucong.moit.gov.vn; and use their registered accounts to declare and submit dossiers online.

After receiving a notice certifying that its dossier is complete and valid, the enterprise shall send to the Ministry of Industry and Trade a complete registration dossier (in paper form).

In case the information and documents included in the registration dossier in paper form are not consistent with those declared online by the enterprise, the Ministry of Industry and Trade shall notify the return of the dossier.”

36. To amend and supplement Clause 1, Article 50 as follows:

“1. Escrow means a money amount which secures the fulfillment by a multi-level marketing enterprise of its obligations toward multi-level marketing participants and the State in the cases specified in Clause 1, Article 53 of this Decree.

The obligations of multi-level marketing enterprises toward multi-level marketing participants mean obligations arising from lawful multi-level marketing activities, including the obligation to make payouts according to payout plans, the obligation to repurchase goods in case participants return goods in accordance with Article 47 of this Decree, and the obligation to return money in the cases specified in Article 46 of this Decree.”

37. To amend and supplement Article 53 as follows:

“Article 53. Handling of paid escrow amounts

1. Escrow may be used in the following cases:

a/ An enterprise terminates its multi-level marketing activities but fails to abide by the competent agency’s effective decision on sanctioning of violations in multi-level marketing activities;

b/ A multi-level marketing enterprise terminates its multi-level marketing activities under Clause 1, Article 17 of this Decree but fails to fulfill all the obligations related to multi-level marketing activities toward multi-level marketing participants, and there is a court’s legally effective judgment on the settlement of disputes between the multi-level marketing enterprise and multi-level marketing participants over such obligations.

2. Order and procedures for use of escrow in the case specified at Point a, Clause 1 of this Article:

a/ In case an enterprise terminates its multi-level marketing activities but fails to abide by the competent agency’s effective decision on sanctioning of violations in multi-level marketing activities, the agency having issued such sanctioning decision shall send a proposal to the Ministry of Industry and Trade for the latter to issue a request for the bank where the enterprise opens its escrow account to make deductions from such account for executing the sanctioning decision;

b/ Within 10 working days after receiving the proposal, the Ministry of Industry and Trade shall issue a request for the bank where the enterprise opens its escrow account to make deductions from such account for executing the sanctioning decision.

3. Order and procedures for use of escrow in the case specified at Point b, Clause 1 of this Article:

a/ Based on the court’s legally effective judgment or ruling, a multi-level marketing participant shall fulfill the request for judgment enforcement in accordance with the law on enforcement of civil judgments;

b/ In case it is allowed to use escrow under Clause 1, Article 50 of this Decree, the judgment enforcement agency shall send a proposal to the Ministry of Industry and Trade, enclosed with a copy of the legally effective judgment, a copy of the judgment enforcement decision, and the decision on deduction of money from the enterprise’s escrow account for judgment enforcement;

c/ Within 10 days after receiving the proposal from the judgment enforcement agency, the Ministry of Industry and Trade shall notify such to the judgment enforcement agency and the bank where the enterprise opens its escrow account for the latter to make deductions from such account for judgment enforcement.

In case it is determined that the dispute under the judgment does not fall into the cases eligible for use of escrow specified in Clause 1, Article 50 of this Decree, the Ministry of Industry and Trade shall notify such to the judgment enforcement agency for the latter to perform other judgment enforcement measures in accordance with law.

4. The Ministry of Industry and Trade shall permit the use of escrow as soon as it receives a valid dossier of request therefor.

5. After being used under Clauses 1, 2, 3 and 4 of this Article, if the escrow amount has not been used up but the enterprise has not yet fulfilled other obligations according to the court’s effective judgment, the remaining escrow amount shall be transferred to a competent judgment enforcement agency for judgment enforcement in accordance with law.”

38. To amend and supplement Clause 4, Article 55 as follows:

“4. The Ministry of Finance:

a/ To conduct tax administration for multi-level marketing activities in accordance with the tax laws;

b/ To promptly, accurately and objectively publicize information about multi-level marketing activities in accordance with the law on tax administration.”

39. To amend and supplement Point g, Clause 1, Article 56 as follows:

“g/ To send annual reports before February 15 of the subsequent year, made according to Form No. 19 provided in the Appendix to this Decree, or unscheduled reports at the request of the Ministry of Industry and Trade, on the management of multi-level marketing activities in their localities;”

40. To replace the phrase “submit by hand-delivery or by post” at Point a, Clause 3, Article 12; Clause 1, Article 13; Clause 2, Article 21; Clause 2, Article 22; Clauses 1 and 2, Article 25; Clause 1, Article 52; and Point a, Clause 4, Article 52 with the phrase “submit by hand-delivery or online or by postal service”; to replace the word “post” at Point a, Clause 5, Article 10 with the phrase “postal service”.

41. To replace the phrase “representative of the multi-level marketing enterprise” at Point b, Clause 1, Article 22 with the phrase “person acting as the focal point of the enterprise”; to replace the phrase “local representative” in Forms No. 7, 8, 11, 15 and 16 with the phrase “person acting as focal point in locality”.

42. To add Forms No. 06a, 13a, 14a, 19, 20a, 20b, 21a and 21b in the Appendix to this Decree.

Article 2. Implementation responsibility

1. The Minister of Industry and Trade shall organize the implementation of this Decree.

2. Ministers, heads of ministerial-level agencies, heads of government-attached agencies and chairpersons of provincial-level People’s Committees shall implement this Decree.

Article 3. Effect

1. This Decree takes effect on June 20, 2023.

2. Within 12 months from the effective date of this Decree, multi-level marketing enterprises already granted a certification of registration of multi-level marketing activities in localities shall satisfy the conditions for registration of multi-level marketing activities in localities specified in this Decree.

3. Multi-level marketing enterprises already granted multi-level marketing registration certificates in accordance with law may continue to operate until the expiry dates of such certificates. At the time of request for extension of their multi-level marketing registration certificates, multi-level marketing enterprises shall satisfy the conditions for registration of multi-level marketing activities specified in Article 7 of this Decree.