Medical Equipment in Vietnam: Market Entry and Distribution

Vietnam imports nearly all the medical equipment and devices used domestically. As such, foreign firms interested in the Vietnamese market must understand the rules and regulations governing the import, sale, and distribution of medical equipment in that market.

Although laws have been loosened to allow any firm — foreign or Vietnamese — with a business license to import and export goods, Vietnamese law prohibits foreign firms from distributing imported goods, including medical equipment. Foreign firms thus must find a reputable distributor to represent it in the Vietnamese market. Historically, only State-owned trading firms were allowed to participate in this business. Consequently, State-owned companies have strong relationships with purchasers (especially in the government) and are often well established in the marketplace. However, “upstart” private distributors also have their advantages. For a foreign firm, it is often easier to work with a more flexible, more market-oriented private company.

Import tariffs on medical equipment range between 0 and 5 percent. Imports are also subject to a value added tax (VAT). The VAT on medical equipment is 5 percent. With regard to government purchases, procurements valued at over 100 million VND (US$6,900) are subject to a competitive bidding process. By law, procurement agreements are written in Vietnamese currency; thus, foreign firms must cover their foreign exchange risk or face potential fluctuations in the market.