Direct Selling Ad Rules in Malaysia (2027)

The first thing a Malaysian regulator checks is the licence, not the creative

Most advertising compliance questions start with the words in the ad. This one starts a step earlier, because the statute is built as a licensing regime with an advertising chapter bolted on rather than as an advertising code.

Section 4(1) of the Direct Sales and Anti-Pyramid Scheme Act 1993 reads:

Subject to sections 14 and 42, no person shall carry on any direct sales business unless it is a company incorporated under the Companies Act 1965 and holds a valid licence granted under section 6.

The licence holder must be a company, not a sole proprietor and not a distributor, and the licence is granted under section 6. The qualifier at the front does more work than qualifiers usually do. Section 42(1) empowers the Minister, by order and subject to such conditions as he may deem fit to impose, to exempt any person or class of persons, or any direct sales business or class of direct sales businesses, from all or any of the provisions of the Act on four grounds: proceeds used exclusively for charitable, welfare, social, religious or educational purposes, a seller who is a person with disability, a seller required in the ordinary course of business to supply by direct sale for the convenience of purchasers, and an exemption that would not, in the Minister's opinion, prejudice the interests of purchasers.

The reference to the Companies Act 1965 is the text as printed in the reprint. That Act has since been repealed and replaced by the Companies Act 2016, and the section was never updated, which is a useful early signal about how long this statute has sat still.

Section 4(2) prices the failure. A body corporate, partnership or society trading without a licence faces a fine not exceeding RM1,000,000 and, for a second or subsequent offence, not exceeding RM2,000,000. An individual faces a fine not exceeding RM250,000 or imprisonment not exceeding 5 years or both, and on a second or subsequent offence a fine not exceeding RM500,000 or imprisonment not exceeding 10 years or both. That second-offence individual band is routinely truncated in the summaries that circulate, which present the first-offence figures as if they were the ceiling.

KPDN publishes the register, Status Syarikat Jualan Langsung, and it is worth actually opening before you write a line of copy for a client. When it was retrieved on 16 September 2026 it carried 360 companies listed AKTIF, against about 1,350 rows in the lapsed-period table and 160 cancelled licences. The register carries no as-at date of its own, so any count taken from it belongs to the day it was pulled. What it does not do is tell you whether a listed company's advertising complies with anything; it is a licence list and nothing more.

The Act you are reading was last amended in 2011, and a rewrite is being prepared

Before quoting any section of Act 500 at a client, get the vintage right, because the penalties in the 1993 print are not the penalties in force.

AGC's own timeline for Act 500 runs: Feb 1993 Original, Jan 2002 Reprint, Jan 2006 Reprint, Mar 2011 Amendments, Dec 2011 Reprint Online, Jan 2013 Reprint, Jul 2024 Subsidiary Legislation. The last amending Act is A1379, in operation 1 March 2011, and it is the one that inserted section 19A and the whole of Part VA, where the anti-pyramid provisions live. The consolidated text to work from states on its own face that it is as at 1 March 2013. A cross-check of AGC's amendment-Act index, covering 409 amending Acts from A1392 to A1796, turns up no Direct Sales entry, so the 2013 reprint is still the current consolidated text as at the last check on 16 September 2026.

One retrieval trap is worth flagging for anyone verifying this themselves. AGC serves two Act 500 PDFs, and the one filed under the older path is a scan of the original 1993 print with no text layer, carrying the pre-2011 text. Quote from that and you will cite penalties that were superseded on 1 March 2011.

A rewrite is coming, but it is not here. On 2 October 2025 Bernama reported the Deputy Minister of Domestic Trade and Cost of Living, Datuk Dr Fuziah Salleh, saying that persiapan untuk meminda sedang dilakukan, preparations to amend are under way, with the stated aims of aligning the Act with international standards and giving consumers and sales representatives better protection. The report describes preparation. It does not report a Bill tabled, passed or in force. Write to the Act as it stands and treat the amendment as a watch item.

What a licensed company's product ad may actually promise

Here is the part most compliance decks skip, because prohibition is easier to write than permission. A licensed direct-selling company advertising a product is doing an ordinary, lawful thing, and Act 500 has remarkably little to say about the substance of a product claim.

Section 21 is the one provision that goes to truthfulness, and it is narrow:

Any person who furnishes false or misleading information in an advertisement for the supply of goods or services by mail order shall be guilty of an offence.

That is the whole section. It bites on mail-order advertising specifically, and it says nothing about substantiation standards, comparative claims or superlatives. Those come from a different body of Malaysian rules entirely, and the burden of proving a performance claim is worked through in the guide on substantiating an ad claim in Malaysia. If the product is a medicine, a traditional product or anything that reads as medicinal, the Medicine Advertisements Board route applies on top, and the KKLIU approval process for Meta ads is a separate gate with its own timeline.

What Act 500 does regulate directly is the deal. Its section 2 definition of the cooling-off period gives a purchaser 10 working days from the day after the contract is made, which is a genuinely strong consumer right and one that direct-selling creative loves to convert into a headline. Be careful with that conversion. A statutory cooling-off right presented as a brand-generous guarantee is a claim about your terms, and the rules on how a guarantee or a free offer may be worded are covered in the guide to free offers and guarantee claims.

Read section 23(1) carefully before you repeat the RM300 figure that circulates with it. The subsection applies to a contract in respect of a door-to-door sale for the supply of goods or services having such value as may be prescribed, and a contract in respect of a mail order sale. The value threshold attaches to the door-to-door limb alone, so a mail-order contract is inside section 23(1) at any value, which matters on a page whose next section turns on online order-taking being a mail order sale. Such a contract must be in writing, signed by both vendor and purchaser, and must carry immediately above the purchaser's signature line the statement THIS CONTRACT IS SUBJECT TO A COOLING-OFF PERIOD OF TEN WORKING DAYS in upper case, in type not smaller than 18 point Times. KPDN's December 2024 checklist does state a RM300 figure, but it states it for the sample contract required of MLM and SLM marketing plans, not for mail order. Treat it as ministry guidance scoped to those plans rather than as a floor on section 23(1).

On the marketing plan itself, KPDN's published guidance, in the Panduan Pelan Pemasaran attached to its December 2017 Tatacara, sets two expectations that shape what a compliant ad sounds like. The presentation of a direct-selling scheme must not mislead participants by placing excessive emphasis on disproportionately high bonuses. And a company must provide an incentive based on the volume or quantity of goods or services sold or distributed by each participant admitted into the scheme, and not on the recruitment of people into the scheme. Both of those are KPDN's rendering of the Direct Sales (Scheme and Conduct) Regulations 2001, whose gazette text we could not retrieve, so they are quoted here as ministry guidance and not as regulation wording.

Read practically, the permitted shape of a direct-selling ad is the same as any other product ad. Show the product, describe what it does in claims you can evidence, state the price and the delivery, and keep the income story out of the creative unless you are prepared to defend it under the provisions below.

Section 20's eight items, and the definition that decides who they bind

Section 20 is titled Contents of advertisement in mail order sales, and it is the closest thing in Malaysian law to a prescribed disclosure list for a direct seller's advertising. Section 20(1) provides that an advertisement by any person for the supply of goods or services by mail order shall contain the following.

Now the scope question, which is where most write-ups go wrong in one direction or the other. Section 20 reaches an advertisement for the supply of goods or services by mail order. It is not a general Malaysian rule that every advertisement must carry a licence number. But it is also not a museum piece limited to printed catalogues, because section 2 defines a mail order sale as the sale of goods or services which a person conducts, among other routes, by receiving an offer for a sale contract by mail or any other means of mailing including through electronic means.

Through electronic means. A licensee whose ad invites an order by WhatsApp, by form fill or by online checkout is receiving an offer through electronic means, and the eight items in section 20(1) reach that advertising. Item (e), the place and time a sample may be inspected, sits awkwardly on an Instagram Story, and the Act gives no relief for the awkwardness.

What section 20 is not is a general online-seller disclosure code. Malaysia has one of those, it sits in different regulations with a ten-item Schedule of its own, and it attaches at a different point. That instrument, and the genuinely unsettled question of whether it binds a Facebook Page shop at all, is the subject of the guide to what Malaysian online sellers must disclose. Do not merge the two lists. They come from different statutes, bind different people, and the eight items here are triggered by mail-order direct selling rather than by selling online.

"Sales through electronic transaction" is narrower than it sounds

Section 19A was inserted by Act A1379 and came into operation on 1 March 2011. It reads:

No person shall supply by sale, or advertise for the supply of, through electronic transaction, any goods or services except in accordance with this Act or the regulations.

Section 19A(2) makes a contravention an offence. Read alone, that sentence looks like it swallows Malaysian e-commerce whole, and it gets quoted that way. It does not, because the Act defines the phrase. Section 2 provides that sales through electronic transaction means sales of goods or services through electronic means by using marketing networks with the purpose of getting commission, bonus or any other economic advantage.

The trigger is the marketing network plus the commission. An ordinary online shop selling its own stock to customers is not using a marketing network to earn a commission, bonus or other economic advantage, and section 19A does not convert it into a licensable direct seller. A network of distributors selling through their own social accounts and earning commission on the sale is exactly what the definition describes.

So the provision that matters most to a Malaysian MLM's social advertising is not a general e-commerce rule. It is a rule that says network selling online must happen in accordance with this Act or the regulations, which loops straight back to the licence in section 4(1) and the contents requirement in section 20(1). Advertising for a supply that the Act does not permit is the offence, independently of whether anything was sold.

Section 19A has an older twin directly above it that almost nobody quotes. Section 19(1) provides that no person shall supply or advertise for the supply of, by mail order, any goods or services except in accordance with this Act or the regulations, and section 19(2) makes a contravention an offence. Same architecture, older route, still live. Because section 2 pulls orders received through electronic means into mail order sale, a licensee running an order-by-message campaign is usually inside section 19 and section 19A at once, and both sit on the compoundable list set out below.

The AJL93 number is a licence condition, and section 6(4) still makes breaking it an offence

The two duties every Malaysian direct-selling checklist leads with are not sections of Act 500. They are conditions KPDN attaches to the licence, which is a different thing with a different source, and this is also the section where the published evidence gets thinnest, so both facts belong on its face.

KPDN's Tatacara Permohonan Lesen Jualan Langsung sets out the Syarat-syarat Lesen Jualan Langsung, the licence conditions. Condition 2 lists matters for which the licence holder must obtain ministry approval, and condition 2(iii) covers mengadakan sebarang kempen, promosi atau apa jua bentuk iklan bagi tujuan memasarkan produk syarikat, holding any campaign, promotion or any form of advertisement for the purpose of marketing the company's products. Condition 3 lists matters the licence holder must carry out, and condition 3(v) requires it to record the official direct-selling licence number AJL93XXXX on signage, on semua jenis iklan, on printed material, on letterhead and on the company's official website, for public verification.

Both are real, published, and sit on the licensee. Neither is a provision of the Act, and the distinction still matters: it changes who is exposed, since section 20(1) binds any person advertising by mail order while the conditions bind only the licence holder. What the distinction does not do is make the conditions unenforceable, and that is where most compliance writing on this point goes wrong. Section 6(4) of Act 500 reads:

Any licensee who fails to comply with any conditions of the licence imposed by the Controller under subsection (1) shall be guilty of an offence.

So a licensee that leaves the AJL93 number off its advertising, or runs a campaign without the ministry approval condition 2(iii) requires, is not merely in a private conversation with the Controller. It has committed an offence under the Act. Section 6(4) prescribes no penalty of its own, so section 39 supplies one, which for a body corporate is a fine not exceeding RM250,000 and not exceeding RM500,000 on a second or subsequent offence. Section 41 gives a Sessions Court jurisdiction to try it, and section 6 is on the list of compoundable offences prescribed by P.U. (A) 281/2018. KPDN's Tatacara says as much at the head of its conditions, that pelanggaran terhadap syarat-syarat lesen di bawah adalah merupakan suatu kesalahan, a breach of the licence conditions below is an offence. Section 8(1)(b) separately lets the Controller revoke the licence for a breach of a condition regardless that there has been no prosecution, so the two routes run side by side.

How far that published conditions document can be trusted is the other half of this section, and a compliance page that leaves the qualifications out is overselling its own evidence. The Tatacara is dated December 2017. It still uses the ministry's former name, KPDNKK. It states on its own face that the document may not be used in any court dispute, in its own words that it tidak boleh digunakan untuk sebarang pertikaian di Mahkamah. And KPDN's own December 2024 checklist refers to a Salinan Syarat-syarat Lesen Jualan Langsung held by existing licensees, which is the current conditions document, and that document was not retrieved. So the safest statement of the position is that these are KPDN's published licence conditions as of December 2017, and a licensee should be reading the conditions actually issued with its own licence.

One figure in circulation needs its label fixed while we are here. The Tatacara does state a one-month lead time, permohonan perlu dikemukakan sekurang-kurangnya satu bulan sebelum kempen/promosi/insentif tersebut diadakan, an application at least one month before the campaign, promotion or incentive is held. That is a lead time for holding a campaign, not an advertisement-approval notice period, and nothing retrieved describes KPDN pre-approving an individual Facebook or Instagram ad. Anyone selling you a per-creative ministry approval workflow is describing something the documents do not.

The pyramid test is a checklist, and one feature is enough to fail it

Section 27A carries the definition that the rest of Part VA runs on:

"pyramid scheme" means any scheme, arrangement, plan, operation or chain process having all or any of the features specified in the Schedule.

All or any. Those three words are the whole design. The Schedule lists ten features, and a scheme that has one of them is a pyramid scheme for the purposes of the Act. There is no weighing, no predominance test and no proportion to argue about.

Feature 1 is the one everyone knows, and it is worth reading slowly because its wording is more forgiving than its reputation:

The promotion of a scheme or the payment of bonus or other benefits is solely or primarily through recruitment or introduction of participants, into the pyramid scheme, plan, operation or chain process rather than the sale of goods, services or intangible property by the participants.

Solely or primarily. A plan that pays a recruitment bonus alongside genuine volume-based commission is not automatically inside feature 1, and this is the single most common place where a legitimate marketing plan gets mislabelled by a nervous adviser. The question feature 1 asks is where the money principally comes from, promotion and payment driven mainly by bringing people in versus mainly by selling things.

The trap is in treating feature 1 as the whole test. Other features have nothing to do with recruitment economics at all, and two of them, the absence of a written contract given to participants and the absence of a refund policy, are administrative failures a company with a perfectly ordinary sales-driven plan can commit by sloppiness. Each is a standalone trigger. A marketing plan can be commercially honest and still tick a Schedule feature because the paperwork was never issued, and the definition does not care which feature you ticked.

For an advertiser, the practical consequence is that you cannot clear a recruitment creative by reading the ad. The ad is only the promotion; what determines whether promoting it is an offence is the design of the scheme behind it, and that assessment belongs to the company's own legal review of its marketing plan against all ten features.

The ten are also not fixed the way the sections are. Section 45 lets the Minister amend the Schedule by order published in the Gazette, and it has been amended once already, by Act A1379 with effect from 1 March 2011, which is why the Schedule appears in the reprint's list of sections amended. No later order was located as at 16 September 2026, so ten is the current count. An audit run against a printed copy of the Schedule should record the date that copy was taken.

"Promote" is defined to include advertising it and inducing anyone to join

Section 27B(1) is one line: no person shall promote or cause to be promoted a pyramid scheme. The work is done by the definition of promote in section 27A, and it was clearly drafted with media in mind:

"promote", in relation to pyramid scheme prohibited by this Act, means (a) to contrive, prepare, establish, plan, advertise, operate or conduct by using any medium, including electronic transaction; or (b) to induce or attempt to induce other persons to be a participant in such scheme by using any medium, including electronic transaction;

Read limb (a) against a paid social campaign. To advertise, by using any medium, including electronic transaction. There is no argument available that a Facebook ad is outside the medium. Read limb (b) against an organic recruitment post. To induce or attempt to induce other persons to be a participant. An attempt is enough; nobody needs to have joined.

The advertising is not evidence of the offence here. It is the offence, so the creative and the media buy are themselves the prohibited conduct rather than proof of something else that happened elsewhere. The phrase cause to be promoted in section 27B(1) then reaches past the person who pressed publish, and an agency briefing, approving and running the campaign is squarely inside that language.

Note also what section 2 does with the word advertisement generally. It provides that advertisement includes every form of advertising, and after listing routes it closes with or in any other way. The Act was written in 1993 and its advertising vocabulary was built to travel.

Meta's own rules run in parallel here, and where the statutory band starts at a million ringgit, the platform outcome is a rejected ad or a disabled account. Both matter, and they are not substitutes for each other.

An advertising breach costs RM100,000, not fifty million

This is the separation that gets flattened in almost every summary, and flattening it produces a page that is scarier and less useful than the law. The million-ringgit numbers belong to one provision only.

Sections 6(4), 19(2), 19A(2), 20(2), 21 and 22(2) each create an offence without prescribing a penalty of their own. Where that happens, section 39 supplies one. Section 39(1) provides that a person guilty of an offence under the Act or the regulations for which no penalty is expressly provided is liable to a fine not exceeding RM100,000 or imprisonment not exceeding 3 years or both, rising to RM250,000 or 5 years or both on a second or subsequent offence. Section 39(2) sets the body-corporate figures at RM250,000, rising to RM500,000 on a second or subsequent offence.

An ordinary advertising failure by a licensed company, a missing licence number or an overstated delivery time, sits in the RM100,000 to RM500,000 world and not the fifty-million one. The section 27B bands, meanwhile, are minimum fines rather than ceilings, which is rare in Malaysian consumer legislation and is the reason the pyramid provisions read so differently from the rest of the Act. A court sentencing a body corporate on a first section 27B conviction has no discretion to go below RM1,000,000.

Never let those two worlds sit in the same sentence. A compliance note that answers "what happens if my ad is missing the licence number" with the pyramid band overstates the exposure by somewhere between ten and five hundred times, and the person reading it will either panic or stop believing the note.

There is a third question the table does not answer, and it decides whether a breach ever reaches a court at all. Section 40(1) lets the Controller or a Deputy Controller compound an offence that is prescribed to be compoundable, and the prescribing instrument is P.U. (A) 281/2018, which replaced regulation 2 of the Direct Sales (Compounding of Offences) Regulations 1993 with this:

The offences committed under sections 6, 17, 18, 19, 19A, 20, 22, 25 and 37 of the Act and all offences committed under the Direct Sales Regulations 1993 P. U. (A) 128/1993 are prescribed as compoundable offences.

Read that list against the advertising provisions and one omission jumps out. Sections 6, 19, 19A and 20 are all there, so a licence-condition breach, a mail-order or electronic-transaction advertising breach and a mail-order ad missing its eight items can each be settled by compound. Section 21 is not there. The truthfulness offence cannot be compounded, so the only route for a false or misleading mail-order advertisement is prosecution. Section 4 and section 27B are absent too, which is what you would expect of the two offences the Act treats most seriously. That instrument came into operation on 1 January 2019.

Meta's rulebook never says MLM, and that changes how you read it

A great deal of circulating advice quotes an old Meta clause about how an income-opportunity ad must describe the business behind it. That clause is not in the current standards, and it could not be verified as live policy anywhere on Meta's published pages. Do not build a review process on a sentence that no longer exists in the rulebook.

What is there, read on 16 September 2026, is narrower and more specific. Meta's Community Standard on Prohibited Commercial Practices, under the heading Prohibited Investment Content, prohibits:

Offers of investment opportunities where returns on investment or compensation is partly or fully based on recruitment of others to participate in the scheme.

Under Prohibited Get Rich Quick Content, it prohibits:

Offers of opportunities of unrealistic financial reward for unclear or minimal effort.

The advertising side is a single line, that ads must comply with the Community Standard on Prohibited Commercial Practices, sitting above an overview that names deceptive pricing, unauthorised endorsements and guaranteed investment returns as examples of the practices it targets.

The words MLM, multi-level and multilevel appear nowhere on either page, so a reviewer hunting for an MLM policy finds nothing and may wrongly conclude the category is unregulated on-platform. Read the clause with its own stem attached instead, because the stem is the gate. It prohibits offers of investment opportunities where the returns or compensation are partly or fully based on recruitment, and both halves have to be present. The creative has to read as an offer of an investment opportunity, and the return on that offer has to turn on recruiting others. Once a creative is through that gate, partly does serious work, and an income claim that leans on team building only in part is still inside the clause.

An income claim that is not framed as an investment offer is a different question. It is read against the Get Rich Quick line above and against the advertising standard's overview, which is a different route with a different answer available. What does not change between the routes is that the standard attaches to the offer described in the ad, which is why the same licensed company can run a compliant product ad and a non-compliant income ad on the same account in the same week.

How Meta's prohibited and restricted lists fit together, and what the review actually looks at across the ad, the landing page and the whole experience, is covered in the guide to Meta's prohibited content list. The point to carry back here is that platform approval proves nothing about Act 500, and Act 500 compliance proves nothing about platform approval. Two rulebooks, no overlap in enforcement, and the stricter one governs whichever it happens to be on a given creative.

One more layer applies where distributors post on their own accounts about products they earn from. That is paid or incentivised endorsement territory, and Malaysian disclosure expectations for it are handled separately in the guide to influencer and creator ad disclosure.

The exclusions are narrower than the people quoting them think

The carve-outs in section 1(3) close a question that otherwise wastes weeks, and they are also the part of the Act most often stretched past what it says.

Section 1(3)(a) provides that the Act shall not apply where the purchaser or the prospective purchaser is a body corporate. A wholesale supply arrangement between two businesses, or a pitch built entirely around selling to companies, is outside this Act. That does not put it outside every Malaysian rule about advertising truthfulness, but it does take Act 500 off the table.

The other two exclusions are narrower than their reputation, and the wording is the reason. Section 1(3) continues:

(b) to any contract of insurance and reinsurance issued by an insurer registered under the *Insurance Act 1963 Act 89; and (c) to any contract of takaful and re-takaful issued by a takaful operator registered under the Takaful Act 1984 Act 312.

The exclusion is at contract level and tied to registration under the named statutes, so it takes the insurance or takaful contract outside Act 500. It does not lift a company out of the Act wholesale. An agency-recruitment campaign is not a contract of insurance or takaful, so nothing in section 1(3) answers how Part VA applies to a recruitment scheme, and that question turns on the scheme as everything in Part VA does. The asterisk on the Insurance Act 1963 is the reprint's own, and its footnote records that the Act was repealed by the Insurance Act 1996, the same drafting fossil as the Companies Act 1965 reference in section 4(1).

Section 42(1), already noted, lets the Minister exempt a person, a class of persons or a direct sales business from all or any of the Act's provisions on the four stated grounds. An exemption is a specific instrument, not a general argument, so it is only useful to you if one exists and names you.

Section 14 is the other qualifier in section 4(1)'s opening words, and it is worth reading rather than waving at, because it is not an exemption route. It provides that the Controller may, in writing, authorize a company whose licence has been revoked to carry on its activities for such duration as the Controller may specify, but only for the purpose of winding up its affairs or for purposes which are beneficial to its purchasers or other persons dealing with it. That is a wind-down permission for a company that has already lost its licence. Nobody is advertising a recruitment campaign under section 14.

The regulations around the Act, and the ones we could not read

Act 500 delegates a good deal, and the subsidiary legislation is where a working direct seller's day-to-day obligations actually live. This is also where the honest limits of any public guide start, so both halves belong in the same section.

AGC's subsidiary-legislation index carries exactly three instruments under Act 500.

Notice what those three tell you and what they do not. Each verifies the number of a principal instrument it amends, which is how P.U. (A) 128/1993 and P.U. (A) 256/1993 are confirmed as the correct citations. The text of the Direct Sales Regulations 1993 was not retrieved, so this page does not state what they require. Regulation 2 of the compounding Regulations is the single exception, because P.U. (A) 281/2018 substituted it in full and so prints its current wording inside a gazette we did read, which is why the compoundable-offence list above is quoted rather than described.

Then there is the regulation-making power everyone reaches for. Section 44(2)(a) provides that regulations may be made:

to regulate the issue, circulation or distribution of documents, whether advertisements, prospectuses, circulars or notices, which contain (i) an invitation to any person to become a participant in direct sales schemes; or (ii) information calculated to lead directly or indirectly to any person becoming a participant in such schemes, or to prohibit any such document from being issued, circulated or distributed unless it complies with such requirements as to the matters to be included or not to be included in it as may be prescribed by the regulations

That is a power, not a prohibition, and the second limb is the one that gets quoted as though it were the rule. The power to prohibit a recruitment document is a power to prohibit it unless it complies with requirements prescribed by regulations, so it does nothing until those regulations exist. Whether the power has been exercised, and what any resulting rules say, we could not verify. Writing "section 44 bans misleading recruitment advertising" invents an operative rule out of an enabling provision, and it is a common enough error to be worth naming.

The Direct Sales (Scheme and Conduct) Regulations 2001 are the instrument that most directly governs how a scheme may be presented, and KPDN's Tatacara summarises them. Their gazette text was not retrieved and their P.U. (A) number could not be verified against AGC's index, so no number for them appears anywhere on this page, and anyone citing one to you should be asked where they read the gazette. Everything above about misleading scheme presentation and sales-based rather than recruitment-based incentives is that summary, not regulation text.

Where the evidence stops, this page stops

Nothing here is legal advice. It is a reading of published instruments, written for the person who has to sign off the creative, and a compliance page that hides the edges of what it read is worth less than one that names them.

We cannot tell you what the Direct Sales (Scheme and Conduct) Regulations 2001 say in their own words, only what KPDN's December 2017 guidance says they require.

We cannot tell you whether the licence conditions reproduced in that 2017 Tatacara are identical to the conditions KPDN issues with a licence today. The ministry's own 2024 checklist points to a current conditions document held by licensees, and that document was not retrieved. If you hold a licence, your copy is the authority, not ours.

We cannot tell you whether any regulation has in fact been made under section 44(2)(a) to control recruitment advertisements, prospectuses, circulars or notices. The power exists. Its exercise was not verified.

We cannot tell you the maximum compound sum under section 40. Which offences may be compounded is settled and quoted above; the amount is not. Section 40(1) caps a compound at such amount as may be prescribed, section 44(2)(f) leaves the prescribing to regulations, and no instrument prescribing a sum was retrieved.

We cannot give you enforcement statistics. No count of KPDN raids, prosecutions or convictions under Act 500 was retrieved from a named, dated official source, and enforcement volume is what every risk conversation actually turns on. Industry scale we can give you, from one source only: the ministry statement reported by Bernama on 2 October 2025 put direct-selling sales in the previous year at RM34.4 billion, up 7.4 percent, with Malaysia sixth in the world and fourth in Asia Pacific on market penetration at 2.28 percent. Any other industry figure you are shown should come with a source of that kind attached.

And we cannot tell you whether your marketing plan ticks a Schedule feature. That is a legal assessment of a specific plan against ten specific features, it belongs to a Malaysian adviser with the plan and the Act in front of them, and it is the assessment on which everything else in this guide depends.

A pass to run before the next campaign brief goes out

Start with the licence, because everything downstream assumes it. Confirm the company is listed AKTIF on KPDN's Status Syarikat Jualan Langsung register on the day you check, and note the AJL93 number, the licence period and the state. A lapsed period is not a paperwork detail when section 4(1) is what makes the business lawful.

Read the creative for its offer rather than its format. A product offer puts you in ordinary advertising territory, where the work is claim substantiation, price accuracy and delivery honesty. An offer of a position, an income or a team does not by itself put you inside section 27A, because the pyramid test runs on the design of the scheme rather than on a sentence of copy. What it does is send the creative to two reviews it would otherwise skip: the company's own assessment of its marketing plan against all ten Schedule features, and a platform reviewer reading the ad against Prohibited Investment Content and the Get Rich Quick line.

The order-taking route is the next pass. If the ad invites an order by message, form or checkout, section 2's mail order sale definition reaches it through the words including through electronic means, and the eight items in section 20(1) are in play. Walk them in order: name and licence number, a real address that is not a PO box, a telephone number, a detailed description, sample inspection, prices, delivery cost and manner, expected delivery time. Decide where each one lives, in the creative, in the caption or on the landing page, and write that decision down.

Income language deserves a pass of its own. A line that ties earnings to bringing people in rather than to selling product is the line to escalate to the marketing-plan review, and the reason is precise. Feature 1 asks whether the scheme's promotion or bonus payment is solely or primarily recruitment-driven, so copy that reads that way is either describing a plan with that problem or misdescribing a plan without one, and neither answer is available from the ad alone. If the same line also frames the opportunity as an investment whose return depends on recruiting, it is inside Meta's clause as well, and that part you can settle from the creative.

Put the AJL93 number on the assets. KPDN's published conditions ask for it on semua jenis iklan, section 6(4) makes a breach of a licence condition an offence in its own right, and section 20(1)(a) requires it outright on mail-order advertising.

Finally, keep two folders. One holds the primary instruments you actually rely on, the AGC reprint as at 1 March 2013 and the gazette copies of the three subsidiary instruments. The other holds ministry guidance, clearly labelled as guidance and dated. When someone forwards a checklist, you will know within a minute which folder it belongs in, and whether it belongs in either.