On 7 April 2026, the Government issued Decree No. 137/2026/ND-CP governing multi-level marketing (“Decree 137”). Effective from 1 July 2026, Decree 137 replaces Decree No. 40/2018/ND-CP (“Decree 40”) and simultaneously repeals Article 25 of Decree No. 55/2024/ND-CP, as well as Article 48 and Appendix XIV of Decree No. 146/2025/ND-CP.

Key Highlights

• Introduction of an escrow mechanism requiring a deposit equal to 5% of charter capital, subject to a minimum amount of VND 20 billion (effectively implying a minimum charter capital of VND 400 billion);
• Provincial People’s Committee confirmation required before commencing MLM operations in a locality;
• Foreign investors must possess at least three years of MLM experience when participating at the establishment stage;
• Reduction of administrative procedures and reporting obligations to the Ministry of Industry and Trade.

Key Changes

Minimum Charter Capital and Escrow Requirements

One notable change is the removal of the minimum charter capital requirement of VND 10 billion previously applicable to MLM enterprises under Decree 40. Instead, Decree 137 requires that:

(i) an enterprise must maintain an escrow deposit with a commercial bank or foreign bank branch equal to 5% of its charter capital, but not less than VND 20 billion; and

(ii) such escrow amount must be maintained in a blocked account throughout the enterprise’s operational period.

This requirement indirectly establishes an effective minimum charter capital threshold of approximately VND 400 billion for enterprises engaging in MLM activities. The mechanism may be viewed as a market-screening measure designed to discourage undercapitalized businesses from entering and subsequently exiting the market, thereby reducing risks to participants. However, it may also create significant barriers to entry for small and medium-sized enterprises.

Confirmation of MLM Operation Registration

Under Decree 137, before conducting MLM activities in a particular locality, an enterprise must obtain a written confirmation of MLM operation registration from the competent Provincial People’s Committee.

Following the issuance of such confirmation, the enterprise must complete registration procedures with the Provincial People’s Committee in the following circumstances:

• Establishing its head office, branch, representative office, or business location in the locality;
• Organizing MLM-related conferences, seminars, or training activities; or
• Recruiting MLM participants residing in the locality and carrying out MLM marketing and sales activities within that jurisdiction.

Eligibility Requirements for Foreign Investors

Decree 137 requires that a foreign investor or a foreign-invested enterprise participating in an MLM enterprise as a member, shareholder, or owner must possess at least three years of MLM operating experience in order for the enterprise to be granted an MLM Operation Registration Certificate.

Notably, this requirement does not apply where foreign investors acquire shares or capital contributions after the enterprise has already obtained its MLM Operation Registration Certificate. Furthermore, Decree 137 does not require amendments to the MLM Operation Registration Certificate upon the admission of foreign investors after licensing. Consequently, enterprises may have greater flexibility in expanding their ownership structure and attracting foreign capital without additional licensing procedures.

Streamlining Administrative Procedures

Decree 137 seeks to improve administrative efficiency through several measures, including:

• Allowing enterprises to publicly update changes to their MLM product lists on their websites instead of submitting change notifications to the Ministry of Industry and Trade;
• Removing the legal knowledge certification requirement for MLM trainers; and
• Reducing reporting obligations to the Ministry of Industry and Trade to once annually while abolishing periodic reporting requirements to provincial Departments of Industry and Trade.

Transitional Provisions

Decree 137 provides a 12-month transitional period for enterprises to satisfy the new MLM operating requirements and complete procedures for approval of training programs by Provincial People’s Committees.

For enterprises that have already obtained an MLM Operation Registration Certificate under Decree 40, the escrow amount will continue to be maintained at 5% of charter capital, subject to a minimum of VND 10 billion, rather than being increased to the new minimum threshold of VND 20 billion.

How VCI Legal Can Assist

VCI Legal’s Regulatory and Compliance Team is offering comprehensive support services to assist businesses in complying with the new MLM regulatory framework, including:

• Advising on charter capital requirements, escrow obligations, and Provincial People’s Committee confirmation procedures;
• Assisting with the preparation, review, and submission of MLM registration dossiers;
• Assessing foreign investor eligibility and designing appropriate ownership structures;
• Developing and obtaining approval for training programs, as well as establishing reporting and disclosure systems; and
• Providing end-to-end legal support throughout the transitional period to mitigate regulatory risks and streamline compliance processes.

About VCI Legal: 

VCI Legal is an award-winning business law firm in Vietnam with a wide range of legal and corporate services, among other things, corporate, banking & finance, tax, labor & HR, real estate and dispute resolution with special focus on international investment disputes, We also offer our specialized type of service called “In-House Counsel Service” with the aim of assisting our clients in dealing with all types of internal and external issues arising from their day-to-day operations and business activities. With our offices in both Hanoi and Ho Chi Minh City, we have a tremendous depth of experience in providing well-reasoned and comprehensive legal advice to not only multinationals and Fortune 500 companies, but also small and medium enterprises. 

Our professional team comprises one of the leading law firms in Vietnam with service quality highly recommended and acknowledged by international legal service reviewers such as: The Legal 500, AsiaLaw Profiles, IFLR, KPMG’s Tax Directors’ Handbook, Acquisition International, ACQ Global, Global Law Experts, Finance Monthly, and Chambers & Partners. 

For many years, VCI Legal has been ranked among the top law firms in Vietnam for corporate, finance, insurance, taxation, employment, intellectual property and investment. With a “Can Do Attitude” combined with a “Know How” capacity, our firm is big enough to provide comprehensive legal support for any in-house legal matters, yet small enough to care about each of our clients. We undertake each engagement with the mindset of a long-term relationship, with the will to give whatever it takes to understand and fulfill your needs. 

Ho Chi Minh City 

Suite P7-42.18, Vinhomes Central Park, 720A Dien Bien Phu, Thanh My Tay Ward, Ho Chi Minh City, Vietnam 

Tel.: (+84) 028 3827 2029 Fax: (+84) 028 3823 4436 

Hanoi 

Suite 1903, Floor 19, W1 Tower, Vinhomes Westpoint, Pham Hung, Tu Liem Ward, Hanoi City, Vietnam 

Tel.: (+84) 024 3936 4985 – (+84) 024 3936 4987 

Affiliated Offices: Beijing – Shanghai – Hanoi – Ho Chi Minh City – Singapore – New Delhi – Dubai – Doha – Zurich – Paris – Rome – Brescia – Washington D.C. – Los Angeles