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There are a lot of affiliate programs out there that pay 2 tier as far as I know.

To whom are you referring when you say "they"? If it's the FTC, then I believe that having the additional tier will make it an MLM company only if it was a network marketing company in the first place. There's a lot of confusion and misunderstanding about this point (but much of it from people who imagine that the terms "network marketing" and "MLM" are synonymous, which they're most certainly not).

Different countries have different laws and regulations about this.

But in North America, all of Europe, the Far East and the other English-speaking countries of whose regulations I'm aware, the principle is that an MLM company is a network marketing company in which the commissions payable to distributors on the sales of the company's products/services are divided between more than one level. (There are, of course, other network marketing companies in which they're not).

I think it can be a great incentive to some people.

It does, however, mean that you need specialist legal advice, right from the start (and it normally means that you can't use PayPal, of course, which is a drawback to some people).