FIEs will have greater rights to import drugs into Vietnam

According to Decree No. 54/2017/ND-CP (the “New Decree”) guiding Pharmaceutical Law 2016 which took effect 1 July 2017, foreign pharmaceutical investors are allowed to import and sell drugs to local partners in Vietnam. This new regulation creates an excellent opportunity for foreign investors interested in Vietnam’s pharmaceutical market. 

Article 24 of Decree 79/2006/ND-CP guiding Pharmaceutical Law 2005 limited the right to import drugs to manufacturers and local partners (“LPs”):

“1. Drug-producing or wholesaling enterprises which have certificates of full satisfaction of drug business conditions and have drug warehouses up to good practice standards on drug preservation shall be permitted to import drugs according to the provisions of law on pharmacy, regulations of the Health Ministry, and relevant legal provisions.”

However, this restriction was removed when Pharmaceutical Law 2016 was issued and took effect on 1 January 2017 because the New Decree guiding this law specifies the importation right is now expanded to foreign invested enterprises (“FIEs”).

Article 33.1(b) of Pharmaceutical Law 2016 states a drug business establishment can import drugs if it has the following: a physical premises; a GSP warehouse for drug storage; storage equipment; vehicles to transport drugs; quality control systems; technical documents; and personnel that fulfill Good Storage Practice requirements.

Article 44.1(d) of Pharmaceutical Law 2016 and Article 91.10 of the New Decree provide that FIEs will have the right to import and sell drugs to local partners for distribution. Article 91.12 also states that FIEs that want to import and sell drugs to LPs must register their LPs with the Ministry of Health (“MOH”) before they begin selling, as well as when they terminate their contracts with the LPs. The MOH will publish the list of LPs eligible to purchase imported products from FIEs on the MOH’s website within three working days.

The New Decree’s regulations were promulgated pursuant to Vietnam’s WTO commitments and other treaties, such as the EU – Vietnam Free Trade Agreement (“EVFTA”). Specifically, Paragraph 1 of Article 14 EVFTA (Trading Rights) states that:

“1. Vietnam shall adopt and maintain in force appropriate legal instruments allowing foreign pharmaceutical companies to establish foreign-invested enterprises in order to perform importation of pharmaceuticals [emphasis added], which duly got the marketing authorization from Vietnam’s authority.”

All of this bodes well for Vietnam’s pharmaceutical sector. Vietnam’s pharmaceutical sector has shown high growth rates over the last few years. For instance, the value of imported pharmaceutical products in the first nine months of 2016 reached USD 1.9 billion, up 16.44% from the same period in 2015. FIEs are responsible for an estimated 15% of domestic pharmacy production[1]. These figures prove that Vietnam’s pharmaceutical business has potential market space for FIEs to take advantage of.

With the passing of new laws in a dynamic country of nearly 90 million citizens, Vietnam promises to be a fertile pharmaceutical market for FIEs’ investment.

By Net Le & Hai Ngo, LNT & Partners

Disclaimer: This article is for information purposes only. Its contents do not constitute legal advice and should not be regarded as detailed advice in individual cases. For more information, please contact us at or visit the website: Http://

[1] Source:

Full Trans-Pacific Partnership Text Released

Today, on 5th November 2015, New Zealand has released the text of the Trans-Pacific Partnership on behalf of the twelve member countries in its capacity as Depositary of the agreement.

The agreement will also be translated into French and Spanish language versions. Both steps, as well as the Government’s consideration of the final outcome from negotiations, will need to be completed before signature takes place.

Current status of the Agreement

TPP has not yet been signed or entered into force. Negotiations concluded on 5 October 2015.


Please follow the links for full text of TPP released today.

  1. Chapter Texts and Associated Annexes
  2. Market Access Offers and Country-Specific Annexes
  3. Side Instruments between Viet Nam and TPP countries


Text of the Trans-Pacific Partnership

The text of the Agreement was released by TPP Parties on 5 November 2015 and can be accessed by chapter below. The text will continue to undergo legal review and will be translated into French and Spanish language versions prior to signature.

Preamble [PDF, 21KB]

1. Initial Provisions and General Definitions [PDF, 61KB]

  • The Chapter includes the following Annex:
    • Annex 1-A: Party-Specific Definitions

2. National Treatment and Market Access for Goods [PDF, 520KB]

3. Rules of Origin and Origin Procedures [PDF, 155KB]

4. Textiles and Apparel [PDF, 70KB]

5. Customs Administration and Trade Facilitation [PDF, 59KB]

6. Trade Remedies [PDF, 52KB]

  • The Chapter includes the following Annex:
    • Annex 6-A: Practices Relating to Antidumping and Countervailing Duty Proceedings

7. Sanitary and Phytosanitary Measures [PDF, 92KB]

8. Technical Barriers to Trade [PDF, 198KB]

  • The Chapter includes the following Annexes:
    • Annex 8-A: Wine and Distilled Spirits
    • Annex 8-B: Information and Communications Technology Products
    • Annex 8-C: Pharmaceuticals
    • Annex 8-D: Cosmetics
    • Annex 8-E: Medical Devices
    • Annex 8-F: Proprietary Formulas for Pre-packaged Foods and Food Additives
    • Annex 8-G: Organic Products

9. Investment [PDF, 262KB]

  • This Chapter includes the following Annexes:
    • Annex 9-A: Customary International Law
    • Annex 9-B: Expropriation
    • Annex 9-C: Expropriation Relating to Land
    • Annex 9-D: Service of Documents on a Party Under Section B (Investor State Dispute Settlement)
    • Annex 9-E: Transfers
    • Annex 9-F: DL-600
    • Annex 9-G: Public Debt
    • Annex 9-H
    • Annex 9-I: Non-Conforming Measures Ratchet Mechanism
    • Annex 9-J: Submission of a Claim to Arbitration
    • Annex 9-K: Submission of Certain Claims for Three Years After Entry into Force
    • Annex 9-L: Investment Agreements
  • Drafters’ Note on Interpretation of In Like Circumstances [PDF, 43KB]
  •  See country-specific Annexes to the Agreement

10. Cross-Border Trade in Services [PDF, 126KB]

  • The Chapter includes the following Annexes:
    • Annex 10-A: Professional Services
    • Annex 10-B: Express Delivery Services
    • Annex 10-C: Non-Conforming Measures Ratchet Mechanism
  • See the country-specific Annexes to the Agreement

11. Financial Services [PDF, 251KB]

  • This Chapter includes the following Annexes:
    • Annex 11-A: Cross-Border Trade
    • Annex 11-B: Specific Commitments
    • Annex 11-C: Non-Conforming Measures Ratchet Mechanism
    • Annex 11-D: Authorities Responsible For Financial Services
    • Annex 11-E

See the country-specific Annexes to the Agreement

12. Temporary Entry for Business Persons [PDF, 43KB]

13. Telecommunications [PDF, 125KB]

  • This Chapter includes the following Annexes:
    • Annex 13-A: Rural Telephone Suppliers – United States
    • Annex 13-B: Rural Telephone Suppliers – Peru

14. Electronic Commerce [PDF, 60KB]

15. Government Procurement [PDF, 130KB]

16. Competition Policy [PDF, 44KB]

  • This Chapter includes the following Annex:
    • Annex 16-A: Application of Article 16.2, Article 16.3 and Article 16.4 to Brunei Darussalam

17. State-Owned Enterprises and Designated Monopolies [PDF, 221KB]

  • This Chapter includes the following Annexes:
    • Annex 17-A: Threshold Calculation
    • Annex 17-B: Process for Developing Information Concerning State-Owned Enterprises and Designated Monopolies
    • Annex 17-C: Further Negotiations
    • Annex 17-D: Application to Sub-Central State-Owned Enterprises
    • Annex 17-E: Singapore
    • Annex 17-F: Malaysia
    • Annex IV: Non-Conforming Activities
    • See country-specific Annexes to the Agreement

18. Intellectual Property [PDF, 411KB]

  • This Chapter includes the following Annexes:
    • Annex 18-A: Annex to Article 18.7.2 (International Agreements)
    • Annex 18-B: Annex to Article 18.50 (Protection of Undisclosed Test or Other Data) and Article 18.52 (Biologics)
    • Annex 18-C: Annex to Article 18.50 (Protection of Undisclosed Test or Other Data) and Article 18.52 (Biologics)
    • Annex 18-D: Annex to Article 18.46 (Patent Term Adjustments for Patent Office Delays), Article 18.48 (Patent Term Adjustment for Unreasonable Curtailment), Article 18.50 (Protection of Undisclosed Test or Other Data) and Article 18.52 (Biologics)
    • Annex 18-E: Annex to Section J (Internet Service Providers)
    • Annex 18-F: Annex to Section J (Internet Service Providers)

19. Labour [PDF, 73KB]

20. Environment [PDF, 170KB]

  • This Chapter includes the following Annexes:
    • Annex 20-A
    • Annex 20-B

21. Cooperation and Capacity Building [PDF, 27KB]

22. Competitiveness and Business Facilitation [PDF, 20KB]

23. Development [PDF, 33KB]

24. Small and Medium-Sized Enterprises [PDF, 21KB]

25. Regulatory Coherence [PDF, 39KB]

26. Transparency and Anti-Corruption [PDF, 88KB]

  • This Chapter includes the following Annex:
    • Annex 26-A Transparency and Procedural Fairness for Pharmaceutical Products and Medical Devices

27. Administrative and Institutional Provisions [PDF, 34KB]

28. Dispute Settlement [PDF, 105KB]

29. Exceptions and General Provisions [PDF, 62KB]

30. Final Provisions [PDF, 29KB]


Zip file of all 30 Chapters (excluding Annexes) [ZIP, 3.15MB]


Text of the Trans-Pacific Partnership – Annexes

The text of the Agreement was released by TPP Parties on 5 November 2015. The text will continue to undergo legal review and will be translated into French and Spanish language versions prior to signature.

Annex I – Cross-Border Trade in Services and Investment Non-Conforming Measures

Annex II – Cross-Border Trade in Services and Investment Non-Conforming Measures

Annex III – Financial Services Non-Conforming Measures

Annex IV – State-Owned Enterprises and Designated Monopolies Non-Conforming Measures

Side Instruments between Viet Nam and TPP countries

By Vietnam Law Insight

Disclaimer: This Briefing is for information purposes only. Its contents do not constitute legal advice and should not be regarded as detailed advice in individual cases. For more information, please contact us at

Công bố toàn văn Hiệp định Đối tác xuyên Thái Bình Dương (TPP)

(MOIT) – Theo thông lệ đàm phán thương mại quốc tế, một hiệp định sẽ chỉ được công bố sau khi các Bên tham gia đàm phán đã hoàn tất thủ tục rà soát pháp lý. Tuy nhiên, trước nhu cầu tìm hiểu thông tin rất lớn của người dân và doanh nghiệp, các nước tham gia đàm phán Hiệp định Đối tác xuyên Thái Bình Dương (TPP) đã quyết định công bố toàn văn Hiệp định TPP mặc dù thủ tục rà soát pháp lý vẫn chưa hoàn tất.

Các nước TPP đã thống nhất giao Niu Di-lân (nước được giao nhiệm vụ lưu chiểu văn kiện của Hiệp định) công bố toàn văn Hiệp định vào chiều ngày 05 tháng 11 năm 2015 (giờ Hà Nội).

Bộ Công Thương xin trân trọng công bố toàn văn Hiệp định TPP (bản tiếng Anh) đã được các nước TPP thống nhất. Do quá trình rà soát pháp lý vẫn đang tiếp tục nên bản công bố lần này chưa phải là bản cuối cùng. Bản cuối cùng có thể sẽ có một số thay đổi nhưng chỉ là các chỉnh sửa về mặt kỹ thuật, không ảnh hưởng đến nội dung cam kết.

Ngoài các nội dung cam kết trong Hiệp định, trong quá trình đàm phán các nước TPP cũng đạt được một số thỏa thuận song phương. Do các thỏa thuận này chỉ liên quan đến các Bên ký kết nên sẽ được các Bên ký kết công bố riêng. Bộ Công Thương xin công bố kèm theo đây các thỏa thuận song phương mà Việt Nam đã thống nhất với một số nước TPP. Các thỏa thuận này sẽ có hiệu lực cùng thời điểm với Hiệp định TPP.

Do các nước TPP vẫn đang tiến hành thủ tục rà soát pháp lý, khối lượng tài liệu phải biên dịch lại rất lớn nên Bộ Công Thương và các Bộ, ngành chưa thể công bố kèm theo bản dịch tiếng Việt của Hiệp định TPP. Để đáp ứng yêu cầu của người dân và doanh nghiệp, Bộ Công Thương sẽ tích cực phối hợp với các Bộ, ngành nhanh chóng hoàn tất công việc dịch thuật và công bố bản dịch tiếng Việt trong thời gian sớm nhất.

Sau khi công bố toàn văn Hiệp định, các nước TPP sẽ nhanh chóng hoàn tất thủ tục rà soát pháp lý để chuẩn bị cho việc ký kết Hiệp định. Mỗi nước, theo quy định của pháp luật nước mình, sẽ dành thời gian nhất định để người dân nghiên cứu Hiệp định trước khi ký kết, dao động từ 60 đến 90 ngày. Sau khoảng thời gian này, các nước TPP sẽ tiến hành ký kết chính thức. Thời điểm ký kết chính thức Hiệp định hiện chưa được xác định nhưng dự kiến sẽ không muộn hơn quý I năm 2016. Sau khi ký chính thức, các nước sẽ tiến hành thủ tục phê chuẩn Hiệp định theo quy định của pháp luật nước mình.

Please follow the links for full text of TPP released today.

  1. Chapter Texts and Associated Annexes
  2. Market Access Offers and Country-Specific Annexes
  3. Side Instruments between Viet Nam and TPP countries


Specific links

I. Chapter Texts and Associated Annexes

II. Market Access Offers and Country-Specific Annexes

III. Side Instruments between Viet Nam and TPP countries

Theo Website chính thức của Bộ Công Thương

By Vietnam Law Insight

Disclaimer: This Briefing is for information purposes only. Its contents do not constitute legal advice and should not be regarded as detailed advice in individual cases. For more information, please contact us at

Legal briefing October, 2015

Please click here to download our report: Legal Briefing October _ LNTpartners

I. Decree number 84/2015/ND-CP on investment monitoring and evaluation (“Decree 84”)

Sector: Investment_ Enterprise

Effective date: 20 November 2015


Decree 84 clarifies implemented subjects and stipulates the principles of monitoring and evaluation of investment activities. In addition, Decree 78 expands its scope of application, including objects and sorts of monitored investment.

  • As of the effective date, not only investment projects, but also investment programs would be monitored and evaluated;
  • Various kinds of monitored and evaluated investment are supplemented, such as: PPP investment projects; a list of investment programs and projects using State capital- without limiting the minimum capital rate; the offshore direct investment and community evaluation now stipulated in this Decree;
  • The responsibilities of monitoring become an initial part beside the regulations on content of such activities, which are allocated to the investors, authorities and related specialized agencies; and
  • Separated chapters regarding cost and capability of organizations and individuals performing monitoring consultants in evaluation of investment projects are newly stipulated;


This Decree provides new and innovative detailed guidelines for monitoring and evaluating investment, in comparison to the old Decree No. 113/2009/ND-CP on investment monitoring and evaluation.

Such clearer regulations can practically increase the responsibilities of investors and relevant authorities; also guarantee the effectiveness of monitoring and evaluation activities.

II. Decree No. 83/2015/ND-CP on stipulation of outbound investment (Decree 83)

Sector: Investment_ Enterprise

Effective date: 25 September 2015


Following the Law on Investment 2014, Decree 83 has been issued to provide detailed guidance for outbound investment activities as follows:

  • Each investment project is granted a project number, which shall be also outbound investment certificate number;
  • Appraisal process is removed. Project registration procedure is divided into 2 types: projects subject to outbound investment policy of the Prime Minister (PM) and projects not subject to outbound investment policy of the PM. Procedure for projects required outbound investment policy of the PM is similar to appraisal process under the Law on Investment 2005. Projects not subject to outbound investment policy shall require confirmation of SBV if their capitals transferring to foreign countries are: (i) in foreign currencies, and (ii) equal to 20 billion VND;
  • Investors are entitled to transfer money, assets to foreign countries to establish investment project before receiving Investment Registration Certificate. However, the value of such money and assets is restricted to be less than 5% of project capital or 300.000 USD (whichever is smaller); and
  • Investors have to report about the implementation of projects quarterly and to more authorities.


Procedure of registration is simplified and investors can transfer capital and assets to foreign countries before receiving IRC. This shall allow investment projects to be implemented more quickly and effectively.

However, investors are now obliged to frequently report the implementation of the project in writing as well as through online update. This might create more responsibilities for the investors.

III. Decree No. 78/2015/ND- CP dated 14 September 2015 on Enterprise Registration (Decree 78)

Sector: Investment_ Enterprise

Effective date: 1 November 2015


Decree 78 provides guidelines for enterprise registration procedures under the Law on Enterprise 2014. Some notable points of the Decree are as follows:

  • Online registration is now available. As such, the entire procedures for registering the formation of an enterprise or the changes in enterprise information may be carried out at the National Business Registration Portal (
  • The timeline for enterprise formation registration and for registration of changes in enterprise information is significantly reduced (from 5 to 3 working days).
  • The registrar agency must not request the enterprise to submit additional documents other than registration documents prescribed by laws.


Decree 78 is expected to significantly remove the administrative burdens from the backs of the investors and enterprises and improve the investment climate of Vietnam

IV. Decree No. 76/2015/ND-CP providing detailed regulations on the implementation of a number of articles of the law on real estate business (Decree 76)

Sector: Real estate

Effective date: 01 November 2015


Below are some salient points of Decree 76:

  • Legal capital required for real estate trading is minimum VND20 billion for all types of projects. Financial statement or bank acknowledgement is no longer required to prove the financial capacity with respect to the fulfilment of legal capital;
  • Model contracts for key real estate transactions are enclosed in the Decree for the parties to follow; and
  • Regarding transfer of the entirety or part of the project, procedures and detailed forms for application dossier and timeline for the approval process are specified.


Procedures for registration of the real estate business and project transfer are simplified and less time-consuming

The model contracts, while causing no restriction to freedom of contract, will help reduce disputes in the market.

V. Decree No. 82/2015/ND-CP dated 24 September 2015 regarding visa exemption for Vietnamese people residing overseas and foreigners who are spouses, children of Vietnamese people residing overseas or of Vietnamese citizens (Decree 82)

Sector: Civil

Effective date:15 November 2015


Decree 82 provides detailed guidance for procedures of issuance of visa exemption certificates and its conditions:

  • Regarding conditions for visa exemption, the applicant’s visa or equivalent document must be valid for at least one year;
  • Regarding the format of certificate, it shall be granted in the passport or a detached certificate in some certain circumstances;
  • The competence and processing procedures of authorities are more detailed than before. For example, processing procedure of overseas authority is separated from the Immigration Administration; and
  • The duration of certificate of temporary residence for people using certificates of visa exemption is extended to 6 months.


Although the processing time stays the same as Decision 135/2007/QD-TTg on the promulgation of the regulation on visa exemption for Vietnamese residing overseas, the procedure is now much clearer for applicants to follow.

The extension of certificate of temporary residence from 90 days to 6 months is considered to be a big support for Vietnamese people residing overseas to come back home country.

VI. Decision No. 41/2015/QD-TTg on selling shares in blocks (Decision 41)

Sector: Governmental management/ Corporate

Effective date: 15 September 2015


Decision 41 deals with withdrawal of state capital of unlisted public companies from joint-stock companies that have not been listed or registered on Upcom (Hanoi Stock Exchange), the ownership of which is represented by Ministries, ministerial agencies, Governmental agencies , People’s Committees of central-affiliated cities and provinces, state-owned corporations, and companies whose 100% charter capital is held by the State. The striking features of Decision 41 can be summarized as follow:

  • the sales of shares in blocks must be implemented via Stock Exchange by audit method with the following information: number and price of each block, status of investors attending audit, solutions in case of an unsuccessful audit. Each block must not be less than 5% of the company’s charter capital;
  • Starting price of the block, which is determined by a valuation organization, equals to the starting price of a share multiplied by the quantity of shares in a block; and
  • According to the Decision to approve the plan for selling shares in blocks issued by a competent authority and regulations on selling shares in blocks, the owner’s representative agency, the Chairperson of the Board of members, the President of the enterprise shall request the representative to cooperate with Stock Exchange in formulating the enterprise’s own statute on selling shares in blocks.


Decision 41 sets out a clear procedure and conditions for the withdrawal of the state in joint-stock companies, which is considered to be a concession of the Government in intervening into the market. As a result, a free market without control of the Government is constructed step-by-step.

VII. Decree 79/2015/ND-CP on  penalties for administrative violations against regulations on vocational training (Decree 79)

Sector: Administrative

Effective date: 01 November 2015


Decree 79 provides detailed regulations of administrative fines upon the violations related to: vocational school establishment; organization of vocational education quality control; vocational education organizations, student recruitment, program syllabus, class size, bridge programs and educational association in vocational education; test, examination; issue and utilization of certificates, degrees.

  • The limitation for the maximum fine is maintained at 75,000,000 VND for individuals, 150,000,000 VND for organizations;
  • There are not many changes in the rate of fines imposed on the violation of regulations, except for some certain violations in registration of vocational activities, maintenance of ratio of full-time teachers/ lecturers, and others; and
  • Beside a number actions which are newly added to the scope of administrative fine application, Decree 79 provides more remedial measures applicable to the violators, such as transferring illegal benefits obtained from the violations, cancellation of the decisions on admission, returning collected amounts to learners.


Financial penalties seem not to be strong enough to prevent individuals and organizations from violating regulations on vocational training. Hence, Decree 79 imposes more intensive preventative measures to violators to enhance the protection for the rights of learners as well as vocational education organization.

VIII. Circular No. 139/2015/ TT –  BTC providing guidance on guarantee for foreign loans on lent by the Government (Circular 139)

Sector: Banking and finance

Effective date: 01 November 2015


Circular 139 provides detailed guidance on the procedures for guarantee of loans, settlement of secured assets, and responsibilities of relevant Parties concerning the  foreign loans on-lent by the Government with the following remarkable regulations:

  • The execution of a guarantee contract depends on the involvement of the Ministry of Finance (MOF). If the MOF directly undertakes on-lending, a credit institution satisfying certain conditions set out by this Circular shall be nominated by the obligor to act on behalf of the Ministry of Finance (MOF) to perform loan guarantee operations. Upon approval by the MOF, a Security Service Agreement shall be executed between the MOF, the obligor and the credit institution.  If the MOF authorizes an on-lending agency to perform on-lending, the loan guarantee contract shall be signed between such agency and the obligor under the scope of on-lending authorization between the MOF and the agency;
  • The total value of secured assets must be equivalent to 100% of the loan; and
  • A loan guarantee contract must be registered with competent authority by the obligor regardless of the secured assets not required to be registered by the laws. If the obligor fails to register, either the disbursement process might be suspended or the total loans might be immediately recovered before the due date.


Decree 78/2010/ND-CP on on-lending of the Government’s foreign loans took effect as of 2010 with only one article on the loan security causing numerous issues during its implementation. On the other hand, Circular 139 offers solutions for this issue by forming a detailed legal basis for guarantee for foreign loans on-lent by the Government.

IX. Circular No. 15/2015/TT-NHNN guiding foreign currency transactions on foreign currency market for credit institution permitted to make foreign currency transactions (Circular 15)

Sector: Banking and Finance

Effective date: 05 October 2015


Circular 15 replaces a numbers of decisions providing guidance on foreign exchange transaction to regulate the exchange rates, terms, means and documents of the transaction, form of the transacting agreement as well as the responsibility of the authorized credit institutions and departments belonging to the State Bank of Vietnam concerning the foreign exchange transactions.

The most important point of the new Circular is the stipulation on the latest payment date of foreign exchange transactions. Particularly, regarding the spot transaction in swap transaction, the parties could agree on the payment date which is subject to be within two days from the transacting date. Meanwhile, regarding the forward transaction in the swap transaction, the payment date must not be later than the last date of transacting term which lasts from 3 to 365 days from the transacting date.


Circular 15 shall deter the foreign exchange hoard in financial market.

X. Decree No. 85/2015/ND-CP providing detailed regulation on a number of articles of the Labor Code on policies for female employees (Decree 85)

Sector: Labor

Effective date: 15 November 2015


Decree 85 provides in details state policies on female employees, which requires employers employing multiple female employees to conduct necessary works with the purpose of improving the working conditions, healthcare and also supporting female employees in taking care of their children.

In return, employers may enjoy notable policies as follows:

  • Employers investing in building nurseries, kindergartens and healthcare facilities which meet statutory requirements may be entitled to enjoy incentives under the current policies encouraging socialization in education, occupational training and medical health as provided by the laws, e.g. exemption of land lease fees or corporate income tax incentives (tax rate, tax exemption and reduction);
  • Employers may also be entitled to incentives as stipulated in the Law on Residential Housing if investing in constructing residential housing for employees; and
  • Additional expenses for female employees may be included in deductible expenses for income tax purposes as provided by the laws.


Decree 85 shows the effort of the Government in encouraging employers to practically ensure and improve working conditions for female employees, through which employers may receive preferential support from the State of Vietnam, by ways of. tax incentives, upon satisfaction of certain conditions stipulated by the laws.


By Vietnam Law Insight

Disclaimer: This Briefing is for information purposes only. Its contents do not constitute legal advice and should not be regarded as detailed advice in individual cases. For more information, please contact us at

New tendering law challenges foreign pharma producers

On November 26 2013 the National Assembly passed the new Law on Tendering, which came into force on July 1 2014. The new law (which replaces the 2005 Law on Tendering) relates to state management of the tendering process and governs the responsibilities of concerned parties as well as tendering activities.

While the new law is expected to afford greater equality among local tender participants (and promote access for small and medium-sized enterprises), its promotion of local players in the drug market at the expense of foreign players has caused concern. The law now explicitly provides preferential treatment to domestically produced drugs, which is expected to have a considerable impact on foreign investors active in this burgeoning market.

Extent of preferential treatment

Before the enactment of the new law, no clear preferential treatment was given to domestic drugs under Vietnamese law. The only minor mention was Article 16 of Circular 1/2012/TTLT-BYT-BTC (January 19 2012), pursuant to which the relevant authority gave priority to drugs produced domestically (but only for drugs of similar quality and a price no higher than the drugs imported at the time of tender). Under this circular, the criteria for selecting the winning bid was based on both the price and quality of the pharmaceutical products. No other preferential treatment existed.

However, the new law takes a protectionist approach, which directly and indirectly adversely affects foreign players in the market. The preferential treatment afforded by the circular is drastically expanded under the new law – almost to the extent that it drives foreign players out of the market.

As a direct impact, the law now prohibits those offering tenders from providing imported drugs if there are domestic drugs available that fully satisfy the requirements on medical treatment, price and availability (according to criteria published by the Ministry of Health). To add a further layer of restriction, Decree 63/2014/ND-CP (June 26 2014), which guides the tendering selection provisions in the new law, states that if any tenders are ranked equally after applying all preferential treatments, the tender that involves higher domestic production costs and uses more local employees will prevail.

As an indirect impact, the law sets a preferential treatment regime for participants in domestic and international tenders. This does not apply only to pharmaceutical players. Participants in domestic or international tenders to supply goods in which domestic production costs account for 25% of production or more will receive preferential treatment. For the supply of services, foreign tenderers in partnership with domestic tenderers which give 25% or more of the work value of the tender package to domestic tenderers will receive preferential treatment.

While these provisions apply to all industries, among the hardest hit will be those in the pharmaceutical industry.

Ambiguity in new law

While the term ‘domestic pharmaceutical products’ is used extensively in the law, a clear definition has not been provided. As domestic products are given preferential treatment, the law’s ambiguous system of classification is problematic. The number of disputes concerning the precise classification of ‘foreign’ pharmaceutical products which are partly produced (eg, packaging) in Vietnam has already increased considerably.

Decree 63/2014/ND-CP (which guides the new law) fails to address this matter, despite commentators previously stating that it was a pressing issue that had to be addressed. The lack of clarity has led to industry-wide uncertainty as to whether foreign pharmaceutical products processed in Vietnam should be considered domestic pharmaceutical products, thereby creating roadblocks in tendering activities.


As the protectionist provisions of the law come into force, foreign pharmaceutical players are expected to face greater obstacles in building a presence in Vietnam. This comes at an inconvenient time, when the number of drugs imported by domestic pharmaceutical companies is increasing. It also comes at a time when the government is increasing its efforts to promote foreign direct investment into the economy.

Together with the already stringent restrictions against foreign pharmaceutical players in Vietnam, the new law seems to pave the way for an environment that fosters an almost monopolistic position for domestic pharmaceutical companies. While Vietnam has a competition law regime in place, these provisions effectively compromise their effectiveness in the pharmaceutical industry.

As the demand for life-changing innovations increases, the only real winners in this industry are domestic players. However, as the industry’s competitiveness is lessened, the losers will be not only foreign players, but also the Vietnamese economy as a whole.

By Vietnam Law Insight, LNT & Partners.

Disclaimer: This Briefing is for information purposes only. Its contents do not constitute legal advice and should not be regarded as detailed advice in individual cases. For more information, please contact us or visit the website: Http://

Biomedicine: The Pillar Industry of the World’s Economy

Vietnam’s biomedicine (BME) sector has attracted much attention over the past few years. In 2010 Vietnam hosted an international two-day conference, with experts from 21 countries. The conference attendees identified a tremendous need for BME in areas of rehabilitation, neurosurgery and orthopaedics.

At the present time Vietnam is importing the majority of its BME products, but it is also developing its own solutions used in therapeutics, diagnostics and vaccinations, which are being used in Vietnam as well as being sold abroad.

It is still early, but with a few modest commercial successes thus far, I expect more and more innovations and investment will be made in Vietnam’s BME industry.

In 2013, approximately 92% of Vietnam’s medical device market was supplied by imports, with most of the devices being supplied by Japan, USA, Singapore and China.

However, we are starting to see more Vietnamese companies becoming much more adept at developing their own BME products. Specifically, we are seeing more and more companies develop and manufacture products in Vietnam with sales in developed countries. For example, diagnostic products have been simplified yet are yielding more accurate information, competing with established international brands. We are also seeing an increase in use of stem cell therapy.

The country is also deploying more foreign trained experts into the education system to lead more research and development and innovation at universities. There is also a push for researchers to collaborate with the private sector to accelerate product development for commercial use domestically and globally.

The biomedical field in Vietnam is driven, in large part, by a desperate need to care for 92 million people. The government has allocated hundreds of millions of dollars to develop health care facilities and foreign investors are active in the health care sector. With a large consumer base and growing middle class, local biomedical firms in Vietnam have a viable market to sell products.

In terms of developing products, Vietnamese students with specialized skills in this area are dramatically underpaid compared to their counterparts from more developed countries. A biomedical company in Vietnam can develop products at a fraction of the cost in other countries, yet can sell at margins that would dwarf margins currently enjoyed by biomedical companies in jurisdictions like the US and Japan.

In so far as challenges for the BME industry In Vietnam, there is a lack of industry cohesiveness. Investors do not readily have reliable information about viable biomedical companies to financially support them. We believe, however, that the components of a BME industry are starting to come together and foreign investors are starting to notice, in large part due to Vietnamese abroad who are returning to Vietnam to establish companies or conduct research.

A strong organization devoted to the dissemination of information related to the BME industry would accelerate the development of a viable environment to support and further grow this industry. Government support as well as a coordinated effort among universities to encourage innovative research would further push BME forward.
For example, we are supporting the development of the $100 million Biotechnology Center in Ho Chi Minh City. This centre may serve as the magnet to attract a critical mass of researchers, investors, and private companies to come together in this sector.

The outlook for biomedicine over the next 12 months is very bright. Vietnam has all the key ingredients that will propel it forward: a large population experiencing a rise in chronic and acute illnesses, a successful diaspora trained and educated abroad that are returning to create companies and conduct research, and a plentiful pool of young and highly skill professionals who can be hired at highly cost effective rates.

For example, in 2012 four Vietnamese students studying at Portland State University under the auspices of the Intel Vietnam Scholars Program won the top prize at the Cornell Cup, a design competition created to empower student teams to become the inventors of the newest innovative applications of embedded technology. This nation-wide competition in the US attracted 22 other teams, including engineers from MIT and the University of California, Berkeley. The Vietnamese team developed a prescription drug identification device used to help doctors prescribe the correct medication for patients.

The world is beginning to notice Vietnam. From Japan alone, seven Japanese medical equipment manufacturers comprising of Konica Minotal, Toshiba, Fujifilm, Olympus, Hitachi, Mitsubishi Electric and Nihon Kohden are targeting increased sales in Vietnam.

There is, however, increasing evidence that Vietnamese researchers are rising to the challenge of harnessing biotechnology to improve health care for healthier society as well as advancing the sciences.

The biotech progresses for medical applications in Vietnam include gene diagnostics for genetic disorders of human diseases, in-vitro synthesis and production of therapeutic proteins including insulin, IFNs or similar forms of monoclonal antibodies for targeted therapies, and cell therapies via application of cord blood and bone marrow stem cells for cancer therapies. We fully expect at least one Vietnamese biomedical company will be acquired or listed on a public exchange in the next 12 to 18 months.

By Vietnam Law Insight, LNT & Partners.

Disclaimer: This Briefing is for information purposes only. Its contents do not constitute legal advice and should not be regarded as detailed advice in individual cases. For more information, please contact us or visit the website: Http://

Draft circular to make foreign drug importers sick

The Ministry of Health (MoH) has just introduced the latest draft circular (Draft 13) providing guidelines for foreign direct investment (FDI) pharmaceutical enterprises to implement import-export rights in the pharmaceutical field in Vietnam.

Although it reflects some suggestions by FDI enterprises in relation to the expansion of businesses’ rights, LNT & Partners’ partner Nguyen Anh Tuan says it still has some shortcomings that need to be addressed before promulgation.

The category of “FDI enterprises in the pharmaceutical field” that are permitted to carry out drug import-export activities is defined by Article 3.11 of Draft 13.

According to this provision, in order to implement the drug import and export rights, FDI enterprises must invest in one of the following activities – drug manufacturing, drug storage services and drug testing services. This provision expanded the range of enterprises permitted to have the drug import-export rights defined under Decree No79/2006.

However, enterprises with drug import rights stipulated in their investment certificates still cannot directly import from overseas, even if pursuant to the Pharmaceutical Law, drug import and export are drug business activities that are independent from these aforementioned activities. In addition to the aforementioned business lines, in accordance with Article 5 of Draft 13 “Conditions for implementing the drug import rights”, FDI pharmaceutical enterprises must meet other conditions for being considered a grant of a Certificate of Satisfaction of Conditions (CSC) for drug import activities. These include(1) being licenced with drug import rights in its investment certificate, (2) holding the respective CSC for implementing drug manufacturing, drug storage services and drug testing services and (3) having drug storage warehouses with GSP standards. Upon satisfaction of all these conditions, FDI enterprises operating in the pharmaceutical field seeking to implement drug import and export rights need to undertake the following steps, (1) complete the registration for issuance of the investment certificate with the investment management authorities, (2) have a drug preserving warehouse of GSP standard and (3) request for issuance of the CSC in the pharmaceutical field (Article 6 of Draft 13). As a direct consequence of the above restrictions, FDI pharmaceutical enterprises are not permitted to conduct drug import activities independently. In order to implement the drug import rights, they are required to engage other drug trading businesses (such as drug manufacturing or drug storage services) together with drug import activities in their investment licences, obtain the relevant CSC and build a warehouse of GSP standard for drug preservation.

These requirements not only increase the investment capital of FDI pharmaceutical enterprises, but also consume a lot of time. In addition, as mentioned above, these restrictions conflict with Vietnam’s WTO commitments and Article 11 of the Pharmaceutical Law. Hence, their legitimacy is in dispute.

Notwithstanding being restricted on conditions for drug import, FDI pharmaceutical enterprises are also limited to choices of business partners in Vietnam. According to Article 7.3 of Draft 13, FDI enterprises are only permitted to carry out trading activities with and selling imported drugs to certain Vietnamese pharmaceutical entrepreneurs who meet distribution conditions regulated by the MoH, namely the enterprises that either (1) engage a chain of GPP pharmacies, (2) have distribution centers as regulated by the MoH or (3) have warehouses of GSP standard, and a drug distribution system of GSP standard and a computer software system to manage goods. As such, this regulation if passed, will directly limit FDI enterprises’ right to choose business partners, thereby centralising the imported drug distribution rights to a few domestic enterprises that meet the above standards. As a matter of law, since the Pharmaceutical Law and its promulgating documents regulate the conditions for granting the CSC for drug distribution activities, these limitations are not necessary and lack convincing foundations.

In relation to distribution activities, FDI enterprises are still not allowed to implement drug distribution activities in Vietnam, except for distributing drugs that are manufactured by themselves in Vietnam (Articles 9.1 and 9.2 of Draft 13). Also, FDI enterprises are not allowed to conduct some activities relating to the implementation of distribution rights as specified in Article 9.3, which includes contributing charter capital to Vietnamese distribution enterprises. This limitation conflicts with Vietnam’s WTO Commitments in which foreign investors are allowed to do their business by way of establishing new companies, contributing capital or purchasing shares in enterprises in Vietnam.

Moreover, when the circular is promulgated remains a valid question. It appears that FDI enterprises that seek to be licenced with a CSC must wait until this proposal is officially promulgated. It is not difficult to recognise that these limited regulations of adjusting the FDI enterprises’ activities relating to drug import-export activities regulated by the MoH decrease the competitiveness of FDI enterprises in the Vietnamese pharmaceutical market. Hence, FDI enterprises face many difficulties in expanding their business in order to meet their patients’ needs and to serve the public’s health system.

For the time being, pharmaceutical products may only be imported into Vietnam through domestic pharmaceutical companies possessing import licences. FDI pharmaceutical enterprises that have been granted drug import rights in their investment licences can only import drugs through consignment due to an absence of a CSC for drug import activities.

The inconsistency in the regulations and the MoH’s postponement of promulgating documents instructing the import-export activities of FDI pharmaceutical enterprises has inadvertently created policy barriers against FDI pharmaceutical enterprises in penetrating drug import and distribution fileds in Vietnam.

Although it was expected to remove these barriers to create free and fair competition between FDI and local enterprises in pharmaceutical markets, unfortunately Draft 13 has not yet met this expectation and requires further revisions to meet this goal.

By Vietnam Law Insight, LNT & Partners.

Disclaimer: This Briefing is for information purposes only. Its contents do not constitute legal advice and should not be regarded as detailed advice in individual cases. For more information, please contact us or visit the website: Http://