Global Business Resources

Plan Basics

Overview

Purchasing Products
All Amway Business Owners purchase products directly from Amway.

Bonus Payment
Bonuses will be paid directly to all Amway Business Owners who have earned the bonus. Bonus payments will be paid by a bank transfer or accounts receivable credit.

PV/BV Transfers
PV/BV transfers are not available. There is no method of transferring PV/BV from one Amway Business Owner to another.

Consolidated Line of Sponsorship (CLOS)
Nine Eastern European Amway markets: Croatia, Czech Republic, Hungary, Poland, Romania, Slovakia, Slovenia, Turkey and Ukraine, are combined into a Consolidated Line of Sponsorship (CLOS) Region. This will allow all current and new ABOs, AIEs and Members Plus to personally sponsor within and into each of these countries. Option of international sponsoring between the countries within CLOS Region is discontinued. (All businesses established before August 31, 2003 will continue to count according to international sponsoring rules.) International sponsoring from outside the CLOS Region continues to be available. If an ABO has no business in any of the countries that make up the CLOS Region, he will be allowed to establish one new business in the CLOS Region. An ABO, AIE or Member Plus who already has at least one business in the CLOS region will not be allowed to establish another one.

Performance Schedule

PV Performance Bonus
10000            21%
7000              18%
4000              15%
2400              12%
1200               9%
600                 6%
200                 3%

Retail Margin
Retail margin or mark up for Amway products averages about 30% but varies with each product. The average retail margin for this market is 30.4%.

how to start

Starter Kit Purchasing
New applicant purchases Starter Kit from sponsor/foster sponsor. Starter Kit (including application form) ordered by distributors directly from Amway.

Cost of Starter Kit

Starting Kit:
8100 Hungarian Forints

Sponsoring
Personal (local business)/International and Foster:
All new applicants are introduced to the Amway business by a Sponsor. Foreign applicants may Internationally Sponsor and must have a local (Foster) Sponsor. If the new applicant and his International Sponsor do not know any potential local (Foster) Sponsors, they are advised to contact the local affiliate (Amway Hungary) for assistance.

Business Type
In relation to the IMC (Amway Business Owner, Member, Client) model, these new classifications are available (implemented in June 2000):

Amway Business Owner:
Amway Business Owners can use many benefits and opportunities to earn income. At the same time, they are entitled to register new Amway Business Owners and Members Plus and supply products to Clients.

Member Plus (M+):
This status offers significant benefits to anyone who wishes to know more about the Amway business and products. A Member Plus purchases products for their own consumption at the same price as an Amway Business Owner, and is involved in a Discount program.

Member:
This status can, after paying a small annual fee, buy products at Amway Sales prices and gain other benefits.

Client:
These are customers who purchase products on an ongoing basis.

Marketing Advisor
A status which allows European Platinum and above to sponsor and purchase products for personal consumption (except in Germany) in other Marketing Advisor Markets (MAM) without maintaining a formal, legal presence there while maintaining the same benefits of the Sales and Marketing plan as a multiple business. It does not provide for combining volumes between markets for purposes of bonus calculations.

Eligibility:
Platinum Pin and above in any of the markets listed below. Diamond Pin in any existing Amway market that has multiple businesses in any of the markets participating in the program.

Participating Markets:
If you have a traditional Amway distributor business and local address in one of the below countries (home market) you can have businesses in the remaining countries (marketing advisor countries) as a Marketing Advisor.

Austria, Hungary, Netherlands/Belgium, Spain/Portugal, United Kingdom, Germany, Czech Republic, Poland, Switzerland, France, Italy, Slovenia, Scandinavia (Denmark, Finland, Norway, Sweden), Romania, and Slovakia.

Benefits:
– Receive individual MAM commission checks in your home country in home currency
– Minimal business and tax registration and reporting requirements
– Maintain and develop lines of sponsorship within each market
– Renewing distributorship in the home country will automatically renew your Marketing Advisor Businesses, although an annual Amagram subscription fee will be charged for each market
– Amagrams, LOS information and bonus statements will be mailed directly to your home market address
– You will continue to be recognised in the Marketing Advisor Markets for your achievements

Activities Allowed as a Marketing Advisor:
– Sponsoring & Demonstration of Sales and Marketing Plan
– Speaking Engagements

Activities not permitted as a Marketing Advisor:
– Purchasing and Retailing products
– Travel to the market more than 8 days out of 90

Establish a Second Business

International Sponsoring
International sponsoring is always an option and an excellent means of expanding your business while avoiding many of the costs and complexities associated with establishing a second business. Please note: For those markets where foreigners are able to establish a second business, they must be the international sponsor of their second business in another country.

Business Entities
Business Owners may establish a second business in Hungary. A second business can be an Amway Partner without a trade license, or a distributorship with a trade license. The most common forms of distributorships are: Sole Proprietorship (as a private entrepreneur – requiring an ID card – the foreigner must have an immigrant or refugee status under Hungarian law), Limited Partnership and Limited Liability Company. If a person who already operates another non-Amway business in Hungary, where his or her liability is not limited (Sole Proprietorship, Unlimited or Limited Partnership) wishes to establish a second business, the non-Amway business must be terminated or – in the case of Limited Partnership – must be changed in a way to eliminate the unlimited liability.

Visa Requirements and Work Permits
A temporary Residence Permit must be obtained from the Police Headquarters of the Hungarian residence of a foreign individual if the foreigner intends to stay in Hungary for under one year. If this stay exceeds one year, then a Permanent Residence must be obtained from the National Center of the Police in Hungary.

Any foreigners residing and working in Hungary as a Sole Proprietorship must apply for a Work Permit at the Hungarian Labor Center. If the foreigner intends to utilize the business category of a Company, the EMPLOYER (the company) must apply for a Work Permit at the Hungarian Labor Center.

The Hungarian Consulate in your country of residence should be contacted in advance to obtain a general idea of the appropriate immigration requirements for your business purposes. Laws relating to visa requirements are constantly changing. Business Owners must consult experts in the country to obtain advice on appropriate immigration requirements. Consulting an expert is also important, if you do not intend to reside there.

Business Owner Registration Requirements
Registration requirements include:
1) Tax Office. Completion time: Immediate (15 days for Companies)
2) Registration in the Municipality where the Distributor has permanent residence if the form is Sole Proprietorship. Completion time: Immediate
a) In the case of a Company with the Court of Registration. Completion Time: 30 days
3) Registration in the NAV (the central tax office). Completion time: Immediate (15 days for Companies)
4) Social Security Registration. Completion time: 15 days
5) A local bank account
6) A local address

Additional Country Information:

Formation of a Company
In order to establish a company in Hungary, you may have to choose among the various types of companies. There are many forms of companies and you must decide, based upon your particular situation, which form of company is best for your business. Briefly, the types of companies fall into two categories:

– Partnerships
– Companies with limited liability

In respect to partnerships, at least one member of the company is liable for the debts of the partnership with his/her whole property. There is no minimum capital requirement for a partnership.

The owner of any limited liability company is liable only to the extent of his/her business share of the company’s capital. A limited liability company may be formed by one person. The minimum capital requirement is 3,000,000 Forints.

However, legal documents required to form the limited company must be prepared and countersigned by an attorney, the entity must be registered and a publication fee is imposed. The total expense (costs, fees and capital requirements) may be in excess of 8,000 US Dollars. You must also establish a firm name of the company that has to contain a reference to the scope of activity of the company. For example, you may want to call your company X and Y Distribution, Kft. It is strictly forbidden to include Amway in the corporate name.

A business entity is required to register for income and Value Added Tax (VAT) purposes within 15 days of formation. A newly founded business entity is to be registered with the Social Security as well.

The next step is for a representative of the company to notarize his/her signature. This is called a specimen signature and is necessary for further registration of the company. The Contract of Association, together with the specimen signature and other documents all must be submitted to the Court of Registration for incorporation of the company.

As of this date, no foreign investment approval is necessary for a foreigner to establish a company in Hungary. The capital paid by the foreigner may be kept in a convertible currency account under his Hungarian company’s name. Again, as previously mentioned, because the laws are changing so rapidly in Hungary, it is recommended that legal counsel be obtained.

Immigration
In the case of establishing a second business in Hungary, it is recommended that a residency permit be obtained which is valid for one year. The residency permit is granted by the Ministry of Interior and takes approximately three to four weeks to obtain.

As a general rule, as an owner of the Sole Proprietorship or manager of the company, you do not need a work permit. On the other hand, if the owner is obliged (such as if the company is a Limited Partnership and the owner is the party with unlimited liability) or wishes to take part in the operation of the company, in other words, managing the company, a work permit is required. If, however, you are not the owner of the company, but merely an employee of the company, then a work permit is required. The work permit is issued by the relevant department in charge of labor relations of the local government, city or municipality of the territory where the work takes place and is valid for a period of one year and is renewable.

Licensing and Tax Considerations
Hungarian citizens and foreigners alike may operate distributorships either in the form of Sole Proprietorship (private entrepreneurs) or as a separate business entity, such as a Limited Liability Company, or Limited Partnership. However, foreigners must obtain a work permit as a precondition.

If an Amway Partner intends to be a Business Owner, as a private entrepreneur (Sole Proprietorship) the Business Owner is required to obtain a Private Enterprise license which is issued for a nominal fee by the Trade Office of the applicant’s local municipal council. The Business Owner may not begin regular business activity (such as reselling product) until he has the license in hand.

A private entrepreneur must also register with tax and Social Security authorities within fifteen days of obtaining the license.

A business enterprise (citizens and foreigners) is not required to obtain any specific licenses to operate the Distributorship.

A business entity is required to register for income, Value Added Tax (VAT) and Social Security purposes within 15 days of formation.

All Business Owners may be obliged to pay social security tax based upon income earned from their Amway business, based upon their or their own company’s status.

how to order

Ordering

Starter Kits:(including Amway Application form)
Starter Kits may be purchased from the foster sponsor. If a foster sponsor is needed, contact Customer Service:
– Phone: (36-1) 777-7667
– Fax: (36-1) 345 1390

For Pin code information, please see How to Manage – Access Information section.

– Amway online webpage:  www.amway.hu

– Amway Business Owners and Member Plus status can now place orders through www.amway.hu
– Delivery is made by mail and the customer is responsible for paying the price for this service along with transport costs to the supplier.

Payment Methods

– Postal draft
– Online credit card
– Bank transfer
– Direct debit
– Cash On Delivery
– PayPal

For cash on delivery orders:
-Write cash on delivery on your order form
-Parcels can only be paid for in cash (the Post Office does not accept payment by credit card)
-Parcels will be delivered free of charge above the limit of 30.000 HUF order amount in case of cash on delivery payment method, and 25.000 HUF in case of credit card and paypal payment methods. The same applies to single and group orders.
-Not delivered by commercial but ordinary postal parcels
-No postal combination order can be excuted
-PV/BV credit for Temporarily Not Available (TNA) products will not be issued

Returns/Refunds
Starting Kit returns will be accepted 90 days from date of application submission depending on contents of returned Starting Kit.

Products may be returned under the Customer Satisfaction Guarantee policy. The Pan European Return procedure is followed in Hungary. This procedure follows the provided information below:
– Price of return: Amway Business Owner cost
– Required documentation: Invoice (or invoice number in countries where this is legally acceptable) and the Statement of return reasons (except Austria where this is legally not possible). Other documentation such as bill to customer will be optional since the satisfaction guarantee covers the Amway Business Owner who uses the products as consumers.

how to manage

Access Information

– In person at Hungary Office:
5 days aweek
– Customer Service:
Phone: (36-1) 777-7667
Monday to Friday
9:00 to 17:00
Amway number (Amway Identification number) and pin code (5-digit number which has to be announced in writing before) required.

Pin codes can be obtained by:
– Amway Business Owners are automatically authorized with a code number (maximum 5 digits) and need to request this information from Amway Hungary (requests can be sent via mail, fax or by phone)

– Pin codes are sent registered mail to the inquiring Amway Business Owner
– New Platinum Amway Business Owners receive Amway PIN codes automatically with their congratulation letter
– Amway Business Owners may change change the PIN code at any time

Receive Bonus Payment
All Amway Business Owners receive the monthly Performance Bonus directly from Amway by bank transfer or accounts receivable credit. (Amway Business Owners must provide to Amway proof of their trade license (PEL). Bonuses that have been held in escrow will be paid upon receipt of proof of the PEL.)

Renew
Please note: Renewal is only necessary in one market for CLOS (Croatia, Slovenia, Slovakia, Czech Republic, Turkey, Poland, Romania, Hungary, Ukraine, Lativa, Lithuania, and Estonia)

Cost/Timing:
Regular Renewal
7.050 HUF (including 27% VAT)
September 1 – December 31

Late renewal
8.750 HUF (including 27% VAT)
January 1 – August 31

Renewal Methods:
Add Renewal to order and pay by bank transfer or postal draft. In case of late renewal can not add to order, only pay by bank transfer or postal draft

Payment Methods:
– Bank transfer
– Postal Draft

contact