What are Conditions for Cosmetics Manufacturing and Trading in Vietnam?

 

Cosmetic product is a substance or preparation that is used to contact parts of the outside of the human body (skin, hair system, nails, toenails, lips and outside of the genitalia) or teeth and oral mucosa with one or more of the following main purposes: cleaning, aromatic, changing the appearance, appearance, adjusting body odor, keeping the body in good condition. Investors in the field of cosmetics manufacturing and trading are not restricted under Vietnam’s commitments when joining the WTO. Therefore, investors are allowed to establish economic organizations with 100% foreign investment.

However, the field of cosmetics manufacturing and trading is a conditional business for foreign investors. After being granted an investment registration certificate and enterprise registration certificate, before conducting business activities, investors must meet the conditions to be allowed to operate. To produce cosmetics, investors need to apply for a certificate of eligibility for cosmetics production. In order to sell the cosmetics manufactured by the enterprise itself, investors need to meet the conditions for cosmetic product announcement, apply for a cosmetic product proclamation certificate before launching the product to the market. In addition, for trading cosmetic products, investors need to apply for a business license for retail goods.

In order to have a certificate of eligibility for cosmetics production, a cosmetics manufacturing establishment must meet the conditions on personnel, facilities and quality management system.

Regarding personnel, the person in charge of production must have specialized knowledge in one of the following specialties: Chemistry, biology, pharmacy or other relevant subjects to meet the requirements of the job.

Regarding the conditions of facilities, there should be locations, areas, workshops and equipment to meet the requirements of production lines and types of cosmetic products that such establishments are expected to produce as stated in the dossier of application for a certificate of eligibility for cosmetics production; storage of raw materials, packaging materials and finished products must ensure a separation between raw materials, packaging materials and finished products; have separate areas for storage of flammable and explosive substances, highly toxic substances, discarded, recovered and returned materials and products.

At the same time, the quality management system meets the following requirements: raw materials, auxiliary materials and semi-finished products used in cosmetic production must meet the manufacturer’s quality standards; water used in the production of cosmetics must at least meet national technical standards on drinking water promulgated by the Minister of Health; having production processes for each product; having a quality control department to check the quality of raw materials, semi-finished products, packaged products and finished products.

A dossier of application for a certificate of eligibility for cosmetics production comprises the following documents: an application for a certificate of eligibility for cosmetics production; floor plans and designs of production facilities; list of existing equipment of the manufacturer.

For cosmetic products proclamation, the dossier must include the cosmetic product proclamation report with the proclamation data (soft version of proclamation report). Complete cosmetic products at each different manufacturing company are individually announced.

In addition, investors conducting retail distribution of cosmetics need to apply for a business license. Foreign investors shall be granted a business license when having a financial plan in order to undertake the activities for which a business license is requested; and not having overdue tax debts if it has been established in Vietnam for one year or more. In addition, if the foreign investors belong to a country or territory which is a member of an international treaty of which Vietnam is also a member and which commits to open the market for goods trading and directly related activities, they need to satisfy the conditions on market access in the international treaty of which Vietnam is a member. If the foreign investor does not belong to a country or territory which is a member of an international treaty of which Vietnam is also a member, they must satisfy the following criteria: consistency with the provisions of specialized branch law; compatibility with the competitive level of domestic enterprises in the same operational sector; ability to create jobs for domestic workers; ability to contribute and level of contribution to the State budget. An application file comprises: request for issuance of a business license; explanatory document; data from the tax office proving that there are no overdue tax debts; copies of the enterprise registration certificate and of the investment registration certificate (if any) for the project of goods trading and directly related activities.

For the efficiency, it is recommended to seek advice from lawyers in Vietnam in the specialized fields for legal consultancy.

 

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