On the proposal of the Minister of Industry and Trade, on April 28, 2023, the Government issued Decree 18/2023/ND-CP amending and supplementing some articles of Decree No. 40/2018/ND-CP 03.12.2018 on the management of business activities the multilevel method.

Accordingly, the decree will come into force on June 20, 2023. The decree has some new points to consider.

The first, The decree stipulates that multi-level sales companies must ensure that at least 20% of the multi-level sales revenues in a financial year are sales from customers who are not multi-level sales participants.

This regulation aims to promote multi-level sales activities to develop according to the nature of retail sales activities and bring goods to consumers instead of just consuming within the system of participants.

Monday, The decree adds regulations to improve the conditions for business contacts in the community. Accordingly, if a company does not have a head office, branch, representative office or office locally, it must designate a local contact point and this point of contact must be trained, subjected to a knowledge test and certified by the Ministry of Industry and Commerce to certify that new knowledge is considered a point of contact for companies.

This regulation aims to overcome the situation where companies appoint a focal point to deal with without understanding the law or how companies operate locally, causing difficulties for management in the region.

Tuesday, On the basis of multi-level sales activities in the field of conditional market access for foreign investors under the provisions of the Investment Law, Decree 18/2023/ND-CP added conditions for registration of multi-level sales activities for organizations Registration for multi-level sales activities, in which there are companies with foreign investors or foreign-invested business organizations as owners or members or shareholders.

Accordingly, in this case, all such foreign investors and foreign-invested business organizations must have been engaged in multi-level sales in a given location, countries and regions around the world for at least 03 consecutive years.

This condition is intended to help vet foreign investors experienced in multi-level sales activities before entering the Vietnamese market, thereby reducing the risk of large-scale fraud.

In addition, multi-level sales activities also fall within the scope of retail sales activities, so companies with shareholders or owners who are foreign investors also need to comply with the regulations on business licenses in Vietnam, Decree No. 09/2018/ND -CP, which is the Commerce Law and the Law on Foreign Trade Management detailing commodities buying and selling activities and activities directly related to the buying and selling of commodities by foreign investors and business organizations with foreign investment capital in Vietnam.

Wednesday, changing regulations to announce conferences, seminars and training in multi-level sales activities. Accordingly, conferences, seminars and training courses conducted online must also be notified to the Ministry of Industry and Trade before they are held. This regulation aims to overcome the situation of organizing online activities in order to avoid the inspection and supervision of the authorities for multi-level sales activities.

Thursday, Changing the regulations on deeds, orders and procedures for conducting a number of administrative procedures with the aim of creating favorable conditions for companies when conducting administrative procedures, reducing unnecessary procedures and reducing costs.

The amendment of a number of regulations to improve the practicability and effectiveness of the multi-level sales management mechanism, such as B. Conditions for multi-level sales participants in Vietnam, regulations on various types of conferences, etc. Scope of notification before implementation, content of the scope of bonus plan in Vietnam, clearly indicating the content and mechanism of using the deposit …

The decree also contains transitional provisions. Within 12 months from the date of entry into force of this Decree, multi-level distribution companies that have received confirmation of registration of multi-level sales activities in their territory must meet the conditions for registration of multi-level sales activities in their territory .local multi-level goods in accordance with the provisions of this Decree .

Multilevel distribution companies that have been issued with the Certificate of Registration of Multilevel Distribution Activities in accordance with the Law may continue their activity until the expiration of the validity period of the certificate.

At the time of implementation of the extension of the multi-level sales registration certificate, the multi-level sales company is responsible for fulfilling the conditions for registration of multi-level sales activities in accordance with Article 7 of this Decree.

In order to ensure the implementation of the Decree, the National Competition Commission is finalizing a draft circular amending and supplementing a number of articles of Circular No. 10/2018/TT-BCT, which lists a number of articles of Decree No. 40/2018 are. ND-CP to be submitted to Minister of Industry and Trade for promulgation.