Strict control should be exercised over multi-level marketing networks right from the grassroots level.

The promulgation of Decree No. 137/2026/ND-CP dated April 7, 2026, marks a turning point in the management of multi-level marketing activities in Vietnam. Instead of centralized management at the central level, the Decree has promoted decentralization, granting greater power and responsibility to local authorities to tightly control multi-level marketing networks from the grassroots level.

Việt Nam•14/04/2026

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Legal framework and conditions for entering the local market.

Decree 137/2026/ND-CP expanded the concept of "multi-level marketing activities at the local level" in Article 19 to encompass all forms of market access. Businesses no longer need to have a headquarters or branch to be subject to management; simply organizing a seminar or having participants residing in that locality is enough to officially place them under the supervision of the provincial People's Committee. This is an important legal basis for eliminating the situation of businesses operating "outside the control."

To operate legally, businesses are required to register and obtain written confirmation from the provincial People's Committee. Specifically, Article 20 outlines a strategic requirement: For provinces where businesses do not have a registered office, they must designate a designated contact person. This contact person must be a local resident with a proven track record of legal knowledge and be officially authorized to be accountable to the relevant authorities. This "contact person" regulation localizes the responsibility of businesses, ensuring that in the event of complaints or incidents, citizens and authorities have a specific representative to work with directly, rather than having to contact a distant headquarters.

Registration, monitoring and administrative procedure reform process

Articles 21 and 22 of Decree 137/2026/ND-CP clearly demonstrate the spirit of digital transformation and information transparency. The application process is simplified through the National Public Service Portal, allowing businesses to complete procedures online quickly. The response time of the authorities is shortened (only 5 working days), creating favorable conditions for legitimate businesses to start operating sooner.

Besides facilitating the process, the Decree also establishes a very strict monitoring mechanism for training and seminars in Article 26. Businesses are only allowed to organize multi-level marketing conferences and seminars in the province where they have registered their operations. Events with large gatherings (50 or more people or 20 or more multi-level marketing participants) must be notified in advance to the Provincial People's Committee. This regulation applies not only to in-person meetings but also extends to online formats if the organizer is present in that locality. This helps prevent "brainwashing" activities and the manipulation of people through disguised seminars that exaggerate the truth about products and income.

Penalties for withdrawal and responsibility to protect the rights of participants.

The final and most deterrent part of the Decree lies in the regulations regarding the revocation of registration confirmations and termination of operations at the local level (Articles 23, 24, and 25). The Provincial People's Committee has the full authority to revoke the confirmation if the enterprise engages in fraudulent activities, fails to commence actual operations for 12 consecutive months, or fails to maintain the required conditions regarding the designated contact person. Once revoked, the enterprise will be suspended from operating within that province and will be restricted from re-issuing the registration for a long period.

Decree 137/2026/ND-CP specifically emphasizes the post-closure obligations of businesses upon cessation of operations. Businesses are not allowed to "quietly withdraw" but must publicly list information on their website and at their local headquarters. Most importantly, businesses are responsible for liquidating contracts and fully settling the rights and financial interests of participants in accordance with the law. Only when all obligations and administrative penalties at the local level are fulfilled can the business's closure process be considered complete. This strictness in the final stage is the last line of defense protecting consumers and preventing businesses from fleeing and leaving economic consequences for local residents.

With the three aforementioned pillars of management, Decree 137/2026/ND-CP has created an orderly, transparent, and law-abiding environment for multi-level marketing businesses. Strict enforcement of these regulations not only helps to purify the market but also promotes the sustainable development of reputable MLM businesses, contributing positively to the socio-economic development of each locality.

Source: https://ninhbinh.gov.vn/kinh-te/kiem-soat-chat-che-mang-luoi-ban-hang-da-cap-ngay-tu-co-so-379507