Discusses the state of direct marketing and what channels are available for companies to use direct marketing.
Last Published: 7/10/2018

Direct marketing and multi-level marketing are recognized as a legal business model in Vietnam and is regulated by the Law on Competition and Decree 110/2004/ND-CP issued in 2004. A decade later Decree 110 was replaced by Decree 42/2014/ND-CP. However, the Ministry of Industry and Trade proposed new regulations to strengthen regulation of businesses utilizing multi-level marketing to encourage a transparent multi-level marketing sector. Therefore, the government issued the Decree 40/2018/ND-CP on March 12, 2018, replacing Decree 42, to promote the management of multi-marketing business operations.

Under Decree No. 40/2018/ND-CP, a multi-level marketing firm is required to have the minimum registered capital of approximately VND 10 billion (approximately $439,000) before it can receive a business license. The new regulations target pyramid schemes by specifying what a multi-level marketing firm must not do, including forcing new participants to pay a deposit or buy the firm’s goods to participate in the firm’s business. Multi-level marketing firms are not allowed to sell or transfer networks of participants who join multi-level marketing activities to other firms, excluding cases of acquisition, consolidation, or merger of corporations, or to entice corrupt participants of other multi-level marketing companies to join their networks. The new decree prohibits multi-level marketing firms from providing false or misleading information about the benefits of participating in multi-level marketing, features, and uses of goods, as well as activities of multi-level marketing businesses.

The ranks of direct marketing and direct sales agents/distributors continue to grow. These include companies in personal care, cosmetics, and nutrition, as well as household products. Some multi-level marketing firms have established production in Vietnam. Foreign life insurance companies are also licensed for multi-level marketing and have assembled large teams of agents who engage in traditional telemarketing, door-to-door selling, and workplace marketing in urban areas.

The Ministry of Industry and Trade grants business licenses for multilevel marketing firms. Licensed multilevel marketing firms that have no operations or have stopped operations for twelve consecutive months will have their business licenses revoked.

Firms interested in direct marketing or multi-level marketing are strongly encouraged to seek the advice of a competent legal counsel. In addition, the American Chamber of Commerce in Vietnam has established a Direct Selling Committee that meets regularly to discuss industry developments.

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.

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