MLM Companies In Vietnam Reminded To File Semi-Annual Reports.
Legal News & Analysis - Asia Pacific - Vietnam - Regulatory & Compliance
30 July, 2018
On July 18, Vietnam’s Ministry of Industry and Trade (MOIT) announced that its Competition and Consumer Protection Authority has reminded multi-level marketing (MLM) companies to fulfill their statutory reporting requirements. Specifically, under Article 49 of Decree No. 40/2018/ND-CP on Multi-Level Marketing, there is a requirement for MLM companies to submit reports every six months, using the promulgated government forms, to both the MOIT and the Department of Industry and Trade (DOIT) of the province/city in which the company is located.
MLM companies must submit the report to the MOIT in compliance with Form 15 of Decree 40, and the report to the DOIT in compliance with Form 16. The statutory reporting forms require the companies to provide information, on the national or regional level, on the network of participants in MLM activities, revenue from MLM activities, commissions paid, taxes, promotional programs, and conferences and training organized.
The reports for the first six months must be submitted by July 31 every year and the annual reports must be submitted by January 20 of the following year. A violation of the periodic reporting requirement subjects the MLM company to a monetary fine of from VND 40,000,000 to VND 60,000,000 (approximately USD 1,750 to USD 2,600), and the violating company may face compulsory confiscation of exhibits and means to commit the violations as well as the profit from the violations.
Recently, the enforcement of MLM regulations in Vietnam has been very strict. The authorities have proactively initiated investigations into violations, and have issued penalties as well as withdrawn the MLM licenses of many MLM companies in Vietnam. To avoid such complications, MLM companies would be well advised to submit their semi-annual reports before the July 31 deadline.
For further information, please contact:
Tu Ngoc Trinh, Tilleke & Gibbins