7 Answers on How to Import Cosmetics to Vietnam

Posted 24.07. 2018 by Cekindo / Last update on 5.11. 2020

The US International Trade Administration report draws the global investors’ attention to Vietnam as a country with the highest market potential to import cosmetic products. The US$ 704.2 million worth of the cosmetic market (Nielsen 2013) shows a consistent 33% annual growth in market demand for foreign beauty products, the highest projected growth rate compared to its Asian competitors such as Hong Kong at -2%, Japan at -14%, and South Korea at 15%. Major global beauty giants such as L’Oreal, Ohui, Estee Lauder, The Body Shop, and popular competitive Korean brands dominate 90% of the domestic market share, leaving local brands struggling to compete.

Yet don’t fear the giants; the market is booming rapidly. The projected annual market growth rate of 35% promises a flourishing demand that continuously produces new opportunities for foreign FMCG businesses to excel.

1. What kind of cosmetics should I import to Vietnam?

2. What are the authorization requirements to import cosmetic products to Vietnam market?

3. What is an HS Code and where can I find it?

4. Do I have to open a local business to import to Vietnam?

5. Can I just find local distributors so I won’t have to worry about the licenses?

6. How long will application process take before I can start importing and selling cosmetics in Vietnam?

7. What kind of taxes will I have to pay?

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What kind of cosmetics should I import to Vietnam?

Beauty Product

Korean beauty goods dominate the Vietnamese market share at 30% as a result of the successful integration of Korean popular culture in Vietnam. Local consumers associate Korean and Japanese products with youthful, affordable yet high-quality. They perceive European and American beauty products with trust, good quality and “brands for adults”. Local consumers have the highest preferences towards cosmetics that help them deal with the harsh tropical climate that is also highly polluted. Consumer trend consistently gears towards multifunctional beauty solutions. They must have high UV protection. They should also be suitable for high humidity for the respective skin and hair types. The increasing demand from the region’s men offers opportunities in both personal care and grooming products.

Baby and Child Care Products

The national consensus has projected population growth of approximately 1 million people every year over the next two decades. The estimation when coupling with the doubling in size of the middle-class population makes baby and child care products the top 3 of export opportunities for medium-to-high-end foreign brands.

Green or Natural Products

The soaring demand for natural cosmetics will help double Vietnam’s total value of cosmetic import from US$2 billion in 2016 to US$3 – 4 billion by the end of 2018.

Local brand leaders such as Saigon Cosmetics JSC (SCC) reported that natural shampoo and organic perfume products are already generating over 30% of the company’s total revenue. This number will only be growing from here across the cosmetic market as a result of proactive collaboration between global beauty partners and local brands.

What are the authorization requirements to import cosmetic products to Vietnam market?

The introduction of the 2007 ASEAN Cosmetics Directive, ingredient requirements to claims, labelling prescribed lists, and other compliance requirements make the product registration process challenging. Below is a list of requirements to import cosmetic products:

  1. Local legal representation: You will need to find either a reliable local distributor or set up a Wholly-Foreign Owned Company in order to import your product. Finding a local distributor with no previous experience in the Vietnamese market can be challenging due to common fraudulence and corruption from the application system.
  2. Product Registration: including product information file in both English and Vietnamese
  3. Product Specification: requirements to be approved by the Ministry of Health: including Safety Assessment, Raw Material Registration and Formula, Preservative Efficacy, Product Stability, Good Manufacturing Practice, Proof of Claims
  4. Labelling
  5. Certificate of Free Sale
  6. Regular notification to local authorities: The responsible agent must notify national authorities.

Related article: An In-Depth Guidance on Market Analysis, Labeling, Claims, Packaging and Advertising for Cosmetics in Vietnam

What is an HS Code and where can I find it?

HS Code is the legal identification of a product when entering a country. The HS code of a product determines the tax rates that will be applied to the item. Check the respective HS Codes on the national tariff database.

Due to the recent structural change in the government to liberalise the economy, the Vietnamese government has been updating their tariff and tax regulations regularly with inconsistent implementation. Contact us (link to contact page or email) to determine exactly what taxes will be applied to your product and what tax exemptions that would benefit your business.

Do I have to open a local business to import to Vietnam?

It is mandatory for a business to have a legal representative in Vietnam to conduct any trading business. Finding a local distributor is possible but not highly recommended due to the high tendency of fraudulence that could risk you the ownership over your product and your sales revenue.

It is highly recommended that you set up a Wholly-Foreign Owned Company or find a reliable local partner. Cekindo’s legal experts can advise you on both matters, send us questions and receive your answers within 24 hours.

Can I just find local distributors so I won’t have to worry about the licenses?

You can find a local organization or local individuals to be the legal authority responsible for placing the products in the market and for administrative communication with the Drug Administration of Vietnam.

If you choose to partner with a local distributor, Cekindo could assist you in finding reliable distributors and trading agents in Vietnam.

Additionally, Cekindo could conduct a background check of your potential distributors to evaluate the reliability of your potential partners. Contact us for more information regarding our due diligence research service.

How long will application process take before I can start importing and selling cosmetics in Vietnam?

Setting up a company in Vietnam can take between 1 to 3 months. The product registration process may take an additional 20-25 days.

What kind of taxes will I have to pay?

Tax requirements vary depending on the origin of your product. The general requirement for tax regulations include:

  • Import Tax
  • Value-added Tax (VAT)
  • Special Consumption Tax (SCT)
  • Environment Protection Tax (EPT)

For further discussion about Vietnam cosmetic market and import guidance, you can contact us by filling the form below.

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