Vietnam has issued Decree 137/2026 on multi level marketing, effective from July 1, 2026. This decree replaces the previous framework on multi level marketing regulation in Vietnam.
Decree 137/2026 does not regulate only with licensing procedures. It also regulates what products may be sold, how an MLM network may grow, how businesses must manage participants, how local activities must be registered, and when regulators may terminate the right to operate an MLM business for non-compliance.
Under this new framework, Vietnam still allows MLM businesses, but the control is stricter and the conditions are more demanding. That is why the new decree will affect both current MLM model in Vietnam and anyone planning to build a network-based sales model in Vietnam.
What Has Changed Under Multi Level Marketing Regulation in Vietnam?
Under the new decree, the law now covers detailed matters such as registration, provincial activity, participant contracts, training, websites, IT systems, event notification, commission limits, return rights, and revocation of the license.
Some notable changes of multi level marketing regulation in Vietnam are as follows.
First, the law is clearer about what kind of MLM growth is not acceptable. Systems that reward recruitment too heavily and real product sales too little are more likely to be questioned.
Second, the law excludes certain products from MLM, including digital products in an MLM model in Vietnam. This is important because many modern businesses combine physical products with online content, subscriptions, or app-based features.
Third, foreign-backed MLM businesses face a stricter entry condition. This is not a sector where any foreign investor can simply set up a company and begin operations.
Fourth, local compliance is stricter. A company may hold a national license, but that does not mean it can freely organize activities in every province without following the proper local compliance procedures.
What is Multi Level Marketing?
MLM is a way of selling products through a network of participants. A participant may earn money from his or her own sales and, in some cases, from the sales made by other people in the network below them.
For compliance management in Vietnam, the legal risk comes from how the system is designed.
A lawful MLM business is supposed to be built around the sale of real goods. The authorities are likely to question a model that focuses mainly on paying people for recruiting new members, allowing one person to hold multiple positions, building rewards around network growth rather than product movement, or creating a structure where people join mainly for promised benefits rather than for real sales activity.
A company also cannot avoid the law simply by using a different name, such as an ambassador program, a referral community, a growth partner network, or a customer club. The authorities will look at how the system works in reality when assessing compliance under multi level marketing regulation in Vietnam.
Why the New Decree Matters
Many businesses focus on the many requirements involved in obtaining an MLM license.
More important questions, however, are whether the product may legally be sold through MLM, whether the compensation plan is too aggressive, whether the business depends too heavily on recruitment, whether it is ready to operate across different provinces, and whether its contracts, website, and training materials comply with the law.
In practice, these questions often matter more than the license itself. A business may succeed in obtaining a license, yet still face difficulties later if the actual structure of its operations does not match the legal requirements.
Which Products Can and Cannot Be Sold Through MLM?
The law says that MLM applies to goods. However, some categories of goods are excluded, and the decree also excludes digital content products.
If a company sells ordinary physical products, the analysis is easier to understand. But when a product combines a physical item with a paid membership, access to training videos, app features, digital coaching, or an online content library, a harder legal question arises if what the customer is really paying for.
If the real value lies in digital content, then the MLM structure may face a direct challenge under the new decree. This is why businesses using hybrid models should review their product structure carefully before moving forward.
What Kind of MLM Conduct Is Now More Clearly Risky?
Under multi level marketing regulation in Vietnam, MLM businesses must be built around the sale of goods, not recruitment incentives.
From the authorities’ perspective, a model becomes risky when it focuses on bringing in new participants, building layers in the network, maintaining multiple positions, or earning repeated benefits from the same conduct rather than from genuine product sales.
This point is very important for management.
It is normal for many business leaders to focus on growth and distributor motivation. The difficulty is that, in an MLM business, the wrong reward structure can quickly create legal risk.
As part of an ongoing compliance review, the company needs to keep asking whether people are making money because products are actually being sold, or mainly because more people are joining the network. If the answer is moving toward the second, that is the point at which the company needs to pay close attention to the legal risks it may face.
The Law Now Looks More Closely at How the Business Operates After Launch
One major difference in the new decree is that it introduces more detailed conditions and compliance procedures for how an MLM company actually operates.
The rules now cover participant contracts, internal operating rules, compensation plans, training programs, websites, IT systems, and local activities.
Under this framework, the government is not only checking whether an MLM company looks compliant on paper. It is also examining whether the company can operate in compliance with the law in practice.
That means the company must have proper participant documentation, lawful training content, controlled messaging at seminars, accurate website disclosures, a reliable system for tracking the network, a clear basis for calculating commissions, and evidence of compliance in each province where it operates.
Licensing and Operational Compliance Are Both Important
The new multi level marketing regulation in Vietnam highlight that an MLM company must not only obtain the proper license, but also remain compliant throughout its operations.
This operational compliance includes having a participant contract, operating rules, a compensation plan, a training program, an IT system to manage participant data and network information, and a website with the required information.
In other words, a license alone is not enough. The business must also be able to show that its actual operations remain aligned with the law.
Foreign Investors Need to Pay Attention
The law allows foreign investment in the MLM sector, but on stricter conditions than before.
The decree requires any foreign investor or foreign-invested organization involved in an MLM business to have at least three consecutive years of actual MLM operating experience in another country or territory.
That is why multi level marketing regulation in Vietnam should be considered early in strategic planning, ownership design, and market-entry strategy.
A foreign investor should not assume that capital and a local company are enough. The operating background behind the investment also matters.
Provincial Registration Is Required
If an MLM business operates in a province, organizes an event there, or has participant-related activity there, provincial compliance may be required. In some cases, a local contact point is also needed.
This means expansion now requires more careful planning to ensure there is proper local registration and, where required, a suitable local contact point.
For many businesses, this is a practical issue. A company may grow quickly from the ground up, but local activity should not outpace local compliance.
Why Training, Website Content, and IT Systems Are Important
Under the new multi level marketing regulation in Vietnam, training, website content, and IT systems are no longer secondary matters. They are important parts of the MLM operating system because they help demonstrate how the business actually works in practice.
All key materials should be aligned. The participant contract, training content, internal policies, seminar presentations, website disclosures, and IT systems should all reflect the same compliant structure. The IT system should also maintain proper records of participant data, commissions, and network structure.
This is important because regulators may look not only at formal legal documents, but also at the tools and materials the business uses in real operations.
Financial Rules Are a Decisive Part of the Whole Business Plan
The decree makes clear that financial controls can directly affect how an MLM business is designed.
These include an escrow deposit requirement, a cap on commissions and other economic benefits, and a rule requiring part of the company’s sales to come from customers who are not participants in the MLM network.
For that reason, multi level marketing regulation in Vietnam affects more than legal documents. It can influence pricing, compensation design, distributor incentives, sales strategy, and working capital planning.
This is one reason why financial review should be part of the compliance review from the beginning.
Participant Rights Are Now Better Protected
The multi level marketing regulation in Vietnam includes rules protecting participants, including contract requirements, return rights, payment procedures, and termination rights.
This strengthens participant protection and helps support the long-term sustainability of the MLM system.
In particular, an MLM company must be able to manage product returns, commission disputes, and contract termination in a proper and lawful way. If these matters are handled poorly, both legal and reputational problems may follow.
Events and Seminars Now Require Advance Notification
The law regulates certain conferences, seminars, and training sessions at the local level and may require advance notification.
This creates an additional compliance checkpoint where the authorities may monitor whether product claims are exaggerated, income expectations are overstated, recruitment pressure becomes excessive, or field teams make promises that go beyond what the law allows.
This is another area where legal documents and field operations must remain aligned, so that the MLM model is both properly structured and properly implemented.
What About Existing MLM Businesses?
Businesses already operating under the old rules should move promptly to review and adapt their structure to the new requirements.
Although the decree includes transitional provisions, these should not be treated as a reason to delay. Existing businesses still need to compare their current structure with the new framework and make the necessary changes within the applicable transition period.
For existing businesses, the more useful question is not whether they can continue for now, but whether their current model would still be built the same way under the new decree.
Step-by-Step Guide on How to Review an MLM Business in Vietnam
Below is a simple step-by-step guide for businesses dealing with multi level marketing regulation in Vietnam.
Step 1: Check what you are really selling
Review whether the real value of the business lies in goods, or in digital content, subscriptions, app access, or membership benefits. If that point is unclear, it should be clarified before moving forward.
Step 2: Check how people earn money in the system
Review whether participants are mainly rewarded for selling products or for bringing in new participants. If recruitment is driving the reward structure, the model may carry a higher legal risk.
Step 3: Check whether your business is really MLM
Do not rely only on branding terms such as “referral” or “ambassador.” Look at the actual structure of the business. If it operates like MLM, the law may treat it as MLM.
Step 4: Check whether you are ready for registration
Make sure the business has the required documents, systems, and internal materials. A licence alone is not enough. The actual operation of the business must also comply with the legal requirements.
Step 5: Review your contracts, training, and website
Make sure your contracts, presentations, training materials, and website content all support the same compliant structure.
Step 6: Review the IT system
The company should be able to manage participant information, track the network properly, and maintain the level of transparency required by law.
Step 7: Check foreign investor eligibility early
If foreign investors are involved, confirm at an early stage that the required experience condition is satisfied.
Step 8: Prepare for compliance in each province where activity may take place
If seminars, recruitment campaigns, or other business activities may take place in different provinces, make sure the necessary local compliance steps are completed in advance.
Step 9: Control events and field messaging
Review how seminars, workshops, and training sessions are managed. Field teams should communicate in a way that is consistent with the law and with the company’s official documents.
Step 10: Review the business regularly
Treat compliance as an ongoing process. The business should be reviewed regularly as products, sales strategies, and network activities change.
FAQ on Multi Level Marketing Regulation in Vietnam
Q: Is MLM still legal in Vietnam?
A: Yes. MLM is legal in Vietnam, but only within the limits set by the new decree. The main issue is whether the business model fits those limits.
Q: What is the biggest practical change in the new decree?
A: The biggest change is that multi level marketing regulation in Vietnam now looks more closely at the whole business, not only the registration file. Operations, local activity, training, disclosures, and enforcement all matter more.
Q: Can digital products be sold through MLM in Vietnam?
A: The decree excludes digital content products. Businesses with content-heavy or hybrid models should therefore review their structure very carefully.
Q: Do foreign investors face stricter conditions?
A: Yes. Foreign-backed MLM businesses face an operating experience condition. This can become a real entry barrier for some groups.
Q: Why is provincial registration so important?
A: Because business activity in a province can create legal risk even if the company already has national approval. Local steps still matter.
Q: Why do training and website content matter?
A: Because they show how the business actually works in real life. Regulators may pay close attention to what participants are told, not only to what the contract says.
Q: What is the real risk if the structure is wrong?
A: The business may face licensing problems, complaints, local restrictions, enforcement action, or difficulty continuing operations as it grows.
Reviewed by Thanh Tâm
on
tháng 4 13, 2026
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