Photo: Viet Tuan
Agents and business partners now have only 30 days to request that government agency address their rights relating to commissions and salaries and even compensation.
Two multi-level marketing (MLM) companies - the Zija Co. and the Gano Excel Vietnam Company - have decided to suspend their operations, according to the Vietnam Competition Authority (VCA) under the Ministry of Industry and Trade (MoIT).
Enterprises can suspend their operations for a maximum of 12 months. Beyond this time their business certificate will be withdrawn, under Decree No. 42 on MLM activities.
Zija’s has suspended its operations from July 1 to June 30, 2017 as it must reorganize its company structure and human resources. It is located at 17 Thuy Khue Street in Hanoi’s Tay Ho district but has a sales point on the 22nd floor of the Icon 4 building in De La Thanh Street, Ba Dinh district.
Gano has suspended its operations from July 17 to January 1, 2017, as it must resolve issues relating to office rentals.
Decree No. 42 stipulates that, despite suspending operations, MLM enterprises must still protect the rights of its agents under Vietnamese law.
It is recommended that individuals involved in the MLM business be fully conversant with official information from VCA to protect their rights.
Agents and business partners have only 30 days from the announcement of suspended operations to send a request to VCA to address their rights relating to commissions and salaries and even compensation. If no one does so, the companies will be recognized as having completed all their responsibilities.
In June, VCA requested that all MLM companies submit reports before July 15 on their business activities in the first half of this year. Reports are to include MLM sales, the number of MLM products, the number of MLM agents, and the commissions, bonuses and economic benefits paid to agents. Enterprises must also submit audited financial reports for 2015 and information on tax payments in 2015 and the first half of this year.
Since the beginning of the year many MLM companies have been inspected, with some being fined or shut down. On June 14 VCA named four MLM companies and their business violations. Unicity Marketing Vietnam was fined VND130 million ($5,829) for not completing procedures to update its business license after adjusting its business activities, conducting business in cities and provinces where it doesn’t have an office while not informing the local departments of industry and trade, and not training or not fully training agents.
In April, Hanoi’s Department of Industry and Trade requested the closure of eight MLM companies. Their business licenses had expired but they had not ceased conducting business.