Obtaining Medical Equipment Distribution Licenses in Vietnam: Requirements for Foreign Companies

Vietnam’s medical equipment market has seen remarkable growth in recent years, making it an attractive destination for foreign companies looking to establish distribution operations. However, navigating the licensing process is essential to ensure compliance with local regulations and achieve successful market entry.

Legal Framework for Medical Equipment Distribution in Vietnam

The distribution of medical equipment in Vietnam is primarily regulated by Decree 98/2021/ND-CP, along with additional circulars issued by the Ministry of Health. These regulations provide a comprehensive framework that governs licensing, quality control, and operational standards for medical device distributors. Understanding and adhering to these legal requirements is essential for foreign companies intending to operate in this sector.

Prerequisites for Foreign Companies 

Foreign companies looking to apply for a distribution license in Vietnam must meet several key prerequisites:

1. Establishing a Legal Entity in Vietnam
   Foreign companies must establish a legal presence in Vietnam before applying for a distribution license. They can do so by setting up a representative office, a branch, or a wholly-owned local company, as required by Article 25 of Decree 98/2021/ND-CP.
2. Employing Qualified Personnel
   It is mandatory for foreign companies to employ personnel who possess relevant medical or pharmaceutical qualifications. This ensures that the company is capable of handling the technical and regulatory demands of the medical equipment distribution industry. Requirements for qualified staff are detailed in Articles 40.1 and 40.3.a of Decree 98/2021/ND-CP.
3. Maintaining Adequate Storage Facilities
   To meet the regulatory standards, foreign companies must maintain storage facilities that comply with Good Storage Practice (GSP). This ensures that medical devices are stored safely and meet the necessary quality standards outlined in Article 40.2 of Decree 98/2021/ND-CP.
4. Implementing a Quality Management System
   A robust quality management system is crucial to ensuring the consistency and safety of medical devices. Foreign companies must establish and maintain such systems in accordance with the requirements set forth in Article 8 of Decree 98/2021/ND-CP.

Step-by-Step License Application Process

The application process and documentation for the Declaration of Sufficient Conditions for the Trading of Medical Devices based on Article 41 of Decree 98/2021/ND-CP:

The application process involves several crucial stages:

Step 1: Submit the declaration documentation to the Department of Health where the trading location is located before beginning the medical device trading activities. The submission must include proof of payment of the required fees in accordance with the Ministry of Finance’s regulations.

Step 2: The Department of Health will review the documentation and publicly post the details of the declaration on the electronic portal for medical device management.

Step 3: During the operation, if there are any changes to the information in the declaration, the entity must:

• Notify in writing with relevant documents.
• Update the declaration on the portal within 3 working days from the date of the change.

You can visit the Ministry of Health’s official website directly through this link: https://moh.gov.vn/vi.

Documentation Requirements

Essential documents for the application include:

Post-License Compliance and Maintenance

After obtaining a license for medical device distribution, companies must comply with the regulations in Article 74 of the Law on Medical Equipment, which outlines the responsibilities of organizations and individuals involved in trading medical devices. The key obligations include:

1. Maintaining Detailed Transaction Records: Distributors must ensure that comprehensive records of all transactions, including sales and distributions of medical devices, are kept accurate and up-to-date. This helps provide transparency and traceability, which is crucial for regulatory oversight.
2. Regular Reporting to Regulatory Authorities: Distributors must submit periodic reports to relevant health and regulatory authorities. These reports typically include data on sales, inventory levels, and any incidents or complaints related to the products, ensuring the authorities are informed and can monitor compliance.
3. Ensuring Continuous Compliance with Quality Standards: It is essential for distributors to consistently meet the required quality standards for the medical devices they handle. This includes ongoing quality control, as well as adhering to good distribution practice (GDP) and good storage practice (GSP).
4. Participation in Post-Market Surveillance: Companies must actively engage in post-market surveillance activities. They monitor the safety and performance of devices after sales, taking corrective actions like issuing product recalls or safety warnings when issues arise.

Common Challenges and Solutions

Foreign companies often face several challenges when obtaining distribution licenses:

1. Complex Documentation Requirements

Solution: Collaborating with local consulting firms that have in-depth knowledge of the Vietnamese regulatory environment is essential. These firms help navigate the complex documentation process by ensuring accurate preparation and submission of all required documents.

2. Language Barriers

Solution: To overcome language barriers, it is advisable to hire certified translators for all official documents, ensuring compliance with legal requirements. Additionally, employing bilingual staff can facilitate smooth communication with Vietnamese regulatory authorities and ensure timely responses to any inquiries.

3. Facility Compliance

Solution: Foreign companies should invest in the necessary infrastructure to meet the compliance standards set by Vietnamese authorities, particularly those related to Good Distribution Practice (GDP) and Good Storage Practice (GSP). To identify and address any compliance gaps before they become issues during inspections, conduct regular internal audits and inspections.

FAQ Section

• How long does the licensing process take?
  
  The standard processing time is 30 working days after the submission of complete documentation. However, the entire process, including preparation, may take 3-6 months.
  
• What is the validity period of the license?
  
  Medical equipment distribution licenses in Vietnam are typically valid for 5 years and can be renewed before expiration.
  
• Can foreign companies own 100% of the distribution business?
  
  Yes, 100% foreign ownership is permitted for medical equipment distribution companies in Vietnam, subject to compliance with all regulatory requirements.

Conclusion

Obtaining a medical equipment distribution license in Vietnam requires careful planning, thorough preparation, and attention to detail. While the process may seem complex, understanding the requirements and working with experienced partners can significantly smooth the path to successful market entry.

Harley Miller Law Firm “HMLF”

Address: 14th floor, HM Town Building, 412 Nguyen Thi Minh Khai, Ward 05, District 3, Ho Chi Minh City.

Phone: +84 937215585

Website: hmlf.vn

Email: miller@hmlf.vn