Foreign-invested pharmacy retail chains: permitted?

Vietnam’s pharmacy chain market is growing fast and attracts many foreign investors, but it is one of the sectors where Vietnam’s market access commitments reserve almost everything for domestic companies. The straight answer for an FDI investor is: a foreign-invested pharmaceutical business may not carry out retail sale of medicines, so a pharmacy chain directly owned and operated by FDI capital is not permitted in Vietnam today.

The legal basis of the bar: from WTO commitments to the amended Pharmacy Law

Vietnam made no commitment opening distribution services for pharmaceuticals in its WTO schedule, and domestic pharmacy law turns that reservation into a direct rule. Law on Pharmacy 105/2016/QH13, in the text amended by Law 44/2024/QH15, provides that a foreign-invested pharmaceutical business may not perform activities directly related to the distribution of medicines, and may not retail or wholesale medicines and medicinal ingredients, apart from narrow exceptions listed in the same provision.

The exceptions do not open a door to pharmacy chains: they mainly concern medicines the establishment itself imported, manufactured, toll-manufactured or received through technology transfer in Vietnam within permitted distribution relations, and supply for clinical trials. Decree 54/2017/ND-CP, at clause 10 of Article 91, confirms the familiar FDI pharmaceutical model in Vietnam: an import right without a distribution right in Vietnam.

GPP and pharmacist conditions: the standard for domestic pharmacies

Although they cannot be used by an FDI investor to open a direct chain, a pharmacy’s conditions are worth knowing because they are the standard any domestic partner of the investor must meet. A pharmacy must achieve Good Pharmacy Practice (GPP) under Circular 02/2018/TT-BYT, have a professional in charge who is a pharmacist holding a practice certificate and present as required, and meet minimum conditions on storage, area and equipment.

The professional in charge of a retail establishment must be a pharmacist with the appropriate qualification and practice certificate, and the establishment may only sell medicines within its permitted scope, with prescription medicines requiring a prescription. A pharmacy chain is therefore not just a premises and branding exercise; it is a recruitment and retention exercise for charge pharmacists at every outlet, a problem domestic investors also face when scaling a chain.

Online medicine sales and the feasible models for foreign investors

The 2024 amendment of the Pharmacy Law opened retail sale of medicines through e-commerce platforms under tight conditions, applying from 1 July 2025 for eligible retail establishments. That change widens the sales channel for entities already allowed to retail; it does not change the distribution limit for foreign-invested businesses: an FDI platform or chain still cannot itself retail medicines in Vietnam.

Feasible models for foreign investors sit outside distribution: manufacturing medicines in Vietnam, importing medicines and authorising distribution through an eligible domestic partner, providing specialised logistics services within the permitted scope, or investing in pharmaceutical technology. Each model should be checked against market access conditions at the time of investment, because the pharmaceutical sector is revised frequently.

Frequently Asked Questions

Are foreign-invested pharmacy retail chains permitted?

No, under current law. A foreign-invested pharmaceutical business may not retail or wholesale medicines under Law on Pharmacy 105/2016/QH13 as amended by Law 44/2024/QH15, apart from narrow exceptions that do not include the pharmacy chain model. FDI companies may import and manufacture medicines in Vietnam, but distribution to consumers must run through an eligible domestic establishment.

What are the pharmacist and GPP conditions?

A lawful pharmacy in Vietnam must meet Good Pharmacy Practice standards under Circular 02/2018/TT-BYT, have a pharmacist in professional charge holding a practice certificate, satisfy conditions on area, storage and equipment, and sell only medicines within its permitted scope. This is the standard for domestic retail establishments; for an FDI investor the blockage sits in owning and operating the retail activity itself, which is not permitted.

Is there a foreign ownership cap?

The limit is not a specific foreign ownership percentage but the activity itself: a foreign-invested pharmaceutical business, whatever the foreign capital ratio, may not distribute or retail medicines in Vietnam outside the statutory exceptions. A minority foreign stake in a pharmaceutical company therefore does not automatically make retail activity lawful if that company is characterised as a foreign-invested establishment.

Can medicines be sold online?

Online sales do not change the answer. The 2024 Pharmacy Law amendment lets eligible retail establishments sell medicines through e-commerce platforms from 1 July 2025, but the retail right still belongs to entities permitted to retail. An FDI business cannot use the online channel to do what the offline channel forbids; the workable model is partnering with a GPP-qualified domestic pharmacy chain as the lawful retailer.

Bottom line for pharmaceutical investors

A pharmacy chain directly owned and operated by FDI capital is currently not permitted in Vietnam, because the limit attaches to the distribution and retail activity rather than to a capital ratio. Foreign investors should design their model around manufacturing, importation and distribution cooperation with an eligible domestic partner.