On April 28, 2023, the Government has just issued Decree No. 18/2023/ND-CP amending and supplementing a number of articles of Decree No. 40/2018/ND-CP dated March 12, 2018 on operation management business by multi-level method (hereinafter referred to as “Decree 18/2023/ND-CP”)

Accordingly, Decree 18/2023/ND-CP has the following highlights:

(i)    Adding additional conditions in case the organization registers for multi-level sale activities that: The enterprise has a foreign investor or a foreign-invested economic organization as the owner or member or shareholder, All foreign investors and foreign-invested economic organizations must have been operating in multi-level sales for at least 3 consecutive years in a country or territory in the world. 

(ii)    In addition, Decree No. 18/2023/ND-CP supplements Clauses 13, 14, Article 40 of Decree No. 40/2018/ND-CP on responsibilities of multi-level selling enterprises. Accordingly, a multi-level selling enterprise must ensure that at least 20% of its multi-level sale revenue in a fiscal year is revenue from customers who are not participants in multi-level sales of such enterprise.

Therefore, organizations that want to register for multi-level sales activities have the responsibility to meet all the conditions prescribed by the law mentioned above.

Decree No. 18/2023/ND-CP takes effect from June 20, 2023.