MLM Law in Bangladesh 2026: Licensing, the Pyramid Ban, Ponzi Cases and Victims’ Remedies

MLM law Bangladesh in 2026: licence or liability

MLM law Bangladesh enforces turns on one blunt rule: a multi-level marketing business may operate only under a government licence, and a scheme that pays people mainly for recruiting other people is banned outright. That rule exists because Bangladesh learned the cost of unregulated network selling the hard way. Destiny 2000, Jubok and, a decade later, the e-commerce collapses of 2021 took deposits and advance payments from millions of ordinary people, and much of that money has still not come back.

This guide explains how the Multi-Level Marketing Activities (Control) Act 2013 works in practice, who licenses MLM companies, what the pyramid ban catches, the penalties, and how the Destiny, Jubok, Evaly and e-Orange cases have actually ended as of October 2026. It then sets out the digital commerce rules that ban MLM on online platforms, the 2025 and 2026 reform proposals, the remedies open to victims, and the steps a genuine direct selling business needs to take to stay on the right side of the line.

Summary: Bangladesh regulates multi-level marketing through the Multi-Level Marketing Activities (Control) Act 2013. No one may run an MLM business without a licence, the Registrar of Joint Stock Companies and Firms acts as the licensing body, and pyramid schemes are prohibited. Online platforms are separately barred from MLM and network selling by the Digital Commerce Operation Guidelines 2021. Victims can complain to the consumer directorate, file criminal cases for cheating and breach of trust, press money laundering investigations and sue for recovery, but recovery of the money itself remains slow and partial.

Key point: A licence under the MLM Act is not a safe harbour. A 2023 intelligence report found irregularities in eight of ten MLM and similar companies examined, including licensed ones, and noted that collapsed schemes were reappearing as cooperatives, micro-credit societies and distribution businesses. Investors and distributors should test the business model, not just the paperwork.

At a glance

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Table of Contents

What MLM law Bangladesh regulates: the 2013 Act

Multi-level marketing is a sales model in which participants earn not only from their own sales but also from the sales made by people they recruit, arranged in two or more levels. Bangladesh did not ban the model. It chose to license it, and to criminalise the versions of it that function as fundraising schemes rather than sales businesses.

How the Act defines multi-level marketing

Section 2(8) of the Multi-Level Marketing Activities (Control) Act 2013 describes MLM as marketing of products or services through two or more levels, under a plan that pays commissions, dividends or other benefits.[3] The definition is wide. A distributor network with a referral bonus, an app that pays users for signing up others, or a "membership" scheme with tiered rewards can each fall inside it, whatever the business calls itself. Under MLM law Bangladesh courts and regulators apply, labels such as "network marketing", "affiliate programme", "community commerce" or "cooperative" do not take a recruitment-based reward plan outside the Act.

The licence requirement

Section 4 of the MLM Act is the centre of the regime: no company may carry on MLM business without a licence.[3] When the bill was placed in Parliament in September 2013, it provided that an applicant must be a company formed under the Companies Act 1994, that a licence would be valid for one year and renewable annually, and that a licence could not be transferred without prior government approval.[1] In practice this means a foreign brand cannot simply appoint distributors and start recruiting; it needs a locally incorporated company holding its own licence.

Who is the licensing authority?

The question is often answered loosely as "the commerce ministry". The more precise answer is that licences are processed and issued through the Registrar of Joint Stock Companies and Firms (RJSC), which sits under the Ministry of Commerce. Official reporting identifies RJSC as the licensing body for MLM companies such as World Mission 21 and Magnessa Bangladesh.[2] The same report shows that some firms operating MLM models held only city corporation trade licences, which are not MLM licences at all.[2] A trade licence, a company registration certificate or a cooperative registration is not a substitute for an MLM licence. See our guide to company registration in Bangladesh for the incorporation step that comes first.

Permitted products

The Act limits MLM to defined categories of real consumable goods and services.[3] The bill listed household goods, electrical and electronic products, home appliances, cosmetics and toiletries, herbal products, telecom services, training-related products and services, and agricultural products.[1] Land, apartments, tree plantations, savings plans and investment "units" sit outside this logic, which is precisely why so many collapsed schemes used them. Rules made under the Act fill in the application forms, documents and procedural detail; any applicant should obtain the current text from RJSC rather than relying on summaries.

The pyramid ban and other prohibited practices

The most important substantive protection in MLM law Bangladesh applies is the ban on pyramid schemes. A licence under the MLM Act does not authorise a pyramid; it is unlawful whoever runs it.

Section 15: pyramid and pyramid-like schemes

Section 15 of the MLM Act prohibits pyramid schemes and similar pyramid-based business structures, including arrangements that depend on products that are not real or that are to be produced only in future cycles.[3] The bill described a pyramid as a scheme that rewards participants mainly for recruiting others rather than for genuine sales of products or services to the public.[1] The test is economic, not formal. If most of a participant's expected income comes from the joining fees or purchases of those below them, rather than from retail sales to real customers, the scheme is on the wrong side of the line.

Products must exist and be visible

Section 21 of the MLM Act requires each product or service to have a real, visible presence.[3] This matters because the classic Bangladeshi fraud pattern was to sell something that did not exist yet: trees still to be planted, plots still to be bought, motorbikes still to be imported. Selling non-existent products was singled out in the bill for one of the heavier penalties.[1]

The Ponzi gap

The Act does not expressly define or ban Ponzi schemes, and it does not set out a dedicated mechanism for victims to recover their money.[3] A Ponzi scheme pays earlier investors out of later investors' money and needs no recruitment structure at all, so a pure "invest Tk 1 lakh and double it in 24 months" scheme may be prosecuted mainly under the Penal Code and the money laundering law rather than the MLM Act. That is why the remedies discussed below rely on several statutes at once.

Penalties and enforcement powers

The penalty structure is graded by seriousness. As tabled in Parliament, the bill provided for up to ten years' imprisonment and a fine of up to Tk 50 lakh for running an MLM business without a licence; up to five years and Tk 20 lakh for selling non-existent products; up to three years and Tk 5 lakh for selling above the price printed on packaging; up to two years and Tk 5 lakh for transferring a licence without approval; and up to two years and Tk 2 lakh for packaging failures, with double punishment for repeat offences.[1] Section 26 attaches a fine of up to Tk 50 lakh to breaches of the pyramid ban in section 15.[3]

Why the fine ceiling matters

A fixed Tk 50 lakh ceiling is small against schemes that collected thousands of crores. Commentators have argued for fines linked to the amount collected rather than a fixed cap.[3] In the large cases, prosecutors have therefore leaned on money laundering and embezzlement charges rather than on the MLM Act alone, as the Destiny and e-Orange prosecutions show.[4] [8] Our analysis of anti-money laundering law in Bangladesh covers freezing, attachment and confiscation in detail.

Administrative powers

The bill also gave the government power to conduct administrative investigations and to appoint administrators to run troubled MLM companies.[1] In principle, an administrator is the tool that should turn frozen assets into refunds. In practice, as the Jubok saga shows, the absence of a willing and empowered administrator is where victims' hopes have repeatedly stalled.[6]

Enforcement reality

The 2023 intelligence report summarised by the Financial Express found that eight of ten MLM and similar companies examined had irregularities, named licensed firms alleged to be in breach of the MLM Act and the Cooperative Societies Act 2001, and observed that victims of Destiny, Jubok, Unipay-2U and similar schemes had received no restitution.[2] The conclusion is uncomfortable but useful: MLM law Bangladesh has on paper is strong on prohibition and weak on recovery, so prevention and early action matter more than anything else.

Destiny 2000: the case that shaped the Act

Destiny Group's twin vehicles, Destiny Multipurpose Cooperative Society and Destiny Tree Plantation Limited, became the defining MLM scandal in Bangladesh and a direct trigger for the MLM Act.[2] The Anti-Corruption Commission filed two cases at Kalabagan police station on 31 July 2012, alleging that investor money was embezzled and laundered.[5]

The 2022 verdict

On 12 May 2022 Dhaka Special Judge's Court-4 sentenced 46 accused in the cooperative society case. Managing director Rafiqul Amin received twelve years and a fine of Tk 200 crore; chairman Mohammad Hossain received ten years; and president Lt Gen (retd) M Harun-ur-Rashid, a former army chief, received four years. Prosecutors put the total embezzled and laundered across both cases at about Tk 4,119 crore, with roughly 8.5 lakh investors in the cooperative and 17 lakh in the tree plantation scheme.[4] The court also directed the formation of a committee headed by a former Supreme Court judge to return money to clients, but reported at the time that no refund had yet been made.[4]

The 2025 verdict and appeals

On 15 January 2025 the same court sentenced Rafiqul Amin and 18 others to twelve years in the tree plantation money laundering case, with fines reported at Tk 4,515.57 crore; Rafiqul Amin, his wife Farah Diba and chairman Mohammad Hossain were in jail and fifteen accused were absconding.[5] Rafiqul Amin had moved the High Court Division against the 2022 sentence in June 2022.[5] For investors, the lesson is that convictions and fines do not by themselves return money: a fine is paid to the state, and while appeals are pending, recovery from fines or confiscated assets is slow.

Jubok: why victims are still waiting

Jubok, the Jubo Karmasangsthan Society, began in 1994, was registered in 1997 under the Societies Registration Act 1860, and collected about Tk 2,500 crore from roughly 3.5 lakh people by promising high returns on deposits.[6] It was not an MLM licensee; it was an unlicensed deposit-taking scheme, and Bangladesh Bank shut it down in July 2006 for illegal banking.[6]

What makes Jubok instructive is what happened next. Two government commissions, in 2010 and 2011, recommended appointing an administrator to take over and sell Jubok's assets, which one commission valued at about Tk 6,000 crore, including some 3,000 acres of land.

By November 2020 no administrator had been appointed, because the finance and commerce ministries disputed which of them was responsible. A police case filed in July 2014 against 40 officials had passed from police to the ACC and then the CID without completion, and a High Court writ filed by depositors in October 2016 had stalled.[6] Assets were reportedly sold or occupied in the meantime. The practical point for any group of victims is to press early, and through court if necessary, for an asset freeze and a named custodian, because value disappears while institutions argue.

E-commerce Ponzi cases: Evaly, e-Orange and the 2021 collapse

In 2020 and 2021 a wave of e-commerce platforms took advance payments for heavily discounted motorbikes, electronics and groceries, used new customers' money to fill old orders, and then collapsed. They were not licensed MLM companies, but the economics were the same as a Ponzi scheme. The cases show how MLM law Bangladesh interacts with consumer, criminal and money laundering law. Our guide to e-commerce law in Bangladesh covers the compliance framework for legitimate online sellers; this section focuses on outcomes.

Evaly

Evaly's chief executive Mohammad Rassel and chairperson Shamima Nasrin faced a large number of customer cases after deliveries stopped in 2021. On 18 September 2025 a Dhaka Metropolitan Magistrate sentenced both to three years' rigorous imprisonment and a fine of Tk 10,000 each in a case brought by a customer who had paid Tk 23 lakh in 2021 for eleven motorbikes that were never delivered or refunded. The pair were tried in absentia and remained absconding, with arrest warrants issued. With that verdict, they had been sentenced in five cases to a combined twelve years.[7] Each conviction vindicates an individual complainant, but a magistrate's fine of Tk 10,000 does not repay a Tk 23 lakh loss.

e-Orange

e-Orange is the clearest example of a money laundering-led prosecution. A case filed at Gulshan police station on 18 August 2021 alleged embezzlement of about Tk 1,100 crore.

Former police inspector Sheikh Sohel Rana, linked to the business, fled to India in September 2021, later travelled through Portugal to Albania, and was arrested there on 1 February 2025. As at late October 2025 he was in an Albanian prison seeking political asylum, with an Interpol red notice in place since 2022, nine cases pending in Dhaka, and a CID money laundering probe that had found evidence of Tk 358 crore in illicit earnings linked to him. His sister, the owner Sonia Mehjabin, and her husband had been released on bail.[8] We have not found verified reporting of his return to Bangladesh since then.

Escrow refunds: what came back

The partial success story is the money caught in payment gateways. After the government's escrow requirement took effect, the Central Digital Commerce Cell detected Tk 534 crore held in the central bank's escrow system, of which Tk 476.02 crore had been refunded to 95,923 customers by October 2025, while about Tk 58 crore remained stuck and funds outside escrow could not be traced.[10]

In Parliament on 30 August 2026, the commerce minister reported 58,720 complaints to the consumer directorate against companies including Evaly, e-Orange, Qcoom, Dhamaka Shopping and Alesha Mart, claiming about Tk 3,869 crore, of which Tk 531 crore had been recovered and Tk 472 crore distributed.[12] Customers who paid through a regulated gateway did far better than those who paid sellers directly.

Digital commerce rules and the MLM ban online

Online selling is where most new MLM-style schemes now appear: app-based "earn by task" schemes, referral wallets and social-media investment clubs. Several instruments are relevant, and it is important to know which are binding law and which are still proposals.

Digital Commerce Operation Guidelines 2021

The Ministry of Commerce issued the Digital Commerce Operation Guidelines in July 2021. Announcing them, the commerce minister said that digital commerce platforms may not run multi-level marketing or network businesses, and may not run lotteries without prior government approval.[9]

The guidelines also attack the advance-payment model that powered the 2021 collapses: where a product cannot be handed to a delivery agent within 48 hours of full payment, advance payment is capped at 10 per cent of the price, unless the payment passes through a Bangladesh Bank-approved escrow service. Delivery is due within five days in the same city and ten days elsewhere.[9] The guidelines are an executive instrument, but they are the reference point regulators, the consumer directorate and payment providers apply.

The Digital Commerce Authority Ordinance: still not law

A Digital Commerce Authority law has been drafted several times. A draft ordinance was approved by the cabinet in May 2024 but stalled after the change of government, and in August 2025 the interim government's Commerce Ministry submitted a redrafted Digital Commerce Authority Ordinance to the Commerce Adviser.[11] The redraft proposed an autonomous authority to license e-commerce firms, issue Digital Business Identity registration and punish false online sales information with up to two years' imprisonment. Significantly, it excluded activities covered by the MLM Act from its scope, so MLM would stay under the MLM Act.[11] We have found no record that the ordinance was promulgated before the interim government ended.

The 2026 position

On 30 August 2026, Commerce Minister Khandaker Abdul Muktadir told Parliament that the government is considering an e-commerce authority to regulate and monitor online business and that registered MLM companies would be brought under strict monitoring through it. He said RJSC had been given responsibility for registering online businesses and had digitally registered about 1,902 of them.[12]

Separately, on 30 September 2026 the Commerce Ministry published a draft amendment to the Consumer Rights Protection Act 2009 for 30 days of public comment. It would create offences for running digital commerce without registration or a Digital Business Identity, and for issuing digital wallets, gift cards, cash vouchers or cryptocurrency without Bangladesh Bank permission, each punishable by up to one year or Tk 2 lakh, and would provide for refunds of advance payments where goods are not delivered.[13] Until enacted, these remain proposals; for now MLM law Bangladesh applies is still the 2013 Act, read with the 2009 consumer law and the 2021 guidelines.

Remedies for victims under MLM law Bangladesh

No single remedy will usually recover the money. Effective victims combine several, quickly, and keep the evidence that each one needs.

Consumer complaint to the DNCRP

The Directorate of National Consumers' Right Protection (DNCRP) is the fastest forum for an undelivered order or a misrepresented product. A written complaint goes to the Director General or an authorised officer under section 76 of the Consumer Rights Protection Act 2009, with the purchase receipt attached, and it can be filed in person or electronically. It must be made within 30 days of the cause of action. If the complaint is proved and a fine is imposed and collected, 25 per cent of the fine is paid to the complainant.[14] The 2021 e-commerce refunds were also channelled through the directorate's complaint lists.[10] The 30-day limit is the most common reason complaints fail, so file early and file in writing.

Criminal complaints for cheating and breach of trust

Most MLM and Ponzi victims ultimately rely on the Penal Code offences of cheating and criminal breach of trust, filed as a first information report at the police station or as a complaint petition before a magistrate. The Evaly convictions were for breach of trust and fraud.[7] A well-drafted complaint identifies each director and officer, the representation made, the payment trail and the loss. Our guides on how to file a criminal case in Bangladesh and white collar crime in Bangladesh explain the offences, the investigating agencies and the evidence courts expect, so we do not repeat them here.

Money laundering investigations: CID, ACC and BFIU

Where the scheme is large, the money laundering route is where assets are frozen and confiscated. The ACC brought the Destiny cases and the CID ran the money laundering probe into e-Orange, while the Bangladesh Financial Intelligence Unit can freeze suspect accounts, as our anti-money laundering guide explains.[4] [8] Victims do not control these investigations, but organised victims' groups can supply evidence, identify bank accounts and properties, and press for freezing orders before assets move.

Civil suits for recovery

A civil money suit against the company and, where the facts support it, its directors, is the only remedy that produces a money judgment in the victim's favour. It is slower, but it can be combined with an application to attach property before judgment where there is evidence that assets are being dissipated. Read our guide to filing a civil suit in Bangladesh and send a properly framed legal notice first, because a notice fixes the demand and often brings the first offer.

Collective action and writ petitions

Where a government body fails to act, as with the Jubok administrator, victims can seek directions from the High Court Division under its writ jurisdiction. The Jubok depositors' writ obtained a rule but then stalled, which shows that a writ must be actively pursued.[6] Collective action also reduces the cost per victim and gives investigators a single, organised source of evidence.

The sequence below reflects how we approach an MLM or Ponzi loss for a client or a victims' group.

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How legitimate direct selling businesses can operate lawfully

Direct selling through independent distributors is lawful in Bangladesh, and well-run businesses in cosmetics, wellness and household goods can build large networks. MLM law Bangladesh asks them to prove three things: that they are licensed, that their income comes from real retail sales, and that participants are not paying to join a money circle.

Structure and licence

• Incorporate first: form a company under the Companies Act 1994 and keep its constitutional documents consistent with the MLM activity.[1]
• Obtain the MLM licence: apply to RJSC before recruiting any distributor; a trade licence alone is not enough.[2]
• Diary the renewal: the licence was designed to run year by year, so a lapsed licence turns a lawful business into an unlicensed one.[1]
• Stay within permitted products: sell real consumable goods or services in the permitted categories, never land, investment units or future products.[1]

Compensation plan design

The plan is where most legal risk sits. Pay commission on genuine sales to end customers, not on recruitment or joining fees. Keep any starter kit cheap and at cost. Avoid "inventory loading" by capping purchases and offering buy-backs of unsold, resaleable stock. Do not promise fixed monthly returns, double-your-money targets or income linked to the number of people below a distributor. Each of those features points towards the section 15 pyramid ban.[3]

Selling and pricing

Print the maximum retail price and the required product details on packaging, and never let distributors sell above it; both were made separate offences.[1] Keep products physically available and visible.[3] Give a clear written refund and return policy, and log every complaint, because the consumer directorate can act on a single consumer's complaint.[14]

Online channels

Digital commerce platforms may not run MLM or network businesses under the 2021 guidelines.[9] A licensed direct selling company can still sell online, but it should keep the recruitment and commission structure off marketplace listings, take payments through regulated gateways, and not issue in-house wallets, vouchers or points convertible to cash without Bangladesh Bank permission, an area the 2026 consumer-law draft would expressly criminalise.[13] Advice on e-commerce registration and data obligations is in our e-commerce law guide.

Governance

Directors are personally exposed when a scheme fails: in the Destiny cases, board members including a former army chief received prison terms.[4] Boards should approve the compensation plan, review distributor earnings data at least annually, keep customer money in segregated accounts, and screen for money laundering risk. Our corporate governance and compliance practice designs these controls.

Direct selling, pyramid scheme or Ponzi: telling them apart

The table below summarises how MLM law Bangladesh treats each model. On a phone, scroll it sideways.

The red flags are consistent across every collapsed scheme: returns promised regardless of sales, rewards for recruiting, products that do not yet exist or cannot be inspected, pressure to pay in cash or into personal accounts, and a licence that cannot be produced or has expired.[2] [3] A legitimate direct selling company will show its RJSC licence, its compensation plan and its refund policy on request.

Disguised schemes in 2024 to 2026

Fraudulent schemes adapt faster than the law. The 2023 intelligence report warned that former fraudsters were reappearing as micro-credit operators, cooperative banks and multipurpose societies, and that some licensed firms were running MLM under the guise of distribution or share-agent businesses.[2] The cover changes, from trees and plots to fisheries, crypto tokens and "earn by task" apps, but the economics do not: if returns are promised regardless of retail sales, treat the scheme as a Ponzi until proved otherwise.

What to watch in 2026 and 2027

Three developments will shape MLM law Bangladesh over the next year. First, whether the elected government finally legislates for a digital commerce authority, and whether MLM monitoring is brought within it as the commerce minister suggested in August 2026.[12] Second, whether the September 2026 Consumer Rights Protection Act amendment draft becomes law, giving the consumer directorate express powers over unregistered online sellers, unauthorised wallets and refunds of advance payments.[13] Third, whether the long-running asset recovery in Destiny, Jubok and the e-commerce cases produces real distributions to victims, which will depend on administrators, appeals and the money laundering confiscation process rather than on new legislation.

For businesses, the safest assumption is that scrutiny of recruitment-based models will increase, not decrease. For victims, speed matters most: complaints within 30 days, evidence preserved, and pressure for freezing orders before assets move. If you need advice on licensing a direct selling business or on recovering losses from a failed scheme, explore our consumer protection practice or contact TRW.

Frequently asked questions

Is MLM legal in Bangladesh?

Yes, but only under a licence. The Multi-Level Marketing Activities (Control) Act 2013 prohibits MLM business without a licence and bans pyramid schemes outright, whether or not the operator holds a licence.[3]

Who issues MLM licences in Bangladesh?

Licences are processed and issued through the Registrar of Joint Stock Companies and Firms under the Ministry of Commerce. A city corporation trade licence is not an MLM licence.[2]

What is a pyramid scheme under the MLM Act?

A scheme that rewards participants mainly for recruiting others rather than for genuine sales to the public. Section 15 bans pyramid and pyramid-like schemes, including those built on products that are not real or are only to be produced in future.[1] [3]

What is the penalty for running MLM without a licence?

As tabled in Parliament, the bill provided for up to ten years' imprisonment and a fine of up to Tk 50 lakh, with double punishment for repeat offences. Check the enacted text for the exact figures in your case.[1]

Can MLM be run through an e-commerce platform?

No. The Digital Commerce Operation Guidelines 2021 bar digital commerce platforms from MLM and network businesses.[9]

What happened to Destiny 2000's leaders?

In May 2022 Rafiqul Amin received twelve years and a Tk 200 crore fine in the ACC's cooperative society case, and in January 2025 he and 18 others received twelve years in the tree plantation money laundering case.[4] [5]

Have Evaly customers got their money back?

Only partly. Money held in payment-gateway escrow has largely been refunded, but money paid outside escrow has not been traced, and Evaly's founders, convicted in absentia in several cases, remained absconding as of September 2025.[7] [10]

Is there a Digital Commerce Act in Bangladesh in 2026?

No. A Digital Commerce Authority Ordinance was redrafted in 2025 but not enacted, and in August 2026 the government told Parliament it was still considering an e-commerce authority.[11] [12]

How long do I have to complain to the DNCRP?

Thirty days from the cause of action. If the complaint is proved and a fine is collected, 25 per cent of it is paid to the complainant.[14]

Can I sue the directors of a failed MLM company?

Often, yes. Directors and officers who made the representations or handled the money can be named in criminal complaints for cheating and breach of trust and, depending on the facts, in a civil recovery suit, alongside any money laundering investigation.[4] [7]