Establish a cosmetics business company in Vietnam

Nowadays, when people are increasingly interested in beauty, cosmetics are indispensable items, especially for women. Therefore, the cosmetics business market is increasingly growing and attracting business investors. What should investors consider when establishing a cosmetics business? In this article below, Viet An Law will analyze the keynote for investors to establish a cosmetics business company in Vietnam according to the law.

Legal basis

• Law on Enterprise 2020.
• Law on Investment 2020.
• Decree 01/2021/ND-CP on business registration.
• Decree 31/2021/ND-CP details the Investment Law.
• Decree 52/2013/ND-CP on e-commerce, as amended and supplemented by Decree 08/2018/ND-CP, Decree 85/2021/ND-CP;
• Circular 06/2011/TT-BYT of the Ministry of Health regulating cosmetic management, as amended and supplemented by Circular 29/2020/TT-BYT.

General​ information on the cosmetics business

According to Article 2 of Circular 06/2011/TT-BYT, as amended and supplemented by Circular No. 29/2020/TT-BYT, a cosmetic product is a substance or preparation used to come into contact with external parts of the human body (skin, hair system, fingernails, toenails, lips and external genitalia) or teeth and oral mucosa whose main purpose is to clean, scent, change appearance, form, regulate body odor, protect the body or keep the body in good condition.

A cosmetic business company is understood as a type of business established according to legal regulations to conduct business activities for cosmetic products.

When establishing this type of company, the following legal procedures need to be carried out:

• Procedures for applying for Investment Registration Certificate (for foreign-invested enterprises);
• Procedures for applying for an Enterprise Registration Certificate;
• Procedures for announcing cosmetic products.

Procedures for applying for Investment Registration Certificate

Cosmetics company is a company established in Vietnam by foreign investors (FDI). Because it is an investment project of a foreign investor, before carrying out procedures such as establishing a domestic enterprise, the enterprise needs to carry out procedures to apply for an Investment Registration Certificate.

The procedure is prescribed in the Investment Law 2020 and specifically guided in Decree 31/2021/ND-CP. Specifically:

Dossier components

• Written request to implement the investment project, including a commitment to all costs and risks if the project is not approved;
• Documents on the investor’s legal status;
• Documents proving the investor’s financial capacity;
• Proposed investment project. In cases where the law on construction stipulates the preparation of a pre-feasibility study report, the investor may submit a pre-feasibility study report instead of the investment project proposal;
• Content explaining the technology used in investment projects for projects subject to appraisal and consultation on technology according to the provisions of the law on technology transfer;
• Other documents related to the investment project, conditions, and capacity requirements of the investor according to the provisions of law (if any).
• Power of Attorney for Viet An Law.

Authority to issue License

According to the provisions of Article 39 of the Investment Law 2020, the authority to issue Investment Registration Certificates is the Department of Planning and Investment for foreign-invested companies implementing investment projects outside industrial parks and processing zones, export, high-tech zones, and economic zones.

The order of execution

• Before carrying out the procedures for granting the Investment Registration Certificate, the investor declares information about the investment project online on the National Information System on Foreign Investment. Within 15 days from the date of online declaration, the investor applies an Investment Registration Certificate to the Investment Registration Authority.
• The investor submits 01 set of application documents for an Investment Registration Certificate to the investment registration agency. In case the investment project is implemented in multi-provincial administrative units, the investor submits documents to the Department of Planning and Investment of the province where the investor implements the project, or plans to set up an executive office to apply for an Investment Registration Certificate.
• The investment registration agency issues an Investment Registration Certificate to the investor within 15 days from the date of receipt of valid documents when the project meets the conditions.

Procedures for applying for an Enterprise Registration Certificate

Currently, the law does not have specific regulations on the type of business when establishing a cosmetics business. Thus, it is possible to establish a company in the form of a joint stock company, limited liability company, partnership company, or private enterprise. Procedures for establishing a business are carried out according to the provisions of the Enterprise Law 2020 and Decree 01/2021/ND-CP, specifically as follows:

Step 1: Prepare business registration documents.

The registration dossier to establish a cosmetics business company includes the following documents as prescribed in Decree 01/2021/ND-CP:

• Application for business registration.
• Company charters.
• Members list of members for multiple-member limited liability companies; List of founding shareholders and list of shareholders who are foreign investors for joint stock companies.
• Copies of legal documents of organizations and individuals who are members/shareholders of the company; Legal documents of the individual for the authorized representative and document appointing the authorized representative.
• Investment registration certificate in case the enterprise is established or participates in the establishment by foreign investors or economic organizations with foreign investment capital according to the provisions of the Investment Law.

Step 2: Submit a business registration application.

After preparing the documents, the company founder or authorized person submits the documents to the business registration agency where the enterprise is headquartered in the following method:

• Register your business directly at the Business Registration Office;
• Register your business via postal service;
• Register your business via an electronic information network.

Step 3: Competent authority receives and processes documents.

• After receiving the business registration application, the Business Registration Office issues a Receipt of receipt of the application to the applicant.
• After giving the receipt of the application, the Business Registration Office fully and accurately enters the information in the business registration application, checks the validity of the application, and downloads the digitized documents in the business registration dossier in the National Business Registration Information System.
• Enterprises are granted an Enterprise Registration Certificate when they meet all the conditions prescribed in Clause 1, Article 27 of the Law on Enterprises. The Business Registration Office issues the Enterprise Registration Certificate in the National Business Registration Database within 03 working days from the date of receipt of valid documents.

Step 4: Publication of the business registration content

After being granted an Enterprise Registration Certificate, an enterprise must make a public proclamation on the National Business Registration Portal within 30 days from the date of publication. Enterprises pay the fee and send a request for publication of enterprise registration contents to the Business Registration Office where the enterprise is registered.

Step 5: Carve the company sign

Currently, after engraving the seal, the company manages the seal itself without having to carry out the procedures for posting the seal proclamation as before. The Company reserves the right to engrave multiple seals without any restrictions. Business seals only need to ensure uniformity in form and contain the name and business code information.

Step 6: Carry out procedures after being granted a License

• Hang signs at company headquarters;
• Notice of application of tax calculation method;
• Open a business bank account, register 08 bank account forms with the tax authority, and register for electronic tax payment;
• Register for an electronic digital signature to pay taxes electronically;
• Print and order invoices;
• Declare and pay license tax.

Cosmetics proclamation procedures

According to regulations, cosmetics are only allowed to be put into circulation when the competent state management agency has issued a receipt number for the Cosmetic Product Proclamation and must take full responsibility for safety effectiveness, and product quality. Procedures for obtaining a cosmetic product proclamation form are carried out according to the instructions in Circular 06/2011/TT-BYT, as amended and supplemented by Circular No. 29/2020/TT-BYT, specifically:

Dossier components

• Cosmetic Product Proclamation Form (02 copies) accompanied by proclamation data (soft copy of proclamation form);
• Original or duly certified copy of Power of Attorney from the manufacturer or product owner authorizing the organization or individual responsible for bringing the product to market to distribute cosmetic products in Vietnam.
• Certificate of free sale (CFS) for imported cosmetic products.

Authorization

• For imported cosmetics: Organizations and individuals responsible for bringing products to market submit cosmetic product proclamation documents at the Drug Administration – Ministry of Health.
• For domestically produced cosmetics: Organizations and individuals responsible for bringing products to market shall submit cosmetic product proclamation dossiers to the Department of Health where the production factory is located. Cosmetic products produced and packaged from imported semi-finished products are considered domestically produced products.

Implementation procedures

Step 1: Submit cosmetic product proclamation dossier.

Cosmetic product proclamation dossiers are made into 01 set, and submitted directly or by post to the competent state management agency.

Step 2: Receive and process documents.

• Within 03 working days from the date of receiving the valid proclamation dossier and the proclamation fee according to regulations, the competent state management agency is responsible for issuing the receipt number of the Cosmetic Product Proclamation Form.
• In case the published dossier does not meet the regulations, within 05 working days from the date of receiving the dossier, the agency receiving the dossier shall notify the publishing organization or individual in writing of the inconsistent contents to amend and supplement the dossier (specify the contents that have not been met).
• Within 03 months from the date of issuance of the notification document, if the competent state management agency does not receive additional documents from the organization or individual under whose name the proclamation is made, the proclamation document is no longer valid. In this case, if the organization or individual wants to continue publishing, they must submit a new application and pay a new fee according to regulations.

The cosmetic product proclamation receipt number is valid for 5 years from the date of issue. At the end of the 5 years, organizations and individuals that want to continue bringing cosmetic products to market must re-announce them before the cosmetic product proclamation receipt number expires.

Note

Currently, businesses with electronic sales activities are increasingly popular because of their convenience and ability to reduce business costs. However, for sales through setting up an e-commerce website, it is necessary to note that it meets the conditions according to Article 52 of Decree 52/2013/ND-CP:

• Be a trader, an organization with appropriate functions and tasks, or an individual who has been granted a personal tax code;
• Notified the Ministry of Industry and Trade about setting up an e-commerce website for sales according to regulations.

Legal services of Viet An Law

• Legal advice on documents, procedures, and licenses for cosmetics business in Vietnam;
• Drafting documents, records, and papers for establishing a cosmetics company in Vietnam;
• Representing clients, conducting procedures at state agencies to obtain a License for cosmetics business in Vietnam;
• Regular legal advice for businesses after they are established.

Clients who need advice to establish a cosmetics business company in Vietnam, please contact Viet An Law Firm for the most effective support!