Exporting Korean cosmetics: how the K-beauty industry works, and the law behind it

Few industries show how much law shapes a market as clearly as Korean cosmetics. Twenty years ago Korean beauty meant two conglomerates. Today it means thousands of brands, many of them run by a dozen people, most of them without a factory, selling serums and sun creams in two hundred countries. That shape is not an accident. The Cosmetics Act lets anyone with an office and a qualified manager put a brand on the market, and the two largest contract manufacturers — Cosmax and Kolmar Korea — each report more than KRW 2 trillion of annual revenue, much of it from making products for other people’s brands, from Korean indie labels to most of the world’s largest cosmetics groups.

This guide is for foreign founders and companies who want to use that system: to build a brand made in Korea, to trade Korean products abroad, or to understand the legal chain behind a product they import. It covers the Korean registrations, the export rules, the certificates export markets ask for, the destination-market regimes, and the contracts that hold it all together.

How the industry is built: three registrations

The Cosmetics Act recognises three kinds of cosmetics business, each registered with the regional MFDS office under Article 3 and Article 3-2:

Cosmetics Act, Articles 3 and 3-2.

The responsible seller (화장품책임판매업자, hwajangpum chaegim panmaeeopja) is the centre of the system. It is the legal owner of the product in Korea: it decides the formula with the factory, releases each batch for sale, files the annual production or import report, collects safety information and recalls defective products. It must appoint a responsible sales manager (책임판매관리자, chaegim panmae gwallija) — a pharmacist, a science graduate, or a person with the required years of cosmetics quality experience — and it needs an office rather than a plant. Selling without registration is a criminal offence under Article 36, punishable by up to three years’ imprisonment or a fine of up to KRW 30 million.

The low entry barrier explains the numbers. MFDS counted 28,412 registered responsible sellers at the end of 2025 against 4,158 manufacturers; in 2024 about 88% of the firms that reported production had fewer than ten employees. A foreign-owned Korean company can register as a responsible seller on the same terms as a Korean one, which is how many foreign founders build a “made in Korea” brand: a Jusik Hoesa, a qualified manager, an ODM contract and a registration.

ODMs, OEMs and who owns what

Korean contract manufacturing comes in two forms. An OEM (주문자상표부착생산, jumunja sangpyo buchak saengsan) makes the brand’s own formula to its specification. An ODM (제조자개발생산, jejoja gaebal saengsan) develops the formula as well — often from a library of tested bases — and makes it. Most indie brands use ODMs, and the large ODMs have cut minimum orders to a few thousand units, which is what made the small-brand boom possible.

The legal consequence is that the brand often owns the name, the design and the customer, but not the formula. Unless the contract says otherwise, the ODM keeps the formula, its test data and the know-how, and can make something very similar for the next client. That matters on three occasions: when the brand wants to move to another factory; when a foreign regulator asks for full formula and safety data the brand does not hold; and when the brand is sold, and the buyer asks what exactly it is buying. The contract — not the Cosmetics Act — decides those questions.

Product rules at home

Cosmetics sold in Korea must use permitted ingredients within MFDS limits — Korea works mainly from a list of prohibited and restricted ingredients, with positive lists for preservatives, colourants and UV filters — and follow the labelling rules of Article 10: the product name, the responsible seller, the full ingredient list in Korean, the batch and the expiry or period after opening. Claims are limited by Article 13, which bans advertising a cosmetic as a medicine or making claims the evidence does not support.

Whitening, anti-wrinkle, sunscreen, hair-loss-relief and some other claims make a product a functional cosmetic (기능성화장품, gineungseong hwajangpum), which must be reviewed by or reported to MFDS under Article 4 before sale; functional products were 41.9% of Korean production in 2024. Since February 2017, Article 15-2 has banned the sale of cosmetics tested on animals, with exceptions that include testing required by an importing country’s law. Next comes a mandatory safety assessment: the government plans to phase it in from 2028 for companies with annual production or imports of KRW 1 billion or more, and from 2031 for everyone.

Claims need evidence

K-beauty sells on claims — “brightening”, “barrier repair”, “clinically tested”, “hypoallergenic” — and Korean law asks the responsible seller to prove them. Under Article 14 of the Cosmetics Act, MFDS can require the business to substantiate the content of a label or advertisement, and the responsible seller must produce the evidence within the deadline it sets; if it cannot, the advertisement must stop. MFDS guidance lists which claims need human application test (인체적용시험, inche jeogyong siheom) data, which can rest on in-vitro or literature evidence, and which cannot be made by a cosmetic at all — anything that treats, cures or prevents a disease, or that promises cell regeneration or hair growth.

The same evidence travels. The EU wants proof of claimed effects in the Product Information File; the United States treats unsupported drug-like claims as turning a cosmetic into an unapproved drug; China has required efficacy substantiation summaries for cosmetics claims since 2022. A brand that commissions one well-designed human application test in Korea, from a laboratory whose reports foreign regulators accept, usually saves itself three separate studies. Build the claim list with the ODM before the formula is fixed, not after the packaging is printed.

The export rule: Article 30

A product made only for export, and not sold in Korea, may follow the importing country’s standards instead of a defined set of Korean rules under Article 30 of the Cosmetics Act. The exemption covers functional-cosmetic review, the safety-standard and labelling provisions and related rules. In practice it means an export-only product can carry a label written for the destination market, use an ingredient level the destination allows, or make a claim the destination permits, without passing Korean functional review.

Two cautions. The exemption is for products that never enter Korean distribution: a brand that sells the same product in Seoul and in Los Angeles must comply with Korean rules for the Korean stock. And Korean ingredient bans still matter in practice, because many factories will not run a formula that would be illegal at home. For a foreign brand that uses a Korean ODM purely for export, the factory exports as manufacturer and the brand often needs no Korean registration at all; the legal duties then sit with the brand’s responsible person in each destination market.

Certificates export markets ask for

Typical certificates for a Korean cosmetics export.

Korea’s CGMP (우수화장품 제조 및 품질관리기준, usu hwajangpum jejo mit pumjil gwallli gijun) has existed since 1990 and is voluntary at home; MFDS had certified 185 sites by 2023. It has become a commercial necessity because export markets expect GMP — the EU requires it, ASEAN requires it, the United States is writing its rules — and because China grants its animal-testing exemption only on a GMP certificate from a government authority. A certificate from an association or chamber of commerce does not count there; an MFDS CGMP designation does. When choosing an ODM, ask which of its sites are CGMP-certified and for which product types.

What the main export markets require

Simplified; each market has further detail. US figures: MoCRA; China: NMPA rules.

The pattern is the same everywhere: the foreign market wants a local company that answers for the product. For a Korean brand that means distributors or its own subsidiaries abroad; for a foreign brand made in Korea it means the brand’s own company at home plus the documents only the ODM can provide. The United States, now the largest market, became harder in 2025: the Modernization of Cosmetics Regulation Act brought registration, listing and adverse-event duties; the tariff picture changed three times — a 15% rate under the 2025 trade arrangement, struck down with the other IEEPA tariffs by the Supreme Court on 20 February 2026, a temporary Section 122 surcharge, and since 24 July 2026 an additional Section 301 duty of around 10–12.5% on most Korean goods; and the suspension of the de minimis exemption from 29 August 2025, now indefinite for postal shipments and due to end by statute in July 2027, hit brands that shipped small parcels directly to American consumers. Confirm the current rate with a US customs broker before pricing.

Tax, customs and the export chain

Exports of goods are zero-rated for Korean VAT, so an exporter recovers the 10% VAT it paid on products and packaging. A Korean supplier that sells to an exporter rather than abroad can also zero-rate the sale when it is covered by a local letter of credit or purchase confirmation (내국신용장 · 구매확인서, naeguk sinyongjang · gumae hwaginseo) under the Value-Added Tax Act — the usual way an ODM supplies a Korean trading company without charging VAT. Imported raw materials used in exported products can qualify for duty drawback under the Act on Special Cases concerning Refund of Customs Duties. Our guides to exporting from Korea and Korean VAT cover the mechanics.

Korean free trade agreements help at the destination: the EU, the UK, ASEAN, Australia, Canada and others generally admit Korean cosmetics duty-free with proof of origin, which the exporter or the chamber of commerce provides.

Brands, grey markets and counterfeits

Korean brands travel faster than their trademarks. Register the brand in Korea first — Korea is first-to-file (선출원주의, seonchurwonjuui) under Article 35 of the Trademark Act — and in each export market before the first shipment, including Chinese characters for China; see trademark registration in Korea. Grey exports — Korean retail stock bought in bulk and resold abroad by traders — are legal in Korea but undermine distributors and price lists; brands control them through distribution contracts, batch coding and market-specific packaging rather than through the Cosmetics Act. Counterfeits are pursued through customs recordal and platform takedowns in the destination country.

Setting up in Korea as a foreign founder

The usual structure for a foreign founder building a Korean-made brand is a Korean company registered as a responsible seller, with an ODM contract and, where the founder will live in Korea, foreign investment status for the D-8 visa. The steps are: incorporate, lease an office, appoint the responsible sales manager, register with the regional MFDS office, sign the ODM agreement, register the trademark, and then set up the export side — distributors or a responsible person in each market. A founder who will only export, and whose ODM ships directly, can sometimes skip the Korean registration — but then the brand’s Korean presence is a contract, not a company, and Korean retailers will not list it. Our guide to cosmetics and food for importers covers the mirror image: bringing foreign cosmetics into Korea.

A worked example

A Dutch founder wants a skincare line made in Korea for the European and American markets, with a Korean launch later. She forms a Seoul Jusik Hoesa, hires a cosmetic-science graduate as responsible sales manager and registers as a responsible seller. She chooses an ODM with a CGMP-certified site and signs a contract giving her the full formula disclosure, specifications and test data, a no-copy clause for three years and approval rights over any change.

The first products are made for export only under Article 30, with EU labels: her Dutch company acts as EU Responsible Person, a safety assessor in Amsterdam writes the safety report, and the products are notified on CPNP. For the US she lists the products under MoCRA with her American distributor as the responsible person on the label, and the ODM’s facility registration is confirmed. A year later the Korean launch needs Korean labelling and, for the sunscreen, functional-cosmetic review — which is why she kept the Korean registration from the start.

Mistakes we see

1. No formula rights in the ODM contract, discovered when changing factories.
2. Export-only stock that drifts into Korean sales without Korean labels or functional review.
3. Association certificates offered to China where a government GMP certificate is required.
4. No local responsible person in the destination market, so the first shipment waits at customs.
5. Claims that turn a cosmetic into a medicine — in Korea under Article 13, abroad under local rules.
6. Small-parcel direct-to-consumer shipping to the US priced on rules that ended in August 2025.
7. Trademarks filed after the distributor’s — in Korea or in the export market.

Korean terms you will meet

Questions readers ask

About the author

Alexander Baranov

Founder of the BCA Group · cross-border corporate and tax adviser since 2008

Alexander advises foreign founders and groups on company formation, tax structuring and corporate law in more than 40 jurisdictions across Europe, the Gulf, Asia and Latin America. He is the author of nine books on international business and tax and writes regularly for professional finance and tax journals. He works in English, German, Spanish and Russian.

This guide is based on the Korean statutes cited in the text and on our own filings. It is reviewed when the law or official rates change.

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