Multi-level marketing businesses must deposit 5%, at least 10 billion VND

Multi-level marketing enterprises are responsible for opening a deposit account; the amount is equivalent to 5% of charter capital, but not less than 10 billion VND.

According to Circular 29/2018 of the State Bank of Vietnam on guidance on confirmation and management of deposits of multi-level marketing enterprises, from January 18, 2019, multi-level marketing enterprises are responsible for opening a deposit account and depositing an amount equivalent to 5% of charter capital, but not less than VND 10 billion, at a commercial bank or foreign bank branch in Vietnam.

The deposit still has interest, the interest rate is agreed upon by the enterprise and the bank, ensuring compliance with the regulations on interest rates on deposits in Vietnamese Dong of the State Bank of Vietnam in each period.

This deposit is to ensure the fulfillment of the obligations of multi-level marketing enterprises to multi-level marketing participants and the State in the prescribed cases. Specifically, upon receiving a document from the Ministry of Industry and Trade requesting the withdrawal of the enterprise's deposit to handle the cases prescribed in Clause 1, Article 53 of Decree 40/2018, the deposit-receiving bank shall withdraw the deposit for the multi-level marketing participants or according to the sanction decision of the competent authority.

The deposit is to ensure the performance of obligations of multi-level marketing enterprises towards multi-level marketing participants and the State in prescribed cases.

Clause 1, Article 53 of Decree No. 40/2018/ND-CP stipulates that the deposit is used in the following cases: A multi-level marketing enterprise terminates its multi-level marketing activities but fails to fully perform its obligations related to its multi-level marketing activities towards its multi-level marketing participants and there is a legally effective decision or judgment of a competent authority on the settlement of disputes between the multi-level marketing enterprise and its multi-level marketing participants related to those obligations; the enterprise terminates its multi-level marketing activities but fails to comply with the effective decision on sanctioning violations in its multi-level marketing activities by a competent authority.

In case the amount in the enterprise's escrow account is not enough to pay as required in the document of the Ministry of Industry and Trade, the deposit receiving bank must notify the Ministry of Industry and Trade (Department of Competition and Consumer Protection) in writing and handle the case according to the response document of the Ministry of Industry and Trade to the multi-level sales participant and the State in the prescribed cases.

Specifically, upon receiving a document from the Ministry of Industry and Trade requesting the withdrawal of a business's deposit to handle cases as prescribed in Clause 1, Article 53 of Decree 40/2018, the deposit-receiving bank shall withdraw the deposit for the multi-level sales participant or according to the sanction decision of the competent authority.