Obligations of Cosmetics Manufacturers and Importer in Vietnam

Cosmetics lawyers inVietnam

The cosmetics manufacturers and importers who are responsible for putting cosmetic on the market have the obligations as the following:

-Be responsible for all contents declared in the cosmetic product proclamation report, for the safety, the efficiency, and the quality of the product; and guarantee that the circulated products satisfy all requirements of the ASEAN Cosmetic Treaty and the Appendix of Vietnam law;

-Follow, discover, and confiscate immediately the unqualified cosmetic, as well as implement the confiscation announcement from the state authority office and inform to the state authority office about the confiscation; punctually deal with the consumer’s complaints of the cosmetic’s quality and compensate for consumer’s loss in accordance with the regulation; refund to the buyer the produced cost in the maintenance, transportation, and circulation process;

-Report to the Medicine Management department – the Health Ministry within 07 days since the date receiving the first feedback from this side-effect in case finding side-effects which are serious and could damage the consumer’s life because of the cosmetic product’s quality;

-File the Product Information File (PIF) in at least 03 years since the latest manufacture lot is put on the market and presented to the checking and inspecting functional office when requested;

-Obey the Vietnamese Regulation and Law on the intellectual ownership. When having the conclusion of the state competent offices on the intellectual-ownership law-breaking label and industrial design, the organizations, the individuals must stop manufacturing, trading, and importing in order to conduct of changing the label and the industrial design as provided, and be responsible for refunding and resolving all damages (if any).

Besides, Vietnam law also provides that the organizations which manufacture the cosmetic must deploy to apply and satisfy principles, the “cosmetic good manufacturing practice” standard of the Asian Southeast Association Nations (CGMP-ASEAN).

Last but not least, the organizations, the individuals must conduct requirements of state competent offices about checking and inspecting the cosmetic quality, confiscating the violated cosmetics, and be entitle to complaints about the conclusion and the law-breaking judgment form in accordance with the law regulation on the complaint and the denouncement.

This publication is designed to provide updated information of legal matters, and does not constitute professional advice.

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Mandatory Announcement of Cosmetic Product

Business owners being organizations and individuals responsible for launching cosmetic products on the market are only allowed to put into circulation when the competent state agencies approve and the business owners must bear full responsibility for the safety, efficiency and product quality. Competent state agencies will conduct post-trade test when the products are being sold to the market.

Cosmetics lawyers inVietnam

Cosmetics are substances or preparations used in contact with the external parts of the human body (skin, hair, nails, lips and external genital organs) or the teeth and oral mucosa with the main purpose is to clean, perfume, change appearances, form, adjust body odor, or protect body or to keep the body in good condition. The following will provide conditions and list of cosmetic types subject to mandatory annoucement.

1. Conditions to apply:

– Organizations and individuals responsible for launching the product into circulation on the market must have function to doing cosmetics business in Vietnam

– The announcement of the features of cosmetic products (intended use of the product) must satisfy the ASEAN guidelines on disclosure features of cosmetic products

2. Kinds of cosmetic that have to announce the distribution of cosmetics:

Kinds of cosmetic products must disclose the circulation of cosmetic products:

– Cream, emulsion, lotion, gel and oil for skin (hand, face, feet)

– Face mask (with the exception of chemistry peeling products)

– Tinted (liquid, paste, powder)

– Makeup powder, after shower powder, toilet powder

– Bath soap, deodorant soap

– Perfume, toilet perfume

– Products for bath or shower (salt, foam, oil, gel)

– Hair removal products

– Deodorants and anti-perspirants

– Shaving products (cream, foam, lotion)

– The makeup and makeup remover products for face and eyes

– Products used for lips

– Products for take caring teeth and mouth

– Products for nail care and adorn

– The products used to clean the outside

– Sun cream products

– Products for tanning without sun

– Skin whitening products

– Anti-wrinkle products

– Other products

Some products which are not classified as cosmetics:

Anti-mosquito products, air freshener, fabric softener, bleach, toilet, oxygen liquid, antiseptic alcohol 700, alcohol 900, denture cleaning products that are not exposed to the oral cavity, fake eyelashes, liquids to take care of eyes/nose/ears, against nasal congestion product, anti-snoring products, vaginal lubrication gel, ultrasound gel, the product in contact with the genital, rectal enema, anesthesia , reduce/control the swelling/edema, dermatitis treatment, allergy relief, anti-fungal, anti-virus products, stimulate hair/eyelash growth, the product removed/reduced fat/ reduced body size, weight loss products, prevent/stop hair growth products, stop sweating process, permanent tattoo ink, remove keloid scars reduction products, wound cleaning products.

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Overview on Cosmetics Regulations in Vietnam

Cosmetics are areas of highly regulated in Vietnam as they apply on human and could create health concern. Hence, cosmetics imported into Vietnam have to be applied special procedures to ensure safety. Cosmetics regulations in Vietnam would lay out provisions that importers and manufacturers to follow.

Cosmetics lawyers inVietnam

To carry out the Combination Convention in the cosmetic management which has been signed by countries are member of the Association of Southeast Asian Nations on September 2nd, 2003 (commonly called ASEAN Cosmetic Convention), the Ministry of Health of Vietnam issued Circular 06/2011/TT-BYT on Cosmetic Management.

The Circular dated January 25th, 2011 regulating the management of cosmetic products manufactured in the country, as well as cosmetics imported for circular in Vietnam. Besides, the cosmetic regulations is also provided in related provisions.

According to the Vietnam cosmetic regulations, cosmetic product must be construed as a substance or a preparation which is used for touch with outside parts of human body (skin, hair system, finger nails, toenails, lip, and outside reproduction organ) or teeth and mouth mucous membrane with main purpose in order to cleanse, aromatize, change the outward characteristics, form, adjust body’s smell, safeguard body, or maintain the human body in good condition. In addition to the products being grouped as cosmetic products such as: creams, emulsion, lotions, gels and oils for skin (group 1); tinted bases (group 2); toilet soaps, deodorant soaps (group 3); … some products are not classified as cosmetic.

Under Vietnam law, a cosmetic product made in Vietnam or imported into Vietnam must go through procedure of proclamation before being is sold on the market. In particular, organizations or individuals circulating the cosmetic products on the market have to be responsible for obtaining permissions through cosmetic product proclamation from authority agencies as well as responsible for safety, effectiveness, and quality of product.

For exporting cosmetic, the exporter needs to obtain the Certificate of Free Sale (CFS) as regulated. CFS is issued when such domestic cosmetic is issued the cosmetic product proclamation receipt number by competent state management agency. For importing cosmetic, enterprises are only allowed to import the cosmetic into Vietnam when presenting to the Customs agency the valid receipt number of cosmetic product proclamation report which has been issued by the Medicine Management Department – the Health Ministry. However, Vietnam law also provide import of cosmetic in some special situations which are not obligated to implement the cosmetic product proclamation as the following:

– Organization or individual who imports cosmetic in order to study and experiment;

– The organizations, individuals who receive cosmetic as gifts;

– The organizations, individuals who import cosmetic for displaying at fair, gallery and other temporary import for re-export situations.

For manufacturing cosmetic, the cosmetic regulations require the organizations which manufacture the cosmetic must deploy to apply and satisfy principles, the “cosmetic good manufacturing practice” standard of the Asian Southeast Association Nations (CGMP-ASEAN).

Besides, compliance with the other requirements such as labeling, safety of ingredients, cosmetic advertising is also required.

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Definition and Classification of Cosmetics in Vietnam

The definition of cosmetic in Vietnam regulations is currently compatible with the definition of ASEAN Cosmetic Convention provided in Article 2.1 of Schedule B of ASEAN Cosmetic Directive. Accordingly, cosmetic product is a substance or a preparation which is used for touch with outside parts of human body (skin, hair system, finger nails, toenails, lip, and outside reproduction organ) or teeth and mouth mucous membrane with main purpose in order to cleanse, aromatize, change the outward characteristics, form, adjust body’s smell, safeguard body, or maintain the human body in good condition.

Cosmetics lawyers inVietnam

For the classification of cosmetic, under the current Vietnam regulations, the criteria for the classification of cosmetic products based on the features, uses, recipe ingredients, route of administration of the product and the definition of cosmetic. Namely, beauty products are classified into 20 groups of products as the following:

-Creams, emulsions, lotions, gels and oils for skin (hands, face, feet, etc.)

-Face masks (with the exception of chemical peeling products)

-Tinted bases (liquids, pastes, powders)

-Make-up powders, after-bath powder, hygienic powders, etc

-Toilet soaps, deodorant soaps, etc.

-Perfumes, toilet waters and eau de Cologne

-Bath or shower preparations (salts, foams, oils. gels, etc.)

-Depilatories

-Deodorants and anti-perspirants

-Hair care products include: hair tints and bleaches, products for waving, straightening and fixing, setting products, cleansing products (lotions, powders, shampoos), conditioning products (lotions, creams, oils), hairdressing products (lotions, lacquers, brilliantines)

-Shaving product (creams, foams, lotions, etc.)

-Products for making-up and removing make-up from the face and the eyes

-Products intended for application to the lips

-Products for care of the teeth and the mouth

-Products for nail care and make-up

-Products for external intimate hygiene

-Sunbathing products

-Products for tanning without sun

-Skin whitening products

-Anti-wrinkle products

Besides, some products are not classified as cosmetic as the following:

-The product permanently adjust, restore or alter the function of the body by the immune mechanism, metabolic or pharmacological mechanism

-Products sweetened oral, injection or contact with other parts of the body (i.e. the nasal mucous membranes, genitals in, …)

-The mosquito, air fresheners, fabric softeners, water, toilet bowl cleaner, liquid oxygen aging, alcoholic antiseptic 70 0,90 0 alcohol, product Clean dentures are not exposed to the oral cavity, false eyelashes, eye cleaning solution/nose/ear protection products nasal congestion, anti-snoring products, vaginal lubrication gel, ultrasound gel, the exposure in genital, rectal enema, anesthesia, reduce/ control the swelling/edema, dermatitis treatment, hypoallergenic, anti-fungal, anti-viral, stimulates hair growth products/grow eyelashes products removed/reduced fat/reduced fat/reduced body size, weight loss products, prevent/stop the growth of hair, the process stops sweating, permanent tattoo ink, product remove scars, keloids reduction, wound cleaning products.

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10 Questions to Ask Before Setting-up Company in Vietnam

Foreigners are encouraged to make investment in Vietnam through direct investment by Setting up company in Vietnam.

However there are restrictions in some cases in regard to investment capital, investment area, special licenses required. The investor is suggested to consult with a law firm in Vietnam for advice and service offering.

Before setting up business in Vietnam, ask yourself the following questions:

1. Which business should I invest in Vietnam?

There are non-conditional investment areas and conditional investment areas. Establishing company in the non-conditional investment areas are more simple than in conditional investment areas. Investment in IT services, manufacturing, management consulting, business promotion are a few samples of non-conditional investment areas. Example of conditional investment areas are real estate, trading, travel agencies, freight forwarding…which are more complicated with investment conditions. Investment conditions might also be changed over the time depending on the WTO commitments which Vietnam enters.

2. What should I name the business in Vietnam?

The company in Vietnam has to have Vietnamese name, and English name. The company could also have abbreviated name. The name of the company in Vietnam indicates the structure of the company, the business lines, and the name that differentiate against other businesses. For instance, the company could be named Alpha consulting limited liability company.

3. Where should I register the address of the business in Vietnam?

Not every address could be used to register a company. The address has to be an address of a house with leasing agreement or office building which owner has license to operate as office building.

4. What is the legal structure of the company?

Depending on the number of investor contributing capital, company could be set-up as one member limited liability company or two ore more member limited liability company or joint stocks company.

5. How much capital is required to set-up a company in Vietnam?

The investment amount depends on the business plan and is subject to the approval of the provincial Department of Planning and Investment evaluating application dossier. In some business areas like real estate, banking and finance, minimum capital is required. In general for non-conditional investment area, the law does not specify the minimum capital to establish a company in Vietnam however the State agencies that evaluate investment plan could reject the investment project which are not feasible. Bank statement in foreign banks could be used to prove sufficient fund of investment capital.

6. Whom will be legal representative and work permit in Vietnam?

The investor will need to appoint the legal representative in Vietnam to oversee the business performance and take legal responsibility in Vietnam. If the legal representative is an expatriate, whom is a capital contributing member or owner of a limited liability company or a member of the Board of Management of a shareholding company which is registered to operate in Vietnam, he or she will be exempted from work permit in Vietnam. Otherwise, he or she will need to have a work permit to work in Vietnam legally. The work permit holder would then apply for temporary residence card to live in Vietnam as long as the work permit allows.

7. How long does it take to set-up a company in Vietnam?

It depends on what type, scale, and whether or not conditions are required. For a simple minimum capital without conditions to set-up, it would take 30 working days. For setting up company in conditional investment areas i.e. trading company in Vietnam, time would be lengthen due to the involvement of a number of State agencies approving the investment project and it would take 60 working days. For setting up company in other investments in areas requiring conditions to meet, time might be taken depending on the type of conditions and the government agencies evaluating the conditions of investment.

8. Whom will be granting the investment license in Vietnam?

For most of the investment projects, the provincial state agencies with the approval of the Department of Planning and Investment (DPI) will be granting the Investment Certificate in Vietnam. However, depending on the type, scale, and whether or not conditions are required, other Vietnam State agencies might be involved. For the case of trading company, ministry of trade and commerce, ministry of finance, provincial people’s committee will be reviewing the investment application dossier as well.

9. What are the tax liability in Vietnam?

Major taxes in Vietnam are corporate income tax, import and export tax, value added tax, and personal income tax in Vietnam. In some special areas, there are other taxes. The corporate income tax is currently at 22% and will reduce to 20% beginning 2016. Export is mostly encouraged as such the export tax is 0 however there are special cases when export tax is larger than 0. Import tax varies according to tariff. Value added tax is mostly at 10% however in some cases, VAT could be 5% or 0%. Personal Income tax varies according to income level and is applicable from VND 9,000,000 above.

10. What are mandatory reports submissions requirement in Vietnam?

Companies are required to keep accounting books, prepare and submit tax reports on monthly, quarterly and annually. Foreign companies are also required to have financial audit taken before the financial year end. The financial year in Vietnam is from January to December and the deadline to submit financial report is March 30th for the previous year. Other reports are required to be submitted at other State agencies.

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Abolishing regulations on cosmetics management

The Government has promulgated the Decree No. 155/2018/ND-CP on amendments and supplements to certain regulations regarding investment and business requirements under the state management of the Ministry of Health.

The Decree abolishes regulations set forth in the Circular No. 06/2011/TT-BYT on cosmetics management as follows:

- Removing the duplicate copy of the Certificate of Business Registration of an organization or individual responsible to launch cosmetic products into the market from the application requirements for announcement of cosmetic products. 

- Removing the following documents from the application requirements for the certificate of conformance to ASEAN Cosmetic Good Manufacturing Practices:

+ Duplicate copy of the Business Registration Certificate or the Investment License.

+ Training program and assessment report of the “Cosmetic Good Manufacturing Practices” training internally held by a cosmetic business. 

+ List of cosmetic products in process or in the process planning.

Additionally, the Decree No. 155 abolishes certain regulations on cosmetic manufacturing requirements prescribed in the Decree No. 93/2016/ND-CP dated July 1, 2016.

The Decree No. 155/2018/ND-CP will take effect on November 12, 2018.

Source: Thuvienphapluatvn

To set-up business in Vietnam, Please contact our lawyers in Vietnam for advice via email ant@antlawyers.vn or call our office at +84 28 730 86 529

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Definition and Classification of Cosmetics in Vietnam

The definition of cosmetic in Vietnam regulations is currently compatible with the definition of ASEAN Cosmetic Convention provided in Article 2.1 of Schedule B of ASEAN Cosmetic Directive. Accordingly, cosmetic product is a substance or a preparation which is used for touch with outside parts of human body (skin, hair system, finger nails, toenails, lip, and outside reproduction organ) or teeth and mouth mucous membrane with main purpose in order to cleanse, aromatize, change the outward characteristics, form, adjust body’s smell, safeguard body, or maintain the human body in good condition.

For the classification of cosmetic, under the current Vietnam regulations, the criteria for the classification of cosmetic products based on the features, uses, recipe ingredients, route of administration of the product and the definition of cosmetic.

Namely, beauty products are classified into 20 groups of products as the following:

• Creams, emulsions, lotions, gels and oils for skin (hands, face, feet, etc.)
• Face masks (with the exception of chemical peeling products)
• Tinted bases (liquids, pastes, powders)
• Make-up powders, after-bath powder, hygienic powders, etc
• Toilet soaps, deodorant soaps, etc.
• Perfumes, toilet waters and eau de Cologne
• Bath or shower preparations (salts, foams, oils. gels, etc.)
• Depilatories
• Deodorants and anti-perspirants
• Hair care products include: hair tints and bleaches, products for waving, straightening and fixing, setting products, cleansing products (lotions, powders, shampoos), conditioning products (lotions, creams, oils), hairdressing products (lotions, lacquers, brilliantines)
• Shaving product (creams, foams, lotions, etc.)
• Products for making-up and removing make-up from the face and the eyes
• Products intended for application to the lips
• Products for care of the teeth and the mouth
• Products for nail care and make-up
• Products for external intimate hygiene
• Sunbathing products
• Products for tanning without sun
• Skin whitening products
• Anti-wrinkle products

Besides, some products are not classified as cosmetic as the following:

• The product permanently adjust, restore or alter the function of the body by the immune mechanism, metabolic or pharmacological mechanism
• Products sweetened oral, injection or contact with other parts of the body (i.e. the nasal mucous membranes, genitals in, …)
• The mosquito, air fresheners, fabric softeners, water, toilet bowl cleaner, liquid oxygen aging, alcoholic antiseptic 70 0,90 0 alcohol, product Clean dentures are not exposed to the oral cavity, false eyelashes, eye cleaning solution/nose/ear protection products nasal congestion, anti-snoring products, vaginal lubrication gel, ultrasound gel, the exposure in genital, rectal enema, anesthesia, reduce/ control the swelling/edema, dermatitis treatment, hypoallergenic, anti-fungal, anti-viral, stimulates hair growth products/grow eyelashes products removed/reduced fat/reduced fat/reduced body size, weight loss products, prevent/stop the growth of hair, the process stops sweating, permanent tattoo ink, product remove scars, keloids reduction, wound cleaning products.

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