Set up a cosmetic business in Vietnam

The increasing demand for beauty has led to the appearance of many types of beauty and skincare products on the market today, and profits from the cosmetics business are increasing. Grasping that trend, many individuals or organizations are eager to establish cosmetics trading companies. So, what are the conditions for establishing a cosmetics company? To answer clients’, Viet An Law Firm provides an article on conditions to set up a cosmetic business in Vietnam.

Legal basis

• Civil Code 2015.
• Law on Investment 2020.
• Law on Enterprise 2020.
• Decree 93/2016/ND-CP regulates cosmetic production conditions.
• Circular 47/2019/TT-BTC regulates the rates, collection, payment, management, and use of fees for providing business information and business registration fees.

Cosmetic company in Vietnam

A cosmetic company is a type of business specializing in the production, sales, and distribution of care and beauty products such as cosmetics, skincare, and other related products.

Conditions to set up a cosmetic business in Vietnam

According to the provisions of the Investment Law 2020, to establish a cosmetics company in Vietnam, foreign investors will have to have an investment project and be granted an Investment Registration Certificate in Vietnam.

Investment conditions for foreign investors are conditions that require foreign investors when carrying out investment activities, it is required to meet investment conditions in conditional investment sectors as prescribed in international treaties on investment, relevant laws, ordinances, and decrees. Accordingly, importing and distributing products is an investment field that Vietnam has committed to open when joining the WTO. In case investors from countries and territories join the WTO, they will be allowed to do cosmetic business in Vietnam.

In addition, in the case of only trading in cosmetics (not manufacturing) but only importing for resale, this is not a conditional business. So, clients only need to meet the conditions for establishing a business to be able to do cosmetics business in Vietnam. In the case of cosmetic production, this is a conditional business. Accordingly, both foreign and domestic investors will have to fully meet the following conditions:

Conditions on business type and business name

Depending on the type of business, when clients need to choose the type of business that suits the number of members, capital contributors as well as the business target capital ratio of your company.

Currently, enterprise law stipulates that there are common types of enterprises as follows:

• Private enterprise.
• (Single-member or multiple-member) Limited liability company.
• Joint stock company.

The name of a cosmetics company can also be in Vietnamese or a foreign language. If the name is in a foreign language, the name must be printed or written in a smaller font than the Vietnamese name at the company’s business locations. The name must not be identical or confusing to other companies that have been registered nationwide and must ensure at least two elements in the name: type of business and proper name.

Conditions on charter capital level

Based on the law on businesses, the cosmetics business is not subject to regulations requiring a minimum and maximum capital of the company. Therefore, cosmetic companies can freely choose the level of charter capital to establish this type of company.

Therefore, the choice of charter capital to register should be appropriate and correspond to the actual conditions of the company to be more convenient in doing business and to create the most optimal source of profit from the amount of capital.

In addition to the general conditions for establishing a business, clients wishing to establish a cosmetics company have to meet the following conditions:

 Conditions for the operation of cosmetic manufacturing establishments

• Cosmetics business must be legally established;
• Business establishments must have a certificate of eligibility to produce cosmetics according to Form No. 01 specified in the Appendix issued with Decree 93/2016/ND-CP.

Granting a Certificate of eligibility for cosmetic manufacturing

Accordingly, to be granted a Certificate of eligibility for cosmetic manufacturing, the facility must meet the following conditions:

Personnel conditions:

• The person in charge of the facility’s production must have specialized knowledge in one of the following majors: Chemistry, biology, pharmacy, or other related majors that meet the job requirements.

Facilities conditions:

• Have a location, area, factory, and equipment that meet the requirements for production lines and types of cosmetic products as stated in the application for a Certificate of eligibility for cosmetic manufacturing.
• Regarding storage of raw materials, packaging materials, and finished products, there must be a separation between raw materials, packaging materials and finished products.
• In addition, cosmetic manufacturing facilities must have a separate area to store flammable and explosive substances, highly toxic substances, rejected, recalled, and returned raw materials and products.

Meet the following quality management system conditions:

• Raw materials and auxiliary materials used in cosmetic production must meet the manufacturer’s quality standards.
• Water used in cosmetic production must at least meet national technical standards on drinking water issued by the Minister of Health.
• Semi-finished products put into production must have quality standards and meet the manufacturer’s quality standards.
• There is a production process for each product.
• There is a quality control department to check the quality of raw materials, semi-finished products, products awaiting packaging, and finished products.
• Have a document storage system.

Some questions related to set up a cosmetic business in Vietnam

How long does establishing a cosmetics company procedure take?

When preparing and completing the application submission at the Business Registration Office, the normal time to establish a cosmetics company will be 3-5 working days from the date of receiving all valid documents, and clients will receive an enterprise registration certificate. However, in reality, it may take clients about 1-2 weeks depending on whether your application is valid or not. Therefore, for convenience and speed in establishing a cosmetics company, clients can use the company establishment service at Viet An Law.

Fees for establishing a cosmetics company

According to the provisions of Circular 47/2019/TT-BTC, when registering to establish a cosmetics company, clients will have to pay several fees as follows:

• Cost to submit business registration documents at the business registration office of the Department of Planning and Investment: 50,000 VND (fifty thousand VND).
• Cost of publishing business registration content on the National Business Registration Portal: 100,000 VND (one hundred thousand VND).

In addition, when establishing a cosmetics manufacturing and trading company, clients will have to pay additional fees as follows:

• Cosmetic product proclamation fee: 500,000 VND (five hundred thousand VND)/ dossier.
• The fee for assessing cosmetic production conditions and issuing a Certificate of eligibility for cosmetic production is 6,000,000 VND (six million VND)/facility.

Does a foreign-invested cosmetic company intending to retail cosmetics need to apply for any license?

In this case, the company needs to carry out procedures to apply for a Business License and a Retail Establishment License. In addition, if the company directly imports cosmetics, it is necessary to carry out procedures for proclaiming the circulation of imported cosmetics.

Clients who want to learn more information about the conditions to set up a cosmetic business in Vietnam, please contact Viet An Law Firm for our best support!