Setting up a company in Vietnam

[2025] Procedures for Establishing a Foreign-Invested Company for Cosmetic Production and Distribution in Vietnam

We are foreign investors planning to establish a cosmetic manufacturing plant in Vietnam and import goods from overseas into Vietnam for business purposes. We would like to inquire about the process and legal support.

Reply:

Thank you for your interest in DB Legal's services. Regarding your question, we respond as follows:

- Specific Commitments on Trade in Services WTO (GATS);

- Law on Investment No. 61/2020/QH14 dated June 17, 2020;

- Law on Enterprises No. 59/2020/QH14 dated June 17, 2020;

- Decree 93/2016/ND-CP dated July 1, 2016, providing for the conditions for cosmetic production, as amended and supplemented by Decree 155/2018/ND-CP dated November 12, 2018;

- Circular 06/2011/TT-BYT dated January 15, 2011, regulating cosmetic management;

- Decision No. 27/2018/QD-TTg dated July 6, 2018, on promulgating the Vietnam Standard Industrial Classification System

II. Scope of Activities of Cosmetic Production, Import-Export, Wholesale, and Retail in Vietnam:

1. What does cosmetic production include?

According to Decision No. 27/2018/QD-TTg dated July 6, 2018, on promulgating the Vietnam Standard Industrial Classification System, cosmetic production falls under industry code 20231, including the production of the following products:

20231: Manufacture of perfumes and toilet preparations

This group includes:

- Perfumes and toilet waters,

- Cosmetic and makeup preparations,

- Suntan and sun protection preparations,

- Manicure and pedicure preparations,

- Shampoos, hair lacquers and waving and straightening preparations,

- Dentifrices and oral hygiene preparations, including denture fixatives,

- Pre-shave, shaving and after shave preparations,

- Deodorants and bath salts,

- Depilatories.

2. What are the activities of cosmetic import-export and wholesale and retail?

According to Article 3 of Decree 09/2018/ND-CP detailing the Commercial Law and the Law on Foreign Trade Management on goods trading activities and activities directly related to goods trading of foreign investors and foreign-invested economic organizations in Vietnam ("Decree 09"):

The right to export is the right to purchase goods in Vietnam for export, including the right to be named on the export declaration to carry out and be responsible for export-related procedures. The right to export does not include the right to purchase goods from entities that are not traders for export, unless otherwise provided by Vietnamese law or international treaties to which Vietnam is a member.  

The right to import is the right to import goods from abroad into Vietnam for sale to traders with the right to distribute those goods in Vietnam, including the right to be named on the import declaration to carry out and be responsible for import-related procedures. The right to import does not include the right to organize or participate in the goods distribution system in Vietnam, unless otherwise provided by Vietnamese law or international treaties to which Vietnam is a member.  

Wholesale is the activity of selling goods to wholesale traders, retail traders, and other traders and organizations; excluding retail activities.

Retail is the activity of selling goods to individuals, households, and other organizations for consumption purposes.

Thus, based on the above provisions, the customer's cosmetic import-export, wholesale, and retail activities include:

  • Cosmetic export activities are the purchase of cosmetic products in Vietnam for export, including the right to be named on the export declaration to carry out and be responsible for export-related procedures. The right to export does not include the right to purchase goods from entities that are not traders for export, unless otherwise provided by Vietnamese law or international treaties to which Vietnam is a member;  

  • Cosmetic import activities are the import of cosmetic products from abroad into Vietnam for sale to traders with the right to distribute those goods in Vietnam, including the right to be named on the import declaration to carry out and be responsible for import-related procedures. The right to import does not include the right to organize or participate in the goods distribution system in Vietnam, unless otherwise provided by Vietnamese law or international treaties to which Vietnam is a member;  

  • Cosmetic wholesale is the activity of selling cosmetic products to wholesale traders, retail traders, and other traders and organizations; excluding retail activities

  • Cosmetic retail is the activity of selling cosmetic products to individuals, households, and other organizations for consumption purposes.

III. Market Access Limitations for Cosmetic Production, Import-Export, Wholesale, and Retail

For cosmetic production, import-export, wholesale, and retail activities, according to Vietnam's commitments in the Specific Commitments on Trade in Services WTO (GATS), commercial presence is unrestricted. Accordingly, foreign investors are allowed to establish economic organizations with 100% foreign-invested capital to conduct business in the aforementioned sectors.

However, the cosmetic production, import-export, wholesale, and retail sectors are conditional business sectors, so foreign investors need to fully meet the conditions to obtain an operating license.

IV. Conditions for Cosmetic Production:

1. Conditions for cosmetic production:

According to Decree No. 93/2016/ND-CP dated July 1, 2016, regulating the conditions for cosmetic production, the following conditions must be met:

(i) Personnel conditions: The person in charge of production at the facility must have specialized knowledge in one of the following majors: Chemistry, biology, pharmacy, or other related majors that meet the job requirements.  

(ii) Conditions on facilities:

(iii) Have a quality management system that meets the following requirements:

a) Have a location, area, factory, and equipment that meet the requirements for the production line and type of cosmetic product that the facility plans to produce, as stated in the application for a Certificate of Eligibility for Cosmetic Manufacturing;

b) The warehouse for storing raw materials, packaging materials, and finished products must ensure separation between raw materials, packaging materials, and finished products; have a separate area for storing flammable and explosive substances, highly toxic substances, rejected, recalled, and returned raw materials and products.  

c) Water used in cosmetic production must at least meet the national technical regulation on drinking water promulgated by the Minister of Health;  

dd) Have a quality control department to check the quality of raw materials, semi-finished products, products awaiting packaging, and finished products;  

a) Application form for a Certificate of Eligibility for Cosmetic Manufacturing;

b) Layout and design of the production facility;

c) List of existing equipment of the production facility;

V. Conditions for Cosmetic Distribution:

According to Clause 1, Article 3 of Circular No. 06/2011/TT-BYT dated January 25, 2011, on cosmetic management, "Organizations and individuals responsible for placing cosmetic products on the market are only allowed to circulate cosmetics after the competent state management agency has issued a receipt number for the cosmetic product declaration and must be fully responsible for the safety, effectiveness, and quality of the product. The competent state agency will conduct post-market inspections when the product is in circulation."

Based on this regulation, organizations and individuals responsible for placing cosmetic products on the market are only allowed to do so after the competent state management agency has issued a receipt number for the cosmetic product declaration and must be fully responsible for the safety, effectiveness, and quality of the product.

Cosmetic Product Declaration Dossier:

The cosmetic product declaration dossier includes the following documents:

1. Cosmetic product declaration form (02 copies) along with declaration data (soft copy of the declaration form);

2. Original or certified true copy of the Letter of Authorization from the manufacturer or product owner authorizing the organization or individual responsible for placing the product on the market to distribute the cosmetic product in Vietnam (applicable to imported cosmetics and domestically produced cosmetics where the organization or individual responsible for placing the product on the market is not the manufacturer). For imported products, the Letter of Authorization must be a copy with authenticated signature and consular legalized in accordance with the law, except in cases of consular legalization exemption under international treaties to which Vietnam is a member. The Letter of Authorization must meet the specified requirements.  

a) CFS exemption cases include:

- Cosmetic products manufactured in a member country of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) where the participation in this Agreement has been approved and is effective by the competent authority of that country (hereinafter referred to as a CPTPP member country);  

- Consular legalization is exempted under international treaties to which the Socialist Republic of Vietnam (hereinafter referred to as Vietnam) is a member or under the principle of reciprocity between Vietnam and the issuing country;

- The foreign diplomatic mission or the competent state management agency for cosmetics or the agency issuing the legal document of the CPTPP member country sends a document or email to the Drug Administration of Vietnam confirming the legal document;

- The enterprise responsible for placing the product on the market submits the self-searched result of the legal document from the English website of the agency issuing the legal document of the CPTPP member country with the enterprise's confirmation seal, accompanied by a document providing information on the search link to the Drug Administration of Vietnam. The enterprise is responsible before the law for the legality and accuracy of these documents and information and the enterprise's self-searched result;

- Cosmetic products that have been issued a receipt number for the cosmetic product declaration in a member country of the Association of Southeast Asian Nations (ASEAN): The enterprise responsible for placing the product on the market must submit the cosmetic product declaration issued in the ASEAN member country that has been consular legalized in accordance with the law, except where the cosmetic product declaration falls into one of the following cases:

  • Consular legalization is exempted under international treaties to which the Socialist Republic of Vietnam is a member or under the principle of reciprocity between Vietnam and the issuing country;
  • The foreign diplomatic mission or the competent state management agency for cosmetics or the agency issuing the cosmetic product declaration of the ASEAN member country sends a document or email to the Drug Administration of Vietnam confirming the cosmetic product declaration;
  • The enterprise responsible for placing the product on the market submits the self-searched result of the cosmetic product declaration from the English website of the competent management agency of the ASEAN member country issuing the receipt number for the cosmetic product declaration with the enterprise's confirmation seal, accompanied by a document providing information on the search link to the Drug Administration of Vietnam. The enterprise is responsible before the law for the legality and accuracy of these documents and information and the enterprise's self-searched result;

b) In addition to the CFS exemption cases specified in point a of this clause, the cosmetic product declaration dossier for imported products must have a CFS that meets the following requirements:

  • The CFS is issued by the competent authority of the producing country or the country exporting the cosmetic product to Vietnam and is still valid (original or certified true copy). If the CFS does not specify a validity period, it must be a copy issued within 24 months from the date of issue;
  • The CFS must be consular legalized in accordance with the law, except where the CFS meets one of the following regulations:
    • Consular legalization is exempted under international treaties to which Vietnam is a member or under the principle of reciprocity between Vietnam and the issuing country;
    • There is a document or email from the authority issuing the CFS or the foreign diplomatic mission to the Drug Administration of Vietnam containing confirmation of the CFS information;
  • The CFS must have at least the specified information

VI. Export of Cosmetics

The export of cosmetics is carried out at the Customs authority in accordance with current legal regulations and the requirements of the importing country.

Dossier and procedures for issuing a CFS for domestically produced cosmetics for export:

  • A written request for the issuance of a CFS clearly stating the product name, HS code of goods, product standard certification number or registration number, standard number (if any), ingredient composition (if any), importing country of goods: 1 original, in Vietnamese and English.
  • Investment certificate or business registration certificate, enterprise registration certificate: 1 copy with the trader's seal.  
  • List of production facilities (if any), including the name and address of the facility, products manufactured for export: 1 original.
  • Standard applied to the product, goods, accompanied by the method of presentation (on the product label or on the product packaging or accompanying documents): 1 copy with the trader's seal.

VII. Conclusion

Thus, foreign investors investing in the production, import, export, wholesale, and retail of cosmetics in Vietnam need to carry out the following procedures:

  • Step 1: Carry out procedures to apply for an Investment Registration Certificate;
  • Step 2: Carry out procedures to apply for an Enterprise Registration Certificate;
  • Step 3:
    • Submit a dossier to apply for a Certificate of Eligibility for Cosmetic Manufacturing;
    • Submit a dossier to apply for a Retail Business License;
    • Submit a dossier for cosmetic product declaration for imported cosmetics and a dossier for cosmetic product declaration for domestically produced cosmetics for cosmetic distribution activities;
    • Submit a dossier to apply for a Certificate of Free Sale (CFS) for domestically produced cosmetics for export.

The above is the advisory content of DB Legal related to your question. In case of further questions, please contact us.

 

The information contained in this article is general and intended only to provide information on legal regulations. DB Legal will not be responsible for any use or application of this information for any business purpose. For in-depth advice on specific cases, please contact us.

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