Tighten the Registration Requirements for Multi-Level Sales

01/12/2020, 08:34 AM

Before participating in multi-level marketing in the Vietnamese market, a foreign-invested enterprise must have engaged in multi-level marketing activities for at least 3 years in another country.

This is the proposal of the Ministry of Industry and Trade in the proposal to develop a Decree amending and supplementing the Government's Decree No. 40/2018 / ND-CP on business management in a multi-level mode.

According to the Ministry of Industry and Trade, from 2016 up to now, the number of enterprises registered to operate multi-level sales has decreased by 2/3. In which, one third of enterprises had their certificates revoked, one third of them terminated their operation due to inefficiency. However, there are still many businesses that need to register for new activities.

From 2018 up to now, nearly 20 businesses have submitted their registration documents for multi-level marketing activities to the Ministry of Industry and Trade. In which, more than 2/3 of them are foreign invested enterprises. The fact that foreign-invested enterprises want to participate in the Vietnamese market is a good signal in terms of investment attraction, creating many positive impacts on the economy. However, for the multi-level business sector, careful assessment is required when considering the market entry demand of foreign-invested enterprises.

Multi-level business is a business method that has appeared for hundreds of years and is recognized in many countries around the world. However, up to now, there is still a lot of controversy about the nature of this type of business because there are many fraud cases occurring on the basis of taking advantage of multi-level business models, even in Europe. Therefore, many countries implement a business screening mechanism to minimize the risk of fraud, causing damage to the people.

To solve the above problem, through reference to international experience, the Ministry of Industry and Trade proposes: Supplementing the conditions for better management from pre-check in order to improve the input quality of new multi-level enterprises entering the market, ensuring that they have had experience in multi-level marketing before entering the Vietnamese market.

The solution for implementation is: Supplementing the condition that foreign-invested enterprises must conduct multi-level marketing activities for 3 years in another country before entering the Vietnamese market. This condition only applies to foreign-invested enterprises.

According to the Ministry of Industry and Trade, this solution helps to screen businesses participating in the multi-level marketing market, one of the professions that are used fraudulently in Vietnam. Requiring enterprises with experience operating abroad on the one hand helps the certification authority to have a basis for assessing the credit of the business, on the other hand, it can also select businesses with experience in internal management because This activity is carried out through the network of tens or hundreds of thousands of participants.

 

Source: Bao Chinh Phu

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