Hanoi (VNS/VNA) - The Ministry of Industry and Trade has madepublic for comments draft amendments to Decree No 40/2018/ND-CP aboutmanaging multi-level marketing business.
The ministry said multi-level marketing must be strictly managed and in linewith the Government’s policy of increasing investment attracting and creatingthe most favourable conditions for enterprises’ operation.
Some regulations on multi-level marketing must be reviewed and amended toensure they are appropriate for reality as well as feasible, the ministrysaid.
The ministry’s statistics showed the number of multi-level marketingenterprises has dropped by two thirds since 2016, with a half having hadtheir licences revoked and the other half stopping operation due toinefficiency.
From 2018, nearly 20 enterprises applied for operating as a multi-levelmarketing business, two-thirds of which were foreign-invested.
The ministry said foreign-invested companies wanting to invest in Vietnam was agood sign. However, careful consideration was needed to evaluate the demand formarket entry of foreign-invested companies in multi-level marketing.
Multi-level marketing has a history of hundreds of years in the world and beenrecognised as a business type in a number of countries. Still, there havebeen controversies over the nature of this business which saw many scams.
Most countries use tough management on multi-level marketing to minimise therisk of scams, according to the ministry.
The fact that more than 30 percent of multi-level marketing enterprises hadlost their licences showed it was necessary to tighten the regulations onmarket entry for this business, the ministry said.
The ministry proposed that foreign-invested enterprises registered asmulti-level marketing businesses in Vietnam must have operated for at leastthree years in another country.
The draft decree also includes a regulation to create a more efficientmechanism in managing the operation of multi-level marketing in localitieswhile not causing difficulties and pushing up compliance costs for enterprises.
The ministry also proposed clarifying the obligations of multi-level marketingparticipants.
In addition, the ministry proposed international patronage be banned formulti-level marketing business to prevent enterprises from transferring moneyto foreign countries in the form of commission.
The decree is expected to be proposed to the Government for approval in thelast quarter of 2021./.
The ministry said multi-level marketing must be strictly managed and in linewith the Government’s policy of increasing investment attracting and creatingthe most favourable conditions for enterprises’ operation.
Some regulations on multi-level marketing must be reviewed and amended toensure they are appropriate for reality as well as feasible, the ministrysaid.
The ministry’s statistics showed the number of multi-level marketingenterprises has dropped by two thirds since 2016, with a half having hadtheir licences revoked and the other half stopping operation due toinefficiency.
From 2018, nearly 20 enterprises applied for operating as a multi-levelmarketing business, two-thirds of which were foreign-invested.
The ministry said foreign-invested companies wanting to invest in Vietnam was agood sign. However, careful consideration was needed to evaluate the demand formarket entry of foreign-invested companies in multi-level marketing.
Multi-level marketing has a history of hundreds of years in the world and beenrecognised as a business type in a number of countries. Still, there havebeen controversies over the nature of this business which saw many scams.
Most countries use tough management on multi-level marketing to minimise therisk of scams, according to the ministry.
The fact that more than 30 percent of multi-level marketing enterprises hadlost their licences showed it was necessary to tighten the regulations onmarket entry for this business, the ministry said.
The ministry proposed that foreign-invested enterprises registered asmulti-level marketing businesses in Vietnam must have operated for at leastthree years in another country.
The draft decree also includes a regulation to create a more efficientmechanism in managing the operation of multi-level marketing in localitieswhile not causing difficulties and pushing up compliance costs for enterprises.
The ministry also proposed clarifying the obligations of multi-level marketingparticipants.
In addition, the ministry proposed international patronage be banned formulti-level marketing business to prevent enterprises from transferring moneyto foreign countries in the form of commission.
The decree is expected to be proposed to the Government for approval in thelast quarter of 2021./.
VNA
