Ministry tightens control on multi-level marketing firms

The Ministry of Industry and Trade has cracked down on multi-level marketing firms and issued new regulations that will tighten control, though not altogether ban such operations.

The Ministry will now issue licenses to multi-level marketing firms for a maximum period of five years. All multi-level marketing firms must also have a minimum chartered capital of VND10 billion (US$470,000) and a deposit of VND5 billion ($235,000) at an authorized state agency.

To protect consumers, multi-level marketing firms must notify the local departments of trade and industry about the time and venue of their workshops, conferences, and sales training sessions, as most such firms take advantage of open events to expand their network.

The Ministry also requires multi-level marketing firms not to charge participants for basic training sessions, or charge only a reasonable amount to cover material costs and not compel them to purchase a certain amount of commodities.

By Lac Phong - Translated by Uyen Phuong

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