To manage multi-level marketing better a decree is drafted to
amend Decree 40. Requirements are introduced to limit fraud and
close loopholes. Also, experience will be required prior to
investing in Vietnam. Finally, transparency will be improved.
LEGAL UPDATE
A new draft decree (Draft Decree) intends to
amend and supplement Decree No. 40/2018/ND-CP
(Decree 40) that provides a regulatory
framework for multi-level marketing activities
(MLM) in Vietnam. The Draft Decree suggests a wad
of new compliance regulations that envisage controlling known
industry problems. Significant changes, as proposed by this Draft
Decree, are summarised below.
1. Minimum Commission Rate
Until now, Decree 40 does not impose a minimum commission rate
on individual sales of MLM participants. The Draft Decree suggests
a minimum of 20% commission on each sale, which aims to prevent
fraudulent business models under MLM guise and increase the average
revenue share of participants.
