Vietnam Tightens Oversight of Multi-Level Marketing with New Decree

On April 7, 2026, Vietnam introduced a new regulatory framework for multi-level marketing (MLM) through Decree No. 137/2026/ND-CP (“Decree 137”). The decree aims to reduce harmful practices and encourage a more transparent, consumer-focused industry.

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Effective from July 1, 2026, Decree 137 will replace Decree No. 40/2018/ND-CP. The new directive provides a comprehensive framework covering registration, operation, participant management, escrow requirements, and state supervision of MLM activities.

See also: Vietnam Regulatory Update: Key Changes Effective April 2026

Key changes of Decree 137

Reducing and simplifying administrative procedures and business conditions

The decree restructures administrative processes for MLM registration and operations, including clearer procedures for licensing, local registration, and reporting obligations, under a unified framework.

Improving regulations on the decentralization of responsibilities

Provincial-level authorities are formally assigned responsibilities in managing MLM activities at the local level, including:

• Issuing confirmation of MLM activity registration within their jurisdiction;
• Public disclosure of registered enterprises; and
• Revocation of local operation approvals where violations occur.

Revising and refining provisions to address practical challenges

The decree provides more detailed and structured provisions on:

• MLM contracts and termination rights;
• Training obligations for participants; and
• Operational procedures across different stages of MLM activities.

Supplementing new provisions to enhance state management

The decree introduces clearer supervisory mechanisms across the MLM lifecycle, including:

• Central and local coordination in licensing and oversight;
• Defined compliance obligations for enterprises; and
• Expanded enforcement tools, such as certificate revocation and operational termination.

Scope of application and definition of MLM activities

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The decree applies to:

• MLM enterprises;
• MLM participants;
• Local representatives and trainers;
• Other related organizations and individuals.

MLM activities are strictly limited to goods. Any MLM business involving non-goods (e.g., services) is prohibited unless otherwise permitted by law.

Prohibited product categories include:

• Pharmaceuticals and medical devices;
• Veterinary drugs and pesticides;
• Hazardous or restricted chemicals;
• Digital content products.

Licensing conditions and operational requirements

To obtain an MLM registration certificate, enterprises must meet the following conditions:

• Be established in Vietnam and not previously have had an MLM license revoked;
• Ensure that owners, shareholders, managers, and legal representatives have no involvement in revoked MLM entities;
• Maintain an escrow deposit at a licensed bank in Vietnam;
• Establish compliant participation contracts, compensation plans, and training programs;
• Operate an IT system and official website to manage MLM networks;
• For foreign investors: demonstrate at least three consecutive years of MLM experience abroad.

The MLM registration certificate is valid for five years from the date of issuance.

Participants: eligibility, training, and contract rules

MLM participants must be individuals with full civil capacity and residing in Vietnam.

Enterprises are prohibited from contracting with individuals who have certain administrative violations related to consumer protection or MLM activities that have not yet expired.

Training requirements

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Enterprises must provide mandatory basic training within 30 working days of contract signing. Key rules include:

• Training must be free of charge;
• Only qualified trainers designated by the enterprise may conduct training;
• Training can be conducted in-person or remotely with interactive systems; and
• Participants must complete training and receive certification.

Contract termination

Participants may unilaterally terminate contracts with prior notice, while enterprises must settle outstanding commissions and bonuses within 30 working days after termination.

Operational obligations and compliance requirements

MLM enterprises are subject to extensive operational obligations, including:

• Maintaining IT systems to manage participant networks;
• Operating official websites to disclose MLM activities;
• Establishing communication channels for complaints and inquiries;
• Providing system access to authorities upon request.

Notably, the decree introduces a substantive sales requirement that at least 20 percent of MLM revenue must come from non-participants (end consumers). This provision directly targets pyramid-style structures and reinforces consumer-oriented sales.

Registration, local operation, and revocation mechanisms

MLM enterprises must register their activities at the provincial level. Authorities will:

• Issue confirmation within five working days if dossiers are valid;
• Publicly disclose approved registrations.

Local registration may be revoked in cases such as:

• Fraudulent application information;
• Failure to operate for 12 consecutive months;
• Non-compliance with regulatory obligations;
• Expired or revoked national MLM certificate.

Escrow and financial safeguards

The decree requires enterprises to maintain an escrow deposit at a licensed bank in Vietnam to ensure fulfillment of obligations toward participants and consumers.

Implications for businesses and investors

Decree 137 establishes a more structured and enforceable legal framework for MLM in Vietnam.

Key implications include:

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• Higher compliance burden: stricter licensing, operational, and reporting requirements;
• Stronger consumer protection: training, contract clarity, and revenue structure rules;
• Greater enforcement risk: expanded grounds for revocation and tighter local oversight;
• More transparent operations: mandatory IT systems and public disclosure obligations.

For investors, especially foreign entrants, the requirement for prior MLM experience and tighter governance standards indicates a more selective regulatory environment.

Outlook

Decree 137 represents a significant step in strengthening Vietnam’s regulatory control over MLM activities. By tightening operational requirements while clarifying procedures, the government aims to curb abusive models and promote a more transparent, consumer-oriented sector.

Businesses should proactively align their structures, contracts, and compliance systems ahead of the July 2026 implementation deadline.

Setting up a business in Vietnam requires navigating company registration, local approvals, and work permit processes. We help FDI companies by preparing and submitting documentation, coordinating with authorities, and ensuring compliance, so they can start operations smoothly and focus on growth.

Tam Nguyen

Senior Manager

Talk to an expert at vietnam@dezshira.com

Or request a consultation at +84 28 3930 2828

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