Acquiring an existing dental clinic rather than building from scratch is an attractive proposition for many US investors—it offers an established patient base, trained staff, existing equipment, and an operational infrastructure that can be faster to bring to international standards than a greenfield development. However, dental clinic acquisitions in Vietnam involve a specific set of legal considerations that differ significantly from typical commercial M&A.
This guide examines the legal framework for US investors seeking to acquire existing dental clinics in Vietnam.
What ‘Buying’ a Dental Clinic Means Under Vietnamese Law
In Vietnam, ‘buying’ a dental clinic can mean one of two things:
1. Share/equity acquisition: Purchasing shares or capital contributions in the company that owns and operates the dental clinic. The clinic entity (and its operating license) remains intact; only the ownership of the entity changes. 2. Asset acquisition: Purchasing the physical assets of the clinic (equipment, lease rights, goodwill) without acquiring the corporate entity. In this case, the operating license does not transfer—the buyer must apply for a new operating license for the same premises.
For US investors seeking the fastest path to operation, share acquisition (which preserves the existing operating license) is generally preferred. However, share acquisition also transfers all existing liabilities of the target entity.
Due Diligence Requirements for Dental Clinic Acquisitions
Before any acquisition, US investors must conduct thorough legal, financial, and operational due diligence:
Corporate due diligence: Verify the legal structure of the target entity; confirm share ownership and capitalization; check for encumbrances, pledges, or liens on shares.
License verification: Confirm the dental clinic’s operating license is valid, has not been suspended, and covers the services currently offered. Review all amendments and changes to the license history.
Practitioner verification: Verify that all practicing dentists hold valid Vietnamese practice licenses. Confirm the responsible clinical director’s license status and compliance with Decree 96/2023/ND-CP requirements.
Lease review: Confirm the clinic’s property lease is valid, transferable (or assignable to the new owner), and has sufficient remaining term to support the business plan.
Equipment inventory: Assess equipment condition, verify radiation safety permits for X-ray equipment are current, and confirm all equipment meets Decree 96/2023/ND-CP standards.
Financial due diligence: Review revenue, patient volume, outstanding liabilities, tax compliance records, and social insurance obligations.
Foreign Investor Restrictions in Share Acquisitions
When a US investor acquires shares in a Vietnamese dental clinic company, they must comply with:
Foreign ownership approval: A share acquisition that results in a foreign investor owning 51% or more of a Vietnamese healthcare entity triggers an Investment Registration Certificate (IRC) requirement. The US investor must file for an IRC approval before completing the acquisition.
Healthcare operating license amendment: Any change in ownership of a licensed healthcare facility must be reported to the provincial Department of Health. Significant ownership changes may trigger a requirement for a license amendment or re-issuance.
Notification to tax authorities: The share transfer must be reported for capital gains tax assessment (generally 20% on the seller’s gain).
The Operating License After Acquisition
This is one of the most critical legal questions in dental clinic M&A in Vietnam: does the operating license survive the acquisition?
Share acquisition: The operating license generally remains valid after a share transfer, as it is issued to the facility (legal entity), not to the individual owner. However, the responsible clinical director’s details on the license must remain current—if the responsible director changes as a result of the acquisition, the license must be amended.
Asset acquisition: The operating license does not transfer with assets. The buyer must apply for a new operating license for the clinic premises. This requires the buyer’s own qualified responsible director and a full facility inspection by the Department of Health.
US investors pursuing asset acquisitions should budget 6–12 additional months for the new operating license process.
Post-Acquisition Compliance Integration
After completing the acquisition, US investors must ensure the clinic’s compliance posture is brought into alignment with Vietnamese regulations and their own standards:
Conduct an immediate compliance audit against the checklist requirements of Decree 96/2023/ND-CP (facility standards, infection control, radiation safety, staffing).
Review all staff employment contracts for Vietnamese labor law compliance.
Confirm work permit status for any foreign employees.
Verify that all equipment maintenance and calibration is current.
Address any legacy compliance gaps identified in due diligence before MOH inspections occur.
Practical Considerations for US Investors
Engage a Vietnamese healthcare lawyer before signing any letter of intent or share purchase agreement—dental clinic M&A has healthcare-specific requirements that general M&A counsel may miss.
Budget for the IRC amendment process, which adds time and cost to the acquisition.
Expect the post-acquisition license amendment process to take 30–60 days if only the responsible director is changing, and potentially 6–12 months if a full re-issuance is required.
Factor legacy liabilities (unpaid taxes, social insurance arrears, lease disputes) into acquisition pricing through indemnities or price adjustments.
Consider a transitional operating agreement with the seller to maintain clinic operations during the regulatory transition period.
Conclusion
US investors can acquire existing dental clinics in Vietnam through share or asset acquisition, each with different implications for the operating license and compliance continuity. Thorough legal due diligence and expert regulatory guidance are essential to protect the investment. TTVN Legal provides healthcare-specific M&A legal services for US dental investors in Vietnam.
Need expert legal support for healthcare investment in Vietnam? TTVN Legal | 101 Nguyen Van Thu, Tan Dinh Ward, Ho Chi Minh City, Vietnam +84 349661336 | tham@ttvnlegal.com.vn | https://ttvnlegal.com.vn/
