Vietnam's healthcare and pharmaceutical sector attracts foreign investors with nearly 100 million people, rapid ageing and steadily rising health spending. But it is also one of the most tightly regulated sectors: manufacturing, import, distribution, retail and medical services all carry business conditions, specialised licences — and, crucially, "red lines" reserved for foreign investors.
This handbook systematises the core legal issues FDI investors must understand before committing capital to Vietnamese healthcare and pharma.
Contents
- 1. Why healthcare and pharma are conditional sectors
- 2. Market access conditions for foreign investors
- 3. Investing in drug manufacturing and import
- 4. The red line: drug distribution and retail
- 5. Investing in medical examination, treatment and hospitals
- 6. Medical devices and clinical trials
- 7. Implementation roadmap and common mistakes
- 8. Quick Q&A
- 9. When to work with counsel
1. Why healthcare and pharma are conditional sectors
Healthcare and pharma are conditional business sectors under Vietnamese law. Investors — domestic or foreign — cannot simply register a company and operate; they must additionally satisfy conditions on facilities, professional personnel and specialised licences from the Ministry of Health.
For foreign investors there is a second layer: market access conditions under the 2025 Investment Law and international commitments (notably WTO). Some activities open to domestic enterprises are prohibited or restricted for foreign-invested ones — pharmaceutical distribution and retail are the prime examples.
An investment strategy in healthcare and pharma must therefore start with three questions: (1) is the planned activity conditional; (2) as a foreign investor, is that market accessible; (3) which specialised licences are needed and in what sequence.
2. Market access conditions for foreign investors
The 2025 Investment Law (143/2025/QH15, effective 1 March 2026) carries forward the principle: foreign investors receive treatment no less favourable than domestic investors, except in sectors subject to market access conditions under international commitments and specialised laws.
Notable limits in healthcare and pharma:
- Pharmaceutical distribution: Vietnam's WTO commitments do not open direct pharmaceutical distribution to foreign-invested enterprises — a treaty-level limit that cannot be "interpreted around".
- Drug retail: pharmaceutical law prohibits foreign-invested drug businesses from retailing drugs in any form.
- Medical examination and treatment services: open to investment but subject to strict specialised conditions.
When applying for an Investment Registration Certificate (IRC), the registration agency checks planned activities against market access conditions. Overstating or understating activities in the IRC is a common error that stalls projects at the appraisal stage.
3. Investing in drug manufacturing and import
Manufacturing and import are the two main entry points foreign investors choose, being the most openly accessible stages.
Drug manufacturing requires:
- GMP-compliant manufacturing facilities;
- A Certificate of Satisfaction of Pharmaceutical Business Conditions for the manufacturing scope;
- A marketing authorisation for each drug before market launch;
- Compliance with drug pricing and public-hospital tender rules.
Import of drugs and drug raw materials requires:
- An importing establishment with a Certificate of Satisfaction of Pharmaceutical Business Conditions covering import;
- Marketing authorisation for imported drugs (except special import cases);
- Quality and storage compliance during import and warehousing.
The critical point: after manufacturing or importing, distribution by the FDI enterprise itself is restricted (see section 4). Many investors build a factory only to discover they cannot wholesale their own products — a costly strategic mistake.
4. The red line: drug distribution and retail
This is the heart of the handbook. Under the law amending the Pharmacy Law (44/2024/QH15, effective 1 July 2025), foreign-invested drug businesses:
- May not retail drugs in any form;
- May not wholesale drugs or drug raw materials, except as permitted by law;
- May not conduct activities directly related to drug distribution, including: selling, delivering or transporting drugs; storing drugs not imported or manufactured by the establishment itself; taking orders and payments from medical examination/treatment establishments or retail outlets; setting or imposing selling prices; deciding distribution strategy or business policy; building drug supply plans for medical establishments; providing financial support to manipulate distribution of imported drugs.
In short, FDI pharmaceutical enterprises in Vietnam essentially stop at manufacturing and import; distribution must go through qualified domestic enterprises. Every "service contract", "sales authorisation" or "distribution joint venture" structure must be carefully reviewed against these limits — violations can trigger heavy administrative sanctions and jeopardise existing licences.
5. Investing in medical examination, treatment and hospitals
Investing in medical examination and treatment establishments (hospitals, clinics) is encouraged, but specialised conditions are demanding:
- Operating licence: establishments must meet conditions on facilities, medical equipment, staffing and professional scope under the 2023 Law on Medical Examination and Treatment.
- Foreign practitioners: foreign doctors and nurses must hold Vietnamese practising licences; recognition of foreign degrees follows Ministry of Health rules.
- Advertising: medical service advertising is tightly controlled, with some forms prohibited.
- Service pricing: private medical establishments set their own prices but must publish them; health-insurance-covered services follow state price frames.
Investors should also note rules on patient transfer, medical records and health-data protection — an area where personal data protection law is tightening.
6. Medical devices and clinical trials
Medical devices are managed by risk class (A, B, C, D): classes A and B require declaration of applicable standards; classes C and D require marketing registration. FDI enterprises may import and distribute medical devices if conditions are met, subject to warranty, maintenance and manufacturer authorisation requirements. This segment offers foreign investors wider room than pharmaceuticals, as it carries no drug-like distribution limits.
Clinical trials are permitted under special supervision: trial sites must be recognised by the Ministry of Health; protocols approved by a biomedical research ethics committee; participants covered by liability insurance. Vietnam is increasingly chosen by international pharma for clinical trials given reasonable costs and large patient pools — but ethics and legal compliance are prerequisites.
7. Implementation roadmap and common mistakes
A typical roadmap for an FDI healthcare/pharma project:
- Review market access conditions for each planned activity (manufacturing, import, distribution, medical services).
- Obtain investment policy approval (if required) and the IRC, recording the permitted scope accurately and completely.
- Establish the enterprise and obtain the ERC.
- Obtain specialised licences: Certificate of Satisfaction of Pharmaceutical Business Conditions, medical operating licence, drug/device marketing registrations.
- Operate in compliance: periodic reporting, maintaining GMP/GSP conditions, pricing and tender rules.
Four common mistakes: (1) recording IRC activities beyond market access conditions; (2) building "workaround" distribution models; (3) underestimating specialised licensing timelines (drug marketing registration can take many months); (4) ignoring periodic reporting duties under Article 47 of the 2025 Investment Law.
Additionally, factor realistic timelines into planning: from IRC application to full licensed operation, a pharma or hospital project typically takes 9 to 18 months, sometimes longer for new-product registrations. Unrealistic schedules waste preparation costs and create legal risk — Article 36 of the 2025 Investment Law allows termination of projects delayed beyond 24 months without adjustment. Build IRC timelines conservatively, with buffers for specialised licensing.
On capital structure, many foreign investors choose joint ventures with Vietnamese partners for distribution networks and market knowledge. This is lawful and common, but joint venture contracts must draw clear lines: the foreign side may not use the venture to indirectly conduct activities the law prohibits FDI enterprises from doing directly — such as running drug distribution. Regulators look at substance, not just legal form.
A final overlooked point is post-licensing compliance. Healthcare licences are not "one and done": drug manufacturers must maintain GMP through periodic assessments; drug marketing authorisations have terms and need renewal; medical establishments face inspections of practising conditions. Build an internal regulatory-affairs compliance system from day one, rather than reacting to inspection teams.
8. Quick Q&A
Can foreign investors open retail pharmacies in Vietnam? No. Pharmaceutical law prohibits foreign-invested drug businesses from retailing drugs. Foreign investors cannot directly own and operate retail pharmacy chains; cooperation models with domestic partners must strictly observe distribution limits.
Can an FDI enterprise distribute pharmaceuticals in Vietnam? Strictly limited. Foreign-invested drug businesses may not wholesale drugs or drug raw materials, nor conduct activities directly related to drug distribution (such as taking orders from hospitals or retail pharmacies), except as permitted by law.
What conditions apply to drug manufacturing in Vietnam? Drug manufacturing is a conditional business: facilities must meet GMP standards, hold a Certificate of Satisfaction of Pharmaceutical Business Conditions, and each drug must obtain a marketing authorisation. Foreign investors may manufacture, but post-manufacturing distribution remains subject to the limits above.
What should foreign-invested hospitals watch for? Hospitals are conditional: they must meet market access conditions under WTO commitments and the Investment Law, obtain an operating licence for medical examination and treatment, and foreign doctors must hold Vietnamese practising licences. Planning, facilities and professional staffing requirements need review.
Is importing medical devices into Vietnam difficult? Medical devices are classified by risk (A, B, C, D) with corresponding management: declaration of applicable standards or marketing registration. FDI enterprises may import and distribute medical devices if conditions are met, subject to warranty, maintenance and manufacturer authorisation requirements.
Can clinical drug trials be conducted in Vietnam? Yes, but under strict rules: trial sites must be recognised, research protocols approved by an ethics committee, and participants insured. The sector is closely supervised by the Ministry of Health.
9. When to work with counsel
Investors should engage counsel from the project-structuring stage — when deciding the manufacturing/import/distribution model — not when applications are returned. Deep support is needed for: reviewing market access under WTO commitments and specialised law; designing compliant distribution structures; obtaining healthcare licences; and handling operational issues (inspections, sanctions, IRC adjustments).
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