[Q&A] #014 - Expanding Your Pharmaceutical Business into Vietnam

Expanding your pharmaceutical business into Vietnam presents exciting opportunities, but it also requires careful planning and understanding of the local market. To help you navigate this process, we’ve outlined the primary options for establishing a business presence in Vietnam and the support we can provide to connect you with potential partners. Below are answers to common questions regarding business setup and trade promotion in Vietnam.

[Q&A] #014 - Expanding Your Pharmaceutical Business into Vietnam

Question: Our company is a foreign pharmaceutical firm looking to expand our business into Vietnam. What are our options?

Answer: By way of introduction, this is Legal Head from Van Pham LLC. Understanding you are interested in expanding your business in Vietnam and perhaps it should be the pharmaceutical field, we wish to highlight relevant issues below: 

• You can open an affiliated company in Vietnam to wholesale (not retail) pharmaceutical products, or 

• You can establish a representative office of your company in Vietnam for the promotional activities or setting relationship with your partners 

Basically, the difference between these two types of business expansion is that a company can directly operate business, while RO is NOT allowed to do so. This means that RO cannot engage in profit-making transactions and cannot provide service because RO is a dependent unit of the parent company. This is also the main factor for most foreign investors to choose between company and RO.

Additionally, below is a comparison of other elements between Company and RO for your reference: 

Elements	Company	RO
Capital	Investors shall inject capital to company within 90 days from the establishment date NO minimum capital is required	No capital injection is needed since RO will use the money provided from parent company
Time operation	50 years and can extend	Maximum 5 years and can extend
Compliance	Subject to tax obligations and other compliance reports	Fewer compliance procedures
Requirements for parent company	n/a	Parent company shall have a minimum operational history of one year from the date of their establishment or registration
Setting up time	1-2 months	1-1.5 month
Open bank accounts	Can open bank accounts for transactions	Can open bank accounts to receive funds from parent company but the fund can be used for RO's operation only (for eg: to pay monthly rental fee, electricity, internet bill, etc.)

Question: How can your company assist us in finding and connecting with potential partners in Vietnam?

Answer: We will compile a database of pharmaceutical companies and pharmacy stores operating in Vietnam, estimated to include over a thousand potential partners. We will reach out to these contacts on your behalf. While we anticipate generating 3-4 leads from this campaign, actual results may vary based on factors such as your company's reputation, profile, and product lines. Additionally, we will promote your company through our social media channels to maximize visibility.

Choosing the right approach for establishing your business in Vietnam will depend on your specific goals and operational needs. Whether you decide to set up an affiliated company or a representative office, our team is here to assist you every step of the way. By leveraging our network and expertise, we aim to facilitate valuable connections and help you achieve your expansion objectives. If you have any further questions or need additional information, please don’t hesitate to reach out.