Vietnam’s healthcare sector is experiencing rapid modernization, creating significant opportunities for foreign investors in medical technology transfer. This comprehensive guide outlines the essential requirements and processes for successful technology transfer in Vietnam’s medical sector.
Overview of Vietnam’s Medical Technology Sector
The medical technology industry in Vietnam has experienced significant growth in recent years, as indicated by research from VIRAC. Spending on healthcare products and services has increased by 11% over the past decade, reflecting the sector’s rapid development. Notably, digital healthcare revenue reached USD 968.2 million in 2023 and is projected to grow 1.5 times by 2027, according to Statista
Legal Framework and Regulatory Environment
Understanding Vietnam’s legal framework is crucial for successful medical technology transfer. The process is primarily governed by:
- Law on Technology Transfer (2017)
- Law on Medical Devices (2016)
- Ministry of Health regulations on medical equipment
- Ministry of Science and Technology guidelines
More information can be found on the official Ministry of Health website.
Step-by-Step Transfer Process
Technology with limited transfer
As outlined in Article 28,29 of the Law on Technology Transfer 2017, foreign investors must provide the following documentation to ensure compliance with local regulations :
Step 1: Submit Application for Technology Transfer
- Application for approval of technology transfer;
- Documentation verifying the legal status of the applicant;
- Explanatory materials on the technology;
- Explanatory materials on the conditions for utilizing the technology as prescribed by law;
- Explanatory materials on compliance with legal standards and technical regulations.
Timeline and Procedure:
- Submit the dossier to the Ministry of Science and Technology (MOST).
- MOST reviews the dossier within 3 working days. If incomplete, the applicant must supplement the dossier.
- Within 30 working days of receiving a complete dossier, MOST issues an approval or rejects the request with reasons.
Step 2: Application for Technology Transfer License (Article 30)
After Approval:
- The parties sign the technology transfer contract.
- Within 60 days of signing the contract, the applicant submits a dossier for the transfer license to MOST.
Dossier requirements:
- Application for a Technology Transfer License, stating the parties’ commitments to comply with legal regulations;
- Documents verifying the legal status of the contracting parties;
- Original or certified copy of the technology transfer contract, with a notarized Vietnamese translation if not in Vietnamese;
- List of related technology, machinery, and equipment documents (if applicable);
- Certified copies of intellectual property protection certificates (if any);
- Standards and quality of products/services from the transferred technology;
- Explanation of technology usage conditions;
- Valuation document for technology using state capital (if applicable).
Timeline and Procedure:
- MOST reviews the dossier within 5 working days. If amendments are needed, the applicant has 60 days to comply.
- MOST issues the license within 15 working days of receiving a complete dossier or rejects the request with reasons.
Technology under Clause 2 of Article 5
For technology transfers covered by Clause 2 of Article 5 (Investment project, marking capital contribution by technology, franchise agreement and transfer of IP rights), foreign investors must adhere to specific requirements outlined in Article 31 of the Law on Technology Transfer 2017:
- Application for technology transfer registration with commitments to legal compliance;
- Original or certified copy of the agreement, with a notarized Vietnamese translation if needed.
Timeline and Procedure:
- The applicant must submit the registration within 90 days of signing the transfer agreement.
- The authority reviews and issues a certificate within 5 working days of receiving a complete dossier or rejects the application with written reasons.
For foreign companies interested in entering the medical equipment distribution market in Vietnam, you can refer to this detailed guide on the requirements for obtaining medical equipment distribution licenses in Vietnam
Technical Standards and Compliance
All medical technology transfers must comply with a series of regulatory and legal requirements to ensure the safety, effectiveness and quality of the products. Decree No. 98/2021/ND-CP and other national and international standards outline the key requirements:
- Vietnamese quality standards for medical devices: all medical technology transferred to Vietnam must meet the national quality standard set by the Ministry of Health and designed to ensure that medical devices are safe and effective.
- International safety standards (ISO, CE, FDA as applicable): all medical technology transfers must also comply with international safety standards such as ISO, CE marking and FDA approval, depending on the nature of the technology and the markets in which it is intended to be used.
- Environmental compliance requirements: medical technology must comply with environmental regulations to minimize any potential harm to the environment during its use, disposal or manufacturing process. Therefore, medical devices must meet environmental standards set by the Ministry of Natural Resources and Environment. (Law on Environmental Protection 2020)
- Local manufacturing standards (if production is involved): if medical technology transfer involves local manufacturing in Vietnam, the transfer must comply with Vietnam’s local manufacturing standards to ensure that the manufacturing process follows best practices for quality, safety and efficiency (GMP).
Common Challenges and Solutions
Challenges
Foreign investors often encounter:
- Complex Regulatory Requirements: Navigating diverse regulations, intellectual property laws, and industrial standards can be time-consuming and confusing.
- Language Barriers: Language differences can cause misunderstandings in contracts and technical documents, affecting the transfer process.
- Cultural Differences in Business Practices: Varying business customs and decision-making styles across countries can impact negotiations and partnerships.
- Technical Adaptation Needs: Adapting the technology to local infrastructure, market needs, or regulations may require significant modifications.
Solutions
To overcome these challenges:
- Partner with Local Consultants: Local experts can guide investors through regulatory requirements, ensuring compliance and speeding up approval processes.
- Use Qualified Translators: Engaging experienced translators ensures accurate communication, preventing misunderstandings and legal issues.
- Build Strong Local Relationships: Establishing trust with local partners helps bridge cultural gaps and facilitates smoother collaboration.
- Stay Flexible with Technical Adaptation: Adapting technology to local conditions and infrastructure is key to a successful transfer.
Best Practices for Successful Technology Transfer
To ensure successful technology transfer:
- Conduct Market Research: Thorough research helps investors understand local market needs, risks, and regulations, ensuring the transfer is feasible.
- Establish Clear Communication: Maintaining transparent communication with local partners ensures alignment and addresses issues quickly.
- Offer Comprehensive Training: Training local staff ensures they are equipped to manage the technology effectively and increases the transfer’s success rate.
- Document the Process: Detailed documentation helps track the transfer, ensuring compliance and providing a reference for future issues.
- Plan for Ongoing Support: Long-term technical support ensures the technology remains effective and operational in the local market.
Conclusion
Successfully transferring medical technology to Vietnam requires careful planning, thorough understanding of requirements, and strategic implementation. While challenges exist, the growing healthcare market and supportive government policies make Vietnam an attractive destination for medical technology transfer.
For foreign investors looking to enter Vietnam’s medical sector, staying compliant with regulations while maintaining efficient operations is key to long-term success. Proper preparation and partnership with local experts can significantly smooth the technology transfer process.
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