Key practical points:
• Direct selling may be conducted only by a company holding a special licence from the commerce authority.
• The company must meet high registered-capital and security-deposit requirements.
• A salesperson's reward is based only on personal sales to consumers, not on recruiting others.
• Consumers have the right to return products within a set period (a regret period).
• Recruitment- and fee-based pyramid selling is prohibited under a separate regulation.
🏢 Company setup
Regulations on the Administration of Direct Selling · Yalla China
直销管理条例 / Regulations on the Administration of Direct Selling
Enacted: 2005-08-23 ✅ Effective: 2005-12-01
📝 Overview
Regulations governing direct selling in China through salespersons who sell to consumers outside fixed retail premises. They require strict licensing and separate lawful direct selling from prohibited pyramid schemes.
This is general information only, not legal advice. For your specific case, consult a licensed lawyer.
📜 The law text / key provisions
💬 Practical reading
💬 This is a general reading/opinion for orientation — not the official legal text nor legal advice.
If someone offers you a 'direct selling opportunity', confirm the company is properly licensed and that income comes from selling real products, not from recruiting members and paying fees. A recruitment-based model is an illegal pyramid scheme. General orientation, not legal advice.
📎 Official source
gov.cn
🕒 Updated: 16 March 2026