Direct selling news,August,2   Nguyen Tan Dung, the president of Vietnam,has signed an act which related to direct selling industry. Ihe act will take effecton July 1^st,it requires that the registered capital of direct selling enterprises must reach 10 billion Vietnamese Dong(US dollars 470,000).Besides, direct selling enterprises must take 5% capital as deposit, but should not less than 5 billion Vietnamese Dong. The deposit should be put in the local Vietnam banks. Direct selling enterprises are also prohibited to sell marketingchain to other companies.This means direct selling enterprises need to invest more money and stop the recruitment of salesmen after publishing in July. Direct selling is a marketing strategy, salesman’s salary is not onlyfrom their personal selling, but also from the percentage of selling productsby recruiting salesmen. The most common is that salesmen sell products through lower-line relationship and word-of-mouth marketing.This act also strictly controls other aspects of direct selling enterprises system.Direct selling enterprises are prohibited to request salesmen pay for thedeposit or entering fee; Also enterprises cannot provide commission or bonus asreward to recruit salesmen any more.Direct selling enterprises’ requirement that salesmen cannot return thecommodity is also banned by the act.This act bans saleman to provide false information about direct sellingenterprises as well, which including company’s product information andcompany’s operation information.Direct selling enterprises will be revoked of business license after stopping operations one year. The period of validity for related license is 5 years, afterthat need to extent. Vietnam Ministry of Industry and Trade will process thislicense independently and instead of provincial Ministry Industry and Trade to dealwith related business.According to the statistics of Vietnam Ministry of Industry and Trade, fromthe first direct selling enterprise moving into Vietnam ten years ago, now hundredsof thousands of people have took part in related business in Vietnam.Direct selling enterprises have attracted many people to join in by fraudand false advertising. According to the statistics of Vietnam Ministry of Industryand Trade, among more than 60 direct selling enterprises, nearly one third over 20 have closed the registration in Vietnam, 2 have been evoked the license.(Original title: Vietnamese government tighten direct selling policy, enterprises without qualification ban to recruit salesmen)

 Executive editor: Xiao Shen