MLM registration procedure [UPDATE 2025]

The MLM registration procedure is a legal process for lawful operation and market credibility. Under Decree 40/2018/ND-CP, understanding the conditions for charter capital, deposits, required dossiers, and the submission process to the National Competition Commission is a mandatory obligation. This knowledge is key to mitigating legal risks. This guide provides a detailed roadmap for an effective registration.

What is Multi-Level Marketing? Subjects Not Permitted in MLM

Multi-level marketing (MLM) is a business method using a network of participants across multiple levels and branches, as defined in Clause 1, Article 3 of Government Decree 40/2018/ND-CP dated March 12, 2018. This activity allows participants to earn commissions from their sales results and the results of others in their network. This model creates business opportunities but requires strict management to ensure legality.

Subjects not permitted to engage in MLM are specified in Clause 2, Article 4 of Government Decree 40/2018/ND-CP dated March 12, 2018. These include:

• Business objects that are not goods.
• Certain goods such as medicines, medical equipment, veterinary drugs, pesticides, hazardous chemicals, restricted-use insecticides and germicides, and digital information content products.

MLM is a business model with potential, but it carries risks if legal regulations are not followed. A clear understanding of the scope of activities and prohibited subjects is critical for enterprises and individuals to avoid violations and protect their legal rights.

Conditions for the MLM Registration Procedure

The conditions for registering multi-level marketing activities are detailed in Article 7 of Government Decree 40/2018/ND-CP dated March 12, 2018, as amended by Decree 18/2023/ND-CP dated April 28, 2023:

• The enterprise must be a legal entity established in Vietnam and must not have previously had its registration certificate revoked.
• The company must have a minimum charter capital of 10 billion VND to ensure financial capacity.
• Members, owners, shareholders, and the legal representative must not have been involved in an MLM enterprise whose certificate was revoked.
• An escrow deposit at a commercial bank or foreign bank branch in Vietnam is mandatory, as required by Clause 2, Article 50 of Government Decree 40/2018/ND-CP.
• The company must have a clear and transparent MLM participation contract, rules of operation, compensation plan, and basic training program.
• An information technology system to manage the network of participants and a corporate website are required.
• A communication system to receive and resolve inquiries and complaints from participants must be established.
• For enterprises with foreign investors, a special condition is a minimum of 03 consecutive years of MLM operation in another country or territory.

To complete the MLM registration procedure in Vietnam, an enterprise must meet all the above conditions. Compliance with requirements for capital, personnel, operational systems, and legal frameworks enables licensing and creates a foundation for sustainable, transparent development.

Dossier for Multi-Level Marketing Registration

The dossier for the MLM registration procedure is specified in Article 9 of Government Decree 40/2018/ND-CP dated March 12, 2018 (amended by Decree 18/2023/ND-CP dated April 28, 2023). The enterprise must prepare all documents with a company seal. The dossier includes:

• An application for a certificate, using Form No. 01 from the appendix of Decree 40/2018/ND-CP.
• A copy of the enterprise registration certificate or equivalent legal document proving the company’s legal status.
• A list and certified copies of personal identification for individuals specified in Point c, Clause 1, Article 7 of Decree 40/2018/ND-CP.
• Two sets of documents related to MLM activities, including the participant contract template, compensation plan, basic training program, and rules of operation.
• A written confirmation of the escrow deposit.
• Technical explanation documents for the IT system managing the network, meeting the requirements of Article 44 of Decree 40/2018/ND-CP, including the server IP address, operational mechanism, and data management information.

Preparing a complete and accurate dossier according to Decree 40/2018/ND-CP is a critical first step. It ensures a swift approval process and avoids errors during the appraisal.

>>> See more at: When is it necessary to renew the Multi-Level Marketing Activity Registration Certificate?

The MLM Registration Procedure

The MLM registration procedure follows Article 10 of Government Decree 40/2018/ND-CP dated March 12, 2018 (amended by Decree 18/2023/ND-CP), and includes the following steps:

1. The enterprise submits one dossier set as specified in Article 9 of Decree 40/2018/ND-CP. The submission must include electronic versions of the documents in “.doc” or “.docx” and “.xls” or “.xlsx” formats to the Office of the National Competition Commission – Ministry of Industry and Trade.
2. The competent authority receives and checks the dossier for completeness and validity within 05 working days.
3. The National Competition Commission will notify the enterprise to amend or supplement the dossier within 30 days if it is incomplete or invalid. If the enterprise fails to amend the dossier as requested within the specified time, the National Competition Commission will return the dossier.
4. After receiving a complete and valid dossier, the National Competition Commission will appraise it within 20 working days from the date of receiving the appraisal fee.
5. If the dossier meets the requirements, the National Competition Commission will issue a Certificate of Registration of Multi-Level Marketing Activities to the enterprise.

Adhering to the correct MLM registration procedure shortens the appraisal time and increases the likelihood of receiving the certificate on the first submission.

MLM Registration Consulting Services at Long Phan Consulting Company

Long Phan Consulting Company provides professional and reputable services for the MLM registration procedure. Our services include:

• Consulting on the conditions for conducting MLM business.
• Advising on solutions if the enterprise does not yet meet the conditions.
• Assisting in drafting necessary documents such as the application for the certificate, participant contract template, compensation plan, training program, and rules of operation.
• Providing guidance on the registration process and handling complaints against legal violations by competent authorities.
• Acting as an authorized representative to submit the dossier, attend meetings with competent authorities, receive the results, and deliver them to you.

Long Phan Consulting Company commits to partnering with your enterprise from dossier preparation until the Certificate of Registration of Multi-Level Marketing Activities is issued. Our consulting services ensure professionalism, transparency, and compliance with all legal regulations.

Frequently Asked Questions About the MLM Registration Procedure

Appraisal Fee

The appraisal fee for a new MLM registration certificate is determined by the Ministry of Finance. Enterprises should consult the current schedule of administrative fees and charges or contact the National Competition Commission directly for precise information at the time of submission.

Total Completion Time

The total time to complete the MLM registration procedure depends on the enterprise’s preparation. With a complete and valid dossier, the state agency’s appraisal and licensing process takes approximately 25-35 working days. The entire process, including the enterprise’s preparation, system development, and deposit, can take 3 to 6 months.

Escrow Deposit Amount and Use

The enterprise must deposit an amount equal to 5% of its charter capital (which is a minimum of 10 billion VND), but not less than 10 billion VND, at a commercial bank operating in Vietnam. This fund is used to secure the enterprise’s obligations to participants and the state in case of disputes or violations.

Post-Licensing Reporting Obligations

The enterprise must submit periodic reports every 6 months and annually on its business activities to the National Competition Commission and the Departments of Industry and Trade in the localities where it operates. These reports include information on revenue, number of participants, and legal compliance status.

Core IT System Criteria

The IT system must manage detailed information for each participant, track orders, and calculate and pay commissions accurately and transparently. The system must also allow participants to access their personal accounts and ensure data security.

Procedure for Changes

To change significant content such as the compensation plan, rules of operation, or product catalog, the enterprise must apply for an amendment to its Certificate of Registration of Multi-Level Marketing Activities. The dossier must be submitted to the National Competition Commission for approval before implementation.

Prohibited Acts in MLM

Prohibited acts include requiring participants to make a deposit or pay a certain amount to sign a contract; providing false information about the benefits of joining the network; failing to commit to allowing participants to return goods and receive a refund; and organizing activities based on a pyramid scheme.

Specific Conditions for Foreign Enterprises

In addition to general conditions, enterprises with foreign investment or foreign ownership must have at least 3 consecutive years of MLM operational experience in another country or territory.

Verifying a Legal MLM Company

The public and partners can verify a legally operating MLM company by checking the list of enterprises that have been granted a Certificate of Registration of Multi-Level Marketing Activities, published on the official website of the National Competition Commission – Ministry of Industry and Trade.

Consequences of Unlicensed MLM Business

Conducting MLM business without a certificate is a serious legal violation. Penalties can include substantial administrative fines, disgorgement of illegal profits, and potential criminal prosecution depending on the severity of the violation.

Difference Between Legal MLM and Pyramid Schemes

In legal MLM, income is primarily derived from selling products or services. Conversely, in an illegal pyramid scheme, income is primarily generated by recruiting new members, and the products are often tokenistic or have no real value.

Conclusion

Strict adherence to the MLM registration procedure is fundamental for sustainable and lawful business growth. This article has detailed the core requirements, from establishment conditions and the legal dossier under Decree 40/2018/ND-CP to the appraisal process by the National Competition Commission. Thorough preparation not only helps in obtaining the certificate but also affirms operational transparency.

For any questions regarding the MLM registration procedure, contact Long Phan Consulting Company at hotline 1900 636389 for detailed advice and a service quote from our expert team.