The Vietnamese cosmetics market is considered a high-potential sector in beauty and personal care, attracting increasing interest from foreign investors in recent years. With one of the fastest growth rates in the region, Vietnam’s cosmetics retail market is projected to have a Compound Annual Growth Rate (CAGR) of 3.32% from 2023 to 2027, reaching an estimated revenue of $2.69 billion by 2027. Many global luxury cosmetic brands have established retail distribution channels and official representative offices in Vietnam to expand their market presence. As of the first 11 months of 2024, Singapore is the largest supplier of cosmetics products to Vietnam with nearly $380 million, accounting for over 29% of the market share. South Korea ranks second with over $174 million, followed by China in third place with more than $140 million, representing a 10.8% market share[1].
Each imported cosmetic product in Vietnam must be classified under the appropriate Harmonized System (HS) code, particularly includes HS code 33.04 – ‘Cosmetics or makeup preparations and skin care products (excluding medicinal products), including sunblock or suntan preparations, and nail care products’ and HS code 34.01 – ‘Soap; organic surface-active products and preparations in bar, cake, or molded form, whether or not containing soap; skin cleansing products in liquid or cream form, packaged for retail sale, whether or not containing soap; and soap-impregnated or coated paper, wadding, felt, or nonwovens’, and considered the applicable taxes applied, including Import tax and Value-added tax (VAT).
However, Vietnam is strengthening its global competitiveness by actively engaging in multiple free trade agreements (FTAs). Depending on their country of origin, investors can take advantage of tax incentives provided under these agreements to optimize their business operations. FTAs have significantly enhanced Vietnam’s appeal to foreign investors by substantially reducing or even eliminating tariffs. Notably, the European Union – Vietnam FTA (EVFTA) is progressively lowering special preferential import duties each year, targeting a 0% rate by 2027.
| HS Code | Import tax | VAT[2] | ||
| Ordinary[3] | Preferential[4] | Special preferential (EVFTA)[5] (2025) | ||
| 33.04 | 15% to 33% | 10% to 22% | 2.5% to 6.2% | 10% |
| 34.01 | 25.5% to 40.5% | 17% to 27% | 5% to 6.7% | 10% |
To officially enter Vietnam’s cosmetics market, foreign investors can either establish a representative office or set up a company. Additionally, they must comply with all required conditions and obtain relevant sublicenses to operate in the industry legally.
Foreign investors can enter by first establishing an RO of their companies (“parent company”) to conduct market research and introduce their products to local customers. To do so, they must obtain an RO Establishment License by submitting an application dossier to the Department of Industry and Trade, with the processing time, as stipulated by law, is 10 working days.
Vietnamese law requires that the parent company must have been in operation for at least 1 year and its Enterprise Registration Certificate (ERC) must remain valid for at least 1 year if a business duration is specified[6].
Note:
– Duration of an RO Establishment License: 05 years (not exceed the duration of the parent company’s ERC) and can be renewed for a period equal to the first license’s duration[7];
– The RO is not permitted to conduct profit-generating business activities. Its functions are limited to acting as a liaison office, conducting market research, and facilitating trade promotion[8].
Foreign investors typically establish a trading company (“Company”) in the Limited Liability Company form – an independent entity with full control and limited liability within the scope of the contributed capital, to engage in the importation and sale of cosmetic products in the country, by two key steps:
Step 1. Obtaining the Investment Registration Certificate (IRC)
Step 2. Obtaining the Enterprise Registration Certificate (ERC)
The Company shall register specific business lines[9] to include all the activities that the Company will perform, such as:
Notably, the Company’s charter capital must be fully contributed within 90 (ninety) days of the ERC’s issuance.
Although cosmetic trading is not a conditional business sector for foreign investment, the Company must still meet the necessary legal requirements and obtain the required sublicenses to operate and contribute legally.
The Company must follow the procedures below:
| Subject | Procedure | Detail |
| The Company | Obtaining Retail License (Giấy phép bán lẻ) or Retail Establishment License (Giấy phép lập cơ sở bán lẻ)[10] *only in the case of retailing | The Company shall submit dossiers to the Department of Industry and Trade to obtain the Retail License to distribute retail and the Retail Establishment Licenseto set up a retail outlet, if: Meeting market access conditions;Having a financial plan to support retail activities;Having no overdue tax debts, if operating in Vietnam for over one year. |
| Cosmetic Product | Cosmetic Product Notification (CPN) (Công bố sản phẩm mỹ phẩm)[11] | Cosmetic products can only be distributed in the market once they have been granted the Receipt number of the CPN Form. The Company shall submit a dossier for each imported cosmetic product to the Drug Administration (Cục Quản lý Dược) – Ministry of Health, including: 1. CPN Form, attaching with notification data; 2. Power of Attorney from the manufacturer or product owner, authorizing the Company; 3. Certificate of Free Sale (CFS). The Company is responsible for completing the CPN Form and assumes full liability for the notified information. The competent state authorities will conduct post-market inspections after the product is circulated in the market. |
Vietnam’s cosmetics market presents significant opportunities for foreign investors, driven by increasing consumer demand and a dynamic wholesale and retail landscape. However, to establish a legal presence and operate successfully, businesses must comply with strict regulatory requirements, including licensing, legal conditions, and relevant sublicenses. Adhering to these regulations ensures a smooth and lawful entry into this thriving market, allowing investors to capitalize on its growth potential while maintaining compliance with local laws.
In D’Andrea & Partners Legal Counsel we have authored innovative publications exploring Vietnam, produced in order to provide foreign investors and businesses with more practical guidance on how to do business in Vietnam, as it requires a specific context of the economic and legal framework of the country, including tailor-made consultancy for trading medical equipment in Vietnam.
The above content is provided for informational purposes only. The provision of this article does not create an attorney-client relationship between D’Andrea & Partners and the reader and does not constitute legal advice. Legal advice must be tailored to the specific circumstances of each case, and the contents of this article are not a substitute for legal counsel.
[1] Source:
[2] Article 8.3 of Law on VAT No. 13/2008/QH12
[3] Article 3.2 of Decision 15/2023/QD-TTg
[4] Appendix II of Decree 26/2023/ND-CP
[5] Appendix II of Decree 116/2022/ND-CP
[6] Article 7 of Decree 07/2016/ND-CP
[7] Article 9 of Decree 07/2016/ND-CP
[8] Article 30 of Decree 07/2016/ND-CP
[9] Decision 27/2018/QD-TTg
[10] Article 5, 8, 9, 12, and 13 of Decree 09/2018/ND-CP
[11] Article 3, 5, 7, and 8 of Circular 06/2011/TT-BYT
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