Dozens of foreign firms fail to register MLM business

June 15, 2020 | 17:03

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Only three of the 20 firms lodging an application last year have met all registration criteria to run multi-level marketing (MLM) business in Vietnam.

dozens of foreign firms fail to register mlm business

Dozens of foreign firms were refused MLM business registration by the MoIT

The Ministry of Industry and Trade (MoIT) has just revealed that last year 20 businesses (mainly foreign ones) submitted 41 documents to register as new MLM business. However, after checking them, only three businesses met the ministry's criteria while the other 17 were refused.

As a result, there are now 22 firms nationwide to be licensed for MLM business. From early 2019 to May 2020, the MoIT extended the business registration of 14 firms, only one failed to meet all regulations of Decree No.40/2018/ND-CP dated March 12, 2018.

After a time of uncontrolled operations causing a lot of damage to society, the government is extending oversight of MLMs to ensure legal compliance. The number of violations and issues related to MLM are decreasing both in quantity and level of seriousness.

In 2019, after some inspection, the MoIT fined four businesses to a total of VND1.81 billion ($78,700) and revoked their MLM registration certificates and uncovered five others that did not comply with regulations.

According to reports of the departments of industry and trade of cities and provinces, MLM business did not make all that much noise. In 2019, violations and penalties were only reported in only four of the 50 localities (Hanoi, Ninh Binh, Dong Nai, Danang) that reported to the MoIT, with VND1.139 billion ($49,520) in total fines. Checks and inspections were conducted in numerous localities but uncovered no violations.

This year, the MoIT will carry out inspections at seven MLMs, make inquiries at three facilities training MLM staff, and stage extraordinary investigations at MLM firms that show violations.

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