Establish a foreign-invested company to manufacture medical equipment in Vietnam

Vietnam with a lot of potential in terms of labor, location and incentives has been attracting many investors around the world to invest in this medical equipment manufacturing field. Foreign investors who want to open a company with 100% capital in the production of medical equipment in Vietnam need to find out the regulations and conditions that must be met to be established and manufactured under Vietnamese law.

Legal basis:

• WTO commitments and international treaties on investment that Vietnam has signed or acceded to;
• The Law on Investment 2020;
• The Law on Commercial 2005;
• Decree 31/2021/ND-CP guiding the Law on Investment;
• Decree 98/2021/ND-CP on management of medical equipment

The investment conditions of foreign investors in the field of medical equipment manufacturing 

Medical equipment business lines are on the list of conditional industries according to the List specified in the Investment Law. Accordingly, foreign investors when investing in the manufacturing sector do not have any conditions specified on regulation of capital ownership ratio of foreign investors, no conditions on investment form.

According to the provisions of Decree 98/2021/NĐ-CP, before production must meet and declare eligibility to manufacture medical equipment.

Condition for establishing a company medical equipment manufacturing:

Foreign investors do not have conditions on capital contribution ratio when establishing medical equipment manufacturing companies.

Foreign investors invest in the production of medical equipment in the following investment forms:

• Establishing a company with 100% foreign investment capital in the production of medical equipment;
• Establish Joint venture between foreign investors and Vietnamese investors;
• Contributing capital, buying shares and capital contributions in Vietnamese enterprises for the production of medical equipment;
• Business cooperation contract.

During the establishment of a company, investors should pay attention to the following contents:

• Project implementation location: Because production activities have a great impact on the environment, it is necessary to meet the conditions of fire prevention and fighting, environmental commitment, and security, so the project site must be located in the planning allowed to produce: industrial zone parks, high-tech zone, export processing zone, …. For Chinese investors, due to local policies of some localities, setting up a business becomes more difficult to get approval and review local production planning.
• Attention on investment capital: There is no minimum capital requirement to establish a 100% foreign owned manufacturing company. However, in order to make a production investment, the investor must have a capital amount suitable to the production and business plan, production scope, production scale…
• Strictly comply with the contents of production registration as prescribed in Investment Registration Certificate: The investment certificate issued to the investor clearly specifies production objectives, production scale and implementation schedule of the production project. When producing, investors need to strictly comply with the registered contents. In case there are changes, they need to contact the licensing agency to make adjustments to the Investment Registration Certificate.

Meeting the conditions under specialized law:

Immediately after the issuance of the Investment Registration Certificate, the Enterprise Registration Certificate, before going into the production of medical equipment, the foreign-invested company must announce the eligibility to manufacture medical equipment. medical equipment at the Department of Health according to the provisions of the Decree 98/2021/ND-CP.

A foreign-invested company may only produce medical equipment when it meets the following conditions:

• Personnel conditions: for establishments producing medical equipment containing narcotic substances and precursors, the person in charge of expertise must have a university degree in medical equipment, medicine, pharmacy, chemistry or biology.
• Facilities conditions: Facilities must meet quality management system standards as prescribed by law.
• Certificate of conformity with ISO 13485 quality control standards issued by the conformity assessment body in accordance with regulations of law.
• A manufacturer of the medical device that contains narcotic substances and precursors shall also meet the following requirements:
  • It has a system for monitoring the dispatching, warehousing, inventory and use of narcotic substances and precursors, the medical devices and raw materials containing narcotic substances and precursors;
  • Medical devices and raw materials containing narcotic substances and precursors must be safely stored in a separate area or warehouse.

Customers wishing to learn the laws and regulations related to the establishment of a foreign-invested medical equipment manufacturing company in Vietnam as well as procedures for declaration of eligibility to manufacture medical equipment. medical equipment please contact Viet An Law for more details!