Proposal to Simplify Administrative Procedures in the Multi-level Marketing Sector

Vietnam Proposes New Decree to Streamline Multi-level Marketing Regulations

The Ministry of Industry and Trade is currently seeking public feedback on a draft decree regulating multi-level marketing (MLM) businesses, intended to replace Decree No. 40/2018/ND-CP (issued on March 12, 2018) as amended by Decree No. 18/2023/ND-CP (dated April 28, 2023).

The new draft is expected to enhance the legal framework governing MLM activities, align with the government's administrative reform goals, and facilitate a more favorable environment for legitimate businesses.

According to the Ministry, "the purpose of drafting a new decree is to reflect the evolving nature of multi-level marketing models, address existing shortcomings in implementation, and especially to curb the misuse of MLM for illegal activities disguised as legitimate business operations."

The draft introduces numerous amendments aimed at increasing transparency, professionalism, and legal compliance within the industry. A key pillar of the proposed decree is the review and simplification of administrative procedures related to MLM—part of the broader administrative reform program under Resolution No. 66/NQ-CP on simplifying procedures by 2025.

Specifically, 11 administrative procedures are proposed to be revised, eliminating unnecessary steps while ensuring no additional compliance costs for businesses. Procedures concerning the issuance, renewal, amendment, reissuance, and termination of MLM business registration certificates will be streamlined to reduce processing time. Other processes, such as activity notifications, training program approvals, deposit withdrawals, and provincial-level activity registrations or updates, are also set for revision.

The draft decree further proposes the complete elimination of two procedures: notification of changes to the list of marketed products and the legal knowledge certification process for MLM participants. These eliminations aim to reduce unnecessary administrative burdens and cut costs for legitimate businesses.

The new decree seeks to balance tighter regulatory oversight with an enabling environment for compliant enterprises, fostering a transparent, competitive, and practical business landscape.

Currently, Vietnam has 16 licensed MLM companies in operation, a significant decrease from nearly 70 at the peak in 2016.