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Direct Sale

 

As a general rule, multi-level marketing (“MLM”), or direct selling operations has been prohibited in China—much to the chagrin of MLM companies who are anxious to enter the Chinese market. MLM companies have been trying to find ways around China’s prohibitions, or have been developing other methods to take their products to China through retail operations. It was not until August 23, 2005 that the State Council promulgated rules that dealt specifically with direct sale operation- Administration of Direct Sales (entered into effect on 1 December 2005) and the Regulations for the Prohibition of Pyramid Sales (entered into effect on 1 November 2005). It now appears that the Chinese objections to direct selling operations are beginning to fade, and the door to China is beginning to open, ever so slightly. The prohibitions are not yet gone, and when direct selling is allowed, it will only be permitted under the most stringent requirements, in order to ensure the operations are not pyramid schemes or fly-by-night operations.

For more information, we invite you to view our overview of Direct Selling in China, available here.

The Direct Sales Regulations limit direct selling to cosmetics, health food, sanitary products, body-building equipment and kitchen utensils. And the Regulations require Chinese or foreign companies (“FIEs”) who intend to engage into direct sale business in mainland China to apply for and obtain direct selling license from the Ministry of Commerce (“MOFCOM”). Until now, there are 43 companies, including domestic and foreign companies, have obtained the direct selling license (please refer to the following chart for reference.).

 

No

Name

Direct Sale Area

Products

Date
(MM-DD-YY)

1

KANGMEI PHARMACEUTICAL CO.LTD
康美药业股份有限公司

Rongcheng District and Puning of Jieyang of Guangdong Province

Nutrition Products

10-18-2013

Ideality Technology Group Co., Ltd.
理想科技集团有限公司

Five districts of Kunming, Yunnan Province, including: Wuhua District, Panlong District, Guandu District, Xishan District, Chenggong District

Cosmetics and Cleaning Products

12-13-2013

CNI CHINA CO.LTD
长青(中国)日用品有限公司

11 districts of Qingdao, Shandong Province, including, Shixia District, Shinan District, Shibei District, Huangdao District, Laoshan District, Licang District, Chengyang District, Jiaozhou, Jimo, Pingdu, Laixi

Nutrition Products

10-08-2013

4

JIU JI BIOTECH,LTD
广东九极生物科技有限公司

Guangzhou, Foshan, Maoming, Zhaoqing

Nutrition Products

07-23-2013

QuanJian Nature Medicine Technology DevelopmentCo., Ltd.
权健自然医学科技发展有限公司

Seven districts of Tianjin, such as Heping District, Hedong District, Hexi District etc.

Cosmetics

10-02-2013

VIGOR TECHNOLOGY GROUP
深圳市荣格科技有限公司

Eight districts of Shenzhen, such as Luohu District, Futian District, Nanshan District etc.

Cosmetics and Nutrition Products

03-14-2013

Tenfu Tenmax
天福天美仕(厦门)生物科技有限公司

Six districts of Xiamen, such as Siming District, Haicang District, Huli District etc.

Cosmetics

12-19-2-12

SYNSUN HEALTH INDUSTRY CO., LTS
圣原健康产业有限公司

Three districts of Zhuhai, Guangdong Province, including Xiangzhou District, Doumen District, Jjinwan District

Cosmetics

12-19-2012

Tianjin Kangting Biotechnology Co., Ltd
天津市康婷生物工程有限公司

Six districts of Tianjin, such as Heping District, Hedong District, Nankai District etc.

Cosmetics

03-14-2-13

10 

Shanghai Spring Town biological product Co., Ltd.上海春芝堂生物制品有限公司

Sixteen districts of Shanghai, such as Huangpu District, Xuhui District, Changning District etc.

Nutrition Products

01-05-2013

11 

Jilin Merro International Biotechnology Incorporated Company
吉林省美罗国际生物科技股份有限公司

Four cities of Jilin Province, including Changchun, Liaoyuan, Baishan and Yanbian

Nutrition Products

12-19-2013

12 

DONGSHENGALBERT CHAN Biological Engineering Group, Ltd
吉林东升伟业生物工程集团有限公司

Seven cities of Jilin Province, such as Changchun, Siping, Liaoyuan, Tonghua etc.

Nutrition Products

08-24-2012

13 

Anran Nanometer Industrial Development Co.,LTD
山东安然纳米实业发展有限公司

Five districts of Weihan, Shandong Province, such as Huancui District, Rongcheng, Rushan etc.

Cosmetics, Cleaning products, kitchen wares

01-09-2012

14 

Hunan Yandi Biotechnology Co., Ltd.
湖南炎帝生物工程有限公司

Eight provinces, such as Shanxi, Liaoning, Zhejiang etc.

Nutrition Products, Cleaning Products

12-26-2-11

15 

AMORE Cosmetics (Shanghai) Co., Ltd.
爱茉莉化妆品(上海)有限公司

Ten districts of Shanghai, such as Huangpu District, Xuhui Distirct, Jingan District etc.

Cosmetics

07-11-2011

16 

Xiamen Golden Sun Pharmaceutical Co., Ltd
厦门金日制药有限公司

Six districts of Xiamen, such as Siming District, Haicang District, Huli District, etc.

Nutrition Products

02-16-2012

17 

Tianjin TIENS Biotechnology Co., Ltd.
天津天狮生物工程集团有限公司

Sixteen provinces such as Bejing, Tianjin, Hebei, Shanghai, etc.

Nutrition Products, Cosmetics, and Cleaning Products

03-11-2011

18 

RESGREEN Biotechnology Group Co., Ltd.
绿之韵生物工程集团有限公司

Seven provinces, such as Hebei, Liaoning, Jilin, etc.

Nutrition Products, Cosmetics, and Cleaning Products

09-15-2010

19 

BabyCare Co., Ltd.葆婴有限公司

Four provinces, including Beijing, Tianjin, Jiangsu and Shanxi.

Nutrition Products

07-07-2010

20 

Jiangsu LONGLIQI Bioscience Incorporated Company
江苏隆力奇生物科技股份有限公司

Jiangsu Province and Yunnan Province

Nutrition Products, Cosmetics, and Cleaning Products

07-23-2009

21 

Kelti (China) Daily necessities Co., Ltd.
克缇(中国)日用品有限公司

Twenty-two provinces, such as Beijing, Tianjin, Shanxi, Shanghai etc.

Kitchen wares, Cosmetics, Cleaning Products, Nutrition Products and Health Care Equipment

02-06-2009

22 

Harbin Pharmaceutical Group Co., Ltd.
哈药集团股份有限公司

Thirteen cities of Heilongjiang Province, such as Haerbin, Jixi and Qiqihaer etc.

Nutrition Products and Cosmetics

11-25-2008

23 

Jiangsu Alphay Biotechnology Co., Ltd.
江苏安惠生物科技有限公司

Three provinces, Jiangsu, Zhejiang and Shandong

Nutrition Products, Cosmetics, Health Care Equipment and Cleaning Products

11-13-2008

24 

Shaklee (China) Daily necessities Co., Ltd.
嘉康利(中国)日用品有限公司

Beijing and Guangdong Province

Nutrition Products, Cosmetics and Cleaning Products

03-23-2007

25 

Tianjin Sun Hope Health care products Co., Ltd.
天津尚赫保健用品有限公司

Five provinces, including Tianjin, Hebei, Inner Mongolia, Jiangsu and Shanxi.

Nutrition Products, Cosmetics, Health Care Equipment and Cleaning Products

05-24-2007

26 

Melameuca (China) Daily necessities Co., Ltd.
美乐家(中国)日用品有限公司

Six provinces, Beijng, Tianjin, Liaoning Province, Shanghai, Fujian Province, Guangdong Province and Chongqing

Cleaning Products and Cosmetics

05-24-2007

27 

Guangdong Apollo Group Co., Ltd.
广东太阳神集团有限公司

Three cities including Hefei, Jinan and Dongguan

Nutrition Products

02-08-2007

28 

Beijing ROLMEX Technology Co., Ltd.
北京罗麦科技有限公司

Fifteen cities in three provinces ( Liaoning Province, Heilongjiang Province and Shandong Province), such as Shenyang, Haerbin and Jinan etc.

Kitchen Wares, Cleaning Products, Cosmetics and Nutrition Products

03-19-2007

29 

Mary Kay (China) Cosmetics Co., Ltd.玫琳凯(中国)化妆品有限公司

Thirty-four provinces, almost all the provinces of China

Cosmetics

12-01-2006

30 

INFINITUS (China) Co., Ltd.
无限极(中国)有限公司

Twenty-one provinces, most of the Mainland China, such as Beijing, Hebei, Inner Mongolia etc.

Nutrition Products, Cosmetics, Health care Equipment and Cleaning Products

03-02-2007

31 

Perfect (China) Co., Ltd.
完美(中国)有限公司

Eight provinces, such as Beijng, Hebei, Shanghai, Jiangsu etc.

Nutrition Products, Cosmetics and Cleaning Products

12-01-2006

32 

HERBALIFE (China) Health care products Co., Ltd.
康宝莱(中国)保健品有限公司

Twenty-four provinces, most of China’s provinces, such as Beijing, Tianjin, Liaoning, Shanghai etc.

Nutrition Products and Cosmetics

03-23-2007

33 

Kangli pharmaceuticals Co., LTD.
广东康力医药有限公司

Six districts of Shenzhen, such as Luohu District, Futian District and Nanshan District, etc.

Nutrition Products

01-08-2007

34 

Oriflame Cosmetics (China) Co., Ltd.
欧瑞莲化妆品(中国)有限公司

Eight provinces, such as, Beijing, Inner Mongolia, Jiangsu Province etc.

Nutrition Products and Cosmetics

09-19-2006

35 

Amway China Daily necessities Co., Ltd.
安利(中国)日用品有限公司

Thirty-four provinces, almost all of China

Kitchen Wares, Cosmetics, Cleaning Products, Nutrition Products and Health Care Equipment

12-01-2006

36 

Nanjing Joymain Science and Technology Development Co., Ltd.
南京中脉科技发展有限公司

Three provinces, Liaoning, Jiangsu and Zhejiang

Nutrition Products, Cosmetics and Health Care Equipment

08-18-2006

37 

Kasly Ju (Tianjin) Co., Ltd.
金士力佳友(天津)有限公司

Three provinces, including Beijing, Tianjin and Liaoning

Nutrition Products and Cosmetics

10-27-2006

38 

Foryou Healthware Technology Co., Ltd.
富迪健康科技有限公司

Shanghai and Sichuan Province

Cosmetics and Health Care Equipment

11-01-2006

39 

Pro- Health (China) Co., Ltd.
宝健(中国)日用品有限公司

Fifteen provinces, such as Beijing, Tianjin, Inner Mongolia, Shanxi etc.

Nutrition Products and Cosmetics

07-22-2006

40 

New Era Health Industry (Group) Co., Ltd.
新时代健康产业(集团)有限公司

Twenty provinces, such as Beijng, Inner Mongolia, Jilin etc.

Nutrition Products, Cosmetics and Cleaning Products

08-25-2006

41 

YOFOTO (China) Health Industry Co., Ltd.
三生(中国)健康产业有限公司

Four cities, including Beijng, Tianjin, Shenyang  and Ningbo

Nutrition Products and Cosmetics

08-18-2006

42 

NU SKIN (China)如新(中国)日用保健品有限公司

Nineteen provinces, such as Beijng, Tianjin, Guangdong, Sichuan, Shanxi etc.

Nutrition Products, Cosmetics and Health Care Equipment

07-22-2006

43 

AVON (China) Co., Ltd.
雅芳(中国)有限公司

Thirty-two provinces, almost all of China’s provinces such as Beijing, Tianjin, Shanghai, Chongqing, Guangdong, Shandong etc.

Nutrition Products, Cosmetics and Health Care Equipment

02-22-2006

Lehman, Lee & Xu, who is recognized in China as a leader in the area of direct sale regulations, has years of extensive experience in dealing with domestic or foreign clients’ diverse corporate and commercial needs in China. Our direct sale lawyers provide legal and business advice covering all aspect of direct sale regulations, from advising on a new start up direct sale company to an established company that wants to expand its direct sale system and as well as direct sale operation model compliance. We have been engaged by, both past and present, numerous worldwide leading direct sale companies, such as Avon, Amway, Weightwatchers and Melaleuca as their local counsel to meet their legal needs in China.

For more information on how Lehman, Lee & Xu can assist with your legal needs in direct sale, please contact us at: mail@lehmanlaw.com.

 

 

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