On July 1, 2026, a new regulation will come into effect in Vietnam that prohibits public officials from participating in multi-level marketing (MLM) activities. This is outlined in Decree 173/2026, which introduces several new rules aimed at regulating MLM operations more effectively.

The decree specifies that MLM companies are not allowed to sign contracts with certain groups, including individuals currently serving prison sentences or those with prior convictions related to the production or sale of counterfeit goods, fraud, or violations of consumer protection laws. Additionally, foreign nationals without valid work permits in Vietnam are also restricted from engaging in MLM activities, except under specific exemptions.

Moreover, individuals who have previously faced penalties for violating consumer protection regulations or MLM laws are also barred from participating until their penalties have expired. The decree explicitly states that public officials, military personnel, and law enforcement officers are prohibited from signing contracts with MLM companies.

In conjunction with tightening restrictions on who can participate in MLM, Decree 173/2026 aims to enhance the legal framework governing this type of business. Recently, many MLM companies have had their operating licenses revoked due to non-compliance with regulations.

The decree also addresses the prohibition of deceptive MLM models that primarily reward recruitment of new participants rather than actual sales, and it sets higher operational standards for MLM companies. These companies will be required to implement an information technology system to manage their networks, establish clear contracts, operational rules, reward plans, and transparent training programs.

Notably, the decree promotes the use of electronic administrative procedures, allowing for online application submissions, digital signatures, and electronic results delivery, which will help reduce compliance time and costs for businesses. Additionally, it enhances local management of MLM activities through a registration confirmation mechanism, clarifying the responsibilities of businesses and local authorities while also detailing circumstances under which operating licenses may be revoked.