Clinic Setup Vietnam: Investment Law Framework for US Healthcare Entrepreneurs and Private Equity

Vietnam’s investment environment for healthcare has become significantly more transparent following the restructuring of the Law on Investment 2020 and its subsequent implementation. For US private equity funds with healthcare portfolios, venture capital-backed digital health companies, and healthcare entrepreneurs structuring multi-entity investments, Vietnam presents an attractive combination of market opportunity and regulatory predictability — provided the investment is structured correctly from the outset.

This article addresses the investment law dimension of clinic setup in Vietnam — the layer that sits above the healthcare-specific licensing requirements and governs how US investors legally establish and own Vietnamese healthcare businesses.

Vietnam’s WTO accession commitments under the General Agreement on Trade in Services (GATS) explicitly permit foreign investment in healthcare services, including hospital services, and other human health services. However, Vietnam retains the right to impose conditions on foreign participation — and exercises this right through the investment licensing system and the healthcare-specific operating license framework.

Under the Law on Investment 2020, healthcare services are classified as a conditional business sector (nganh nghe kinh doanh co dieu kien). This means that while foreign investment is permitted, it is subject to specific conditions set out in the healthcare sector legislation — primarily the Law on Medical Examination and Treatment 2023 and its implementing decrees.

Before a foreign-owned healthcare business can operate, it must complete investment registration under the Law on Investment 2020. Key steps:

Step 1: Investment Registration Certificate (IRC)

For projects meeting certain thresholds (or for all FDI projects in conditional sectors), the Department of Planning and Investment issues an Investment Registration Certificate. This document authorizes the investment and specifies the permitted business activities. For healthcare investments, the IRC must explicitly authorize healthcare activities under the relevant VSIC business codes.

Step 2: Enterprise Registration Certificate (ERC)

Following the IRC, the investor registers the legal entity under the Law on Enterprises 2020. The ERC establishes the company as a legal entity in Vietnam. The company’s charter must correctly reflect the healthcare business purpose and ownership structure.

Step 3: Healthcare Facility Operating License

Only after both the IRC and ERC are in place can the company apply to the Ministry of Health or relevant provincial Department of Health for the healthcare facility operating license. This is the license that authorizes clinical operations.

• 100% Foreign-Owned Enterprise:  the most common structure for US investors seeking full management control. No Vietnamese partner required. Fully remittable profits. Standard for most clinical investments under USD 10 million.
• Joint Venture:  co-investment with a Vietnamese partner (individual or entity). Can accelerate administrative approvals in some provinces. Requires careful governance documentation to protect US investor rights, including charter provisions, exit rights, and dispute resolution mechanisms.
• Business Cooperation Contract (BCC):  contractual cooperation without creating a new legal entity. Used by some US companies for management services arrangements or technology licensing to Vietnamese healthcare partners. Does not require separate investment registration for all forms.

Vietnam does not impose a general minimum capital requirement for foreign-invested healthcare enterprises, but the investment project description in the IRC must include a specific capital commitment consistent with the project scale. For a specialist clinic, the registered capital must be sufficient to cover the facility setup, equipment, and operating costs described in the project proposal.

Profit repatriation for foreign-invested enterprises is permitted under Vietnamese law after fulfillment of Vietnamese tax obligations. US investors should note that Vietnam-source income of a Vietnamese legal entity is subject to corporate income tax (currently 20%), and dividends remitted to the US investor may be subject to withholding tax. TTVN Legal coordinates with licensed tax consultants on the optimal structure for each client.

The United States and Vietnam have been engaged in discussions regarding a Bilateral Investment Treaty (BIT), though as of the date of this publication, no BIT is in force. In the absence of a BIT, US investors rely on Vietnam’s domestic investment protection framework under the Law on Investment 2020, which provides protections against expropriation, guarantees on profit repatriation, and access to international arbitration for investment disputes.

US investors should structure their transactions with this in mind — appropriate dispute resolution clauses in joint venture agreements and business cooperation contracts are essential protective mechanisms in the absence of a BIT.

US venture-backed digital health companies entering Vietnam face an additional regulatory layer: telemedicine and digital health services are subject to both the Law on Medical Examination and Treatment 2023 (for clinical services) and the Law on Information Technology (for the technology platform). TTVN Legal’s healthcare legal consulting service encompasses digital health regulatory compliance — including telemedicine platform licensing, electronic medical record system compliance, and personal health data protection under the new personal data protection framework.