M2M businesses must deposit 5 percent of chartered capital

SGGP
Multi-level marketing (MLM) businesses are responsible for making a deposit equivalent to 5 percent of their chartered capital and not lower than VND10 billion (US$430,000) at commercial banks or foreign bank branches in Vietnam from January 1, 2019 according to Circular 29 issued by the State Bank of Vietnam.

M2M businesses must deposit 5 percent of chartered capital

  The deposit will have interest and interest rate will be negotiated by businesses and banks in accordance with regulations on reward rates for the Vietnamese dong by the State Bank of Vietnam in each period.
The deposit aims to ensure that MLM businesses will conduct their obligations to their employees and the State.
Article 1 in the Government’s Decree 40 stipulates that deposit will be used in case that MLM businesses stop operation without fully implementing their duties, businesses stop operation without abiding by decisions penalizing violations in network marketing activities by authorized agencies.
In case the deposited amount of businesses is insufficient to make payment as per requirement in writing by the Ministry of Industry and Trade, banks receiving deposits must send an announcement to the ministry and handle according to the text feedback from the ministry.

By CHE HAN – Translated by Hai Mien

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