According to statistics from the Ministry of Planning and Investment, within the first two months of 2024, 138 new projects were granted in the sector of wholesale and retail trade; repair of automobiles, motorcycles, and motorbikes, with a total registered capital of USD 80,666 million. Among these, there were 27 new investment projects by Japanese Investors with a total registered capital of USD 408,396 million. This shows that Vietnam has become an attractive potential market for investors from Japan in general and in the retail sector in particular. 

Currently, Vietnam is a popular destination for Japan Investors in cosmetic retail. However, in order to be allowed to conduct cosmetics retail in the Vietnamese market, Japanese investors need to pay attention to the following issues: 

1. Market access conditions for foreign investors

Japan has been a member of the WTO since January 1st, 1995. Based on the Schedule of WTO commitments on services, retail services of pharmaceutical products, medical products and cosmetics are unrestricted industries for foreign investors. Therefore, the market access conditions of Japanese investors have been met. 

2. Steps to establish a foreign-invested company operating in cosmetics retail

a. Application for an Investment Registration Certificate:  

• Pursuant to Point a, Clause 1, Article 37 and Clause 2, Article 39 of the Law on Investment 2020, Japanese Investors must carry out procedures for applying for an Investment Registration Certificate at the Department of Planning and Investment where the project is executed. 

• However, investors should pay attention to the following 02 issues:  

• • Financial capacity must be proven through the latest 02-year financial statements or bank account statements showing balances greater than or equal to the expected registered investment capital.  

• • Provide Memorandum of Understanding and Site Lease Agreement to prove the location of the project. 

b. Application for an Enterprise Registration Certificate:  

• After being granted the Investment Registration Certificate, the Investor will proceed to apply for an Enterprise Registration Certificate to establish a company. Based on the Enterprise Law 2020, there are 03 types of enterprises that investors can consider as follows: 

• • An one-member limited liability company which is owned by the Investor. 

• • A multi-member limited liability company with 02 to 50 members, in which Japanese Investors can contribute capital together to establish the company or contribute capital with domestic investors. 

• • Joint stock companies with 03 or more shareholders. 

• Investors should note the following 02 issues during and after being granted the Enterprise Registration Certificate: 

• • The company may have 01 or more legal representatives. However, there must be 01 legal representative residing in Vietnam. 

• • Investors are obliged to contribute sufficient capital and the right type of assets committed to contribute within 90 days from the date of being granted the Enterprise Registration Certificate. 

c. Other licenses:  

• Business license. 

• Retail establishment license. 

• Application for Receipt number of Cosmetic product proclamation. 

The above information highlights the key considerations for Japanese Investors to enter the Vietnamese cosmetics retail market. Following all the stipulated conditions is the first crucial step towards achieving success in this promising market. 

Author: NGUYEN HUYNH TRUC THI | Trutie,  Update: 17/06/2024