Multi Level Marketing License | MLM License • Siam Trade Development

Multi Level Marketing License – MLM License

Direct Sales and Direct Marketing activities in Thailand are strictly regulated. We can support your MLM License process to the achievement

Every activity linked to Direct Sales, Direct Marketing and Multi Level Marketing (MLM) in Thailand is strictly regulated by DSA and OCPB. In order to start a new Multi Level Marketing Project you will need to act in three steps: 1) Register your Direct Selling Company; 2) Product Registration in Thai FDA; 3) Obtain a Direct Sales License. A summary of each step is in below section.

In Thailand there are actually 35 Multi Level Marketing Companies; Cosmetics and Personal Care Products weight 27% of the market, wellness products are 39% of the total. Great part of wellness is covered by Dietary Supplements, that are normally the most problematic products for Multi Level Marketing Companies. Contact us if you are experiencing a “desperate case” of repeated rejection by Thai FDA. We’re here to support you.

Multi Level Marketing License can be obtained exclusively by opening a Thai Company

Register an MLM Company or let us hold your licenses

If you are ready to open a Thai Company, we can do it for you. As second option, we offer a service of License Holding: you will operate under our Company, that will Import, store and deliver your product, enabling you to focus on sales organization. Siam Trade Development will be your Authorized Marketing Holder and will operate on your behalf until you’re ready to open your Thai Company once market has been consolidated.

Product Registration in Thai FDA or TISI

After you have your Thai Company opened (or we become your License Holder), you will need to Register Products in Thai FDA. This shall be in two steps: 1) Register Business Place, or better Authorize the use of your or our Warehouse. 2) Register every single product and prepare its label for import.
If your product is a household or personal care, or electronic appliance, it may need the registration in TISI instead of FDA.

Obtain a Direct Sales License

Now we have your Thai Company in full operation, your products registered; we need to get a Direct Sales License in order to operate in Multi Level Marketing (LML). Process is long and subject to consideration of DSA and of Office of the Consumer Protection Board (OCPB). All the aspects of the prducts, marketing, promotion and remuneration of distributors are deeply checked in order to comply current laws.

General Guidelines on Multi Level Marketing License in Thailand

During the Project for your Multi Level Marketing Company you will need to deal with 7 different Thai authorities:

DBD for Company formation
Revenue Department for VAT registration
Thai FDA for healthcare, Dietary Supplements, Cosmetics
TISI for electronic appliances, housejold products
Office of Consumer Protection Board for the approval of your operations
Custom for product import
Department of Labour Protection and Welfare for your sales network administration

Do you think you can do-it-yourself?

What is the Multi Level Marketing License

A Multi Level Marketing License is required in case of Direct sales or Direct Marketing in Thailand.

These activities generally refers to the the selling or marketing of goods and services by independent sales agent directly to consumers at their home or workplace. In Thailand, the Direct Sales and Marketing Act of B.E. 2545 (2002) defines the terms as follows:

“Direct sales” refers to the marketing of goods or services made directly to the consumer at his or her home or workplace or any other place that is not an ordinary place of business. The business can be organized through direct sales representative or uni-level or multi-level independent distributors.
“Direct marketing” refers to the marketing of goods or services communicating directly to the consumer at a distance and expecting such consumer to respond and purchase the goods or services from the direct marketing operator.

According to the DBD, direct sales is considered Retail Sale under Section (14) of List Three of the Foreign Business Act as well as a “service” business under Section (21) of List Three of the Act, both restricted to foreigners.

Direct Marketing is considered a service business under Section (21) of List Three. Foreign owneed companies would have to apply for permission from the Director-General of the Department of Business Development. According to the Section (14), the restriction regarding retail businesses only apply to those with a minimum capital less than 100 million baht. As consequence, foreigners who shall actually use a minimum capital of at least 100 million baht to operate their business can engage in direct sales without applying for permission as described above.

Most business activities in Thailand require registrations and/or licenses; the MLM business is no exception. Multi Level Marketing Companies are obligated to register with the Consumer Protection Board through the direct-sales section of the Office of the Consumer Protection Board (OCPB).

The Office of the Consumer Protection Board (OCPB)

OCPB is the authority responsible for registration; an application by a MLM Company will undergo a thorough examination aimed at protecting consumers’ rights.

If OCPB considers an application as not compliant with the law, it will ask the applicant to amend it within a reasonable period of time. Upon resubmission of the revised application, the registrar will process the registration within 30 days if it meets all criteria.

DSA does not require that an applicant be a company formed in Thailand,but this is in practice generally preferred. DSA will also expect a company to have at least one Thai director, and if all directors are foreigners, at least one must hold a valid work permit.

The most important aspect that will be considered is the compensation or remuneration plan for distributors or representatives. The direct-sales section will deeply examine whether the plan:

Not require an independent distributor to purchase goods;
Not encourage an independent distributor to purchase goods in unreasonably large amounts; and
Clearly demonstrate remuneration payment calculations.

Calculation intervals and remuneration payments should not be less than 14 days, and an independent distributor can return any purchased products to the company within 15 days.

Multi Level Marketing Advertisement and Promotion

Advertisement is subject to control by the advertisement committee, and the direct-sales section may order the MLM company to obtain a written opinion from the advertisement committee.

Also product catalogue shall be reviewed in detail, and in case it contains any medical claims, MLM company must provide scientific test results issued by a reliable organization in support of such claims. Advertisement committee’s placeat is not free of charge, and it will delay the registration process if not properly managed.

After the registration is finished, any changes made to the documents must be submitted to the OCPB. Although the registration does not need to be renewed, the company must report its business progress to the OCPB twice in every year, in January and July.

Law and Regulation for Multilevel Marketing Companies in Thailand

Foreign Business Act, B.E. 2542 (1999)
Direct Selling and Direct Marketing Act, B.E. 2545 (2002)
Consumer Protection Act, B.E. 2522 (1979)
Cosmetic Act, B.E. 2535 (1992)
The Food Act, B.E. 2522 (1979)
Industrial Product Standards Act, B.E. 2548 (2005)
Labour Protection Act, B.E. 2541 (1998)

Summary

Service Type

Multi Level Marketing License

Provider Name

Siam Trade Development,

244/301 Ratchapruek Village, Moo 4, Tambon Phayom,Wang Noi,Phra Nakhon Si Ayutthaya-13170,
Telephone No.0830314030

Area

Thailand

Description

Multi Level Marketing License - MLM License Direct Sales and Direct Marketing activities in Thailand are strictly regulated. We can support your MLM License process to the achievement