Vietnam: A Growing Economy with a Huge Future. Vietnam Healthcare Investment Opportunities
Wei Li, John P. Wilson
I. Demographic Dividends Accelerate Economic Growth
Located in Southeast Asia, Vietnam is young and full of opportunities.
The slim country has a population of more than 97 million  and ranks third among the Association of Southeast Asian Nations (ASEAN) members, behind Indonesia and the Philippines. It is estimated that by 2030, the population of Vietnam will be close to 120 million [1,2].
Vietnam's population is an expanding pyramid structure  and, with the working age (15 to 64 years old) accounting for 70% of the total population , it is one of the countries with the highest proportion of working age people in Southeast Asia.
The demographic dividend has injected unprecedented vitality into the Vietnamese economy and made Vietnam one of the fastest growing economies in Southeast Asia. By 2050, Vietnam will be one of the world's 20 largest economies .
In 2018, Vietnam's GDP growth rate was as high as 7.08%, the highest of the past decade . In line with economic growth, Vietnam's personal disposable income will also rise .
The labour cost in Vietnam is low with an average monthly wage of $216 for production workers, less than half that of workers in China .
II. Tremendous Healthcare Market
1. The middle class is on the rise
As incomes increase, an emerging class -- the middle class, is rapidly rising. At present, the middle class accounts for 13% of Vietnam's population, but is expected to double by 2026, reaching 26% .
The rise of the middle class has raised the demand for high-quality healthcare services.
According to Vietnam's Ministry of Health (MOH), about 40,000 Vietnamese spend about $2 billion a year abroad , especially in Singapore, Thailand, Malaysia and the United States, enjoying high-quality healthcare services abroad in quality medical facilities staffed by experienced medical professionals. Treatments in oncology and heart disease treatment are especially popular .
The rapidly expanding middle class could be the market with the greatest demand for high-value nutritional products . 48% of Vietnamese want to have a healthy life ranking health as their greatest wish .
2. The population is rapidly aging
In addition, the Vietnamese population is rapidly ageing.
At present, the proportion of elderly people aged 65 and over in Vietnam is 6% . It is expected that by 2030, this proportion will rise to 12.4% , reaching nearly 19 million . By 2050, this proportion will be close to 26% .
Even if the average age of Vietnamese is high (73 years old), the burden of non-communicable diseases is growing. In Vietnam, an average elderly person has three diseases and suffers 15.3 years of sickness in their life .
The aging population faces a high risk of chronic diseases, requires more regular monitoring , and needs more accessible and affordable healthcare services, but the current health system in Vietnam cannot currently support these growing needs.
3. Healthcare spending is growing
According to Business Monitor International (BMI), Vietnam's health spending will increase from $17.2 billion in 2018 to $22.7 billion in 2021 .
Vietnam’s public health spending accounted for 56.9% in 2018 and is expected to grow to 58.1% by 2021 . It is reported that the expenditure on public healthcare in Vietnam has exceeded the expenditure on private healthcare since 2012 .
III. Healthcare Reform Improves Service Quality
In response to the growing demand for healthcare services, the Vietnamese government has undertaken clear healthcare reforms , including the Direction of Healthcare Activities (DOHA).
The government's healthcare reform aims to solve the problems of severe overcrowding in hospitals, uneven distribution of healthcare resources and imbalance in the utilization of healthcare services, and improve the quality of healthcare services.
At present, Vietnam administers its healthcare system in a four-level structure: central (Level I), provincial (Level II), district (Level III), and commune (Level IV) levels .
The government is reforming the structure of healthcare organizations at all levels, from central to local, in order to improve the effectiveness of national health management . By upgrading the quality of primary healthcare services in local hospitals, the long-term overcrowding  and burden of medical facilities  in central hospitals can be alleviated.
By October 2018, Vietnam had 1,336 hospitals, of which 80%  were public. The occupancy rate of central hospital beds in Hanoi and Ho Chi Minh City, two economic centers in Vietnam, is as high as 120-160% .
2. 1816 Plan
The "1816 Plan" (Satellite Hospital Project), which the Vietnamese government is practicing, allows more Vietnamese to enjoy quality healthcare in their hometowns.
By the end of 2017, the central hospitals had sent about 4,000 healthcare professionals to provide training for healthcare staff in local hospitals, providing the procedures and equipment needed for more treatment options .
At the same time, approximately 4,800 technologies were transferred and 2.5 million patients were treated locally .
3. Universal Health Insurance
The Vietnamese government implements a universal health insurance plan.
According to Vietnam's Ministry of Health, about 99.5% of the 48,547 healthcare establishments have linked their data to the Vietnams Social Insurance Agency .
By 2025, universal health insurance coverage will reach 95%, and direct health care costs per household will be 35% lower than current costs .
4. Family Doctor Model
The Vietnamese government continues to promote the family doctor model throughout the country. The model has been implemented since 1999 and, as of 2018, 8 educational institutions in Vietnam have provided family doctor training .
The family doctor model will provide basic and comprehensive healthcare services for individuals, families and communities, helping to improve the quality of primary care and alleviating patient overload in large infirmaries.
It is expected that by 2020, the model will cover at least 80% of cities and provinces .
5. Privatization of Public Hospitals
Vietnam tried to privatize public hospitals.
In September 2015, the Vietnam Central Transportation Hospital in Hanoi sold more than 51.43% of its shares to the T&T Group (a real estate developer) for $7.4 million, marking the first privatization of a public hospital in Vietnam. The hospital was originally owned by the Ministry of Transport of Vietnam .
6. State-owned enterprises are "Equalized"
The Vietnamese Ministry of Finance plans to lift restrictions on foreign ownership of listed companies, including healthcare .
It is estimated that by 2020, the current foreign ownership limit of 49% of most local companies will be largely eliminated .
This initiative will accelerate foreign investment, accelerate the process of state-owned enterprise reform, and encourage the market to develop in a faster, stronger and more sustainable manner.
7. Public-Private Partnership (PPP)
The Vietnamese government is working hard to promote the Public-Private Partnership (PPP) programs to better share costs.
In December 2014, Vietnam enacted Resolution No. 93NQ-CP to promote cooperation between public and private healthcare providers . Private investments are attracted to invest in infrastructure construction and management, medical equipment and training .
The PPP program not only raises much-needed funds, but also supports capacity building for quality healthcare  , helping to achieve a catalytic role in achieving United Nations Sustainable Development Goal 3: to ensure healthy lives and promote well-being for all at all ages .
8. Cooperation between the government and international famous enterprises
Abbott entered the Vietnamese market more than 20 years ago. Abbott works with the Maternal and Child Health Department of the MOH to promote maternal nutrition and quality nutrition in hospitals. Over the past 30 years, the child malnutrition in Vietnam has been significantly reduced from 51% to 14%, but the rate of child stunting due to maternal malnutrition during pregnancy and lactation is still high .
Abbott also works with the MOH's National Institute for Food Control to improve food safety . Vietnamese consumers are experiencing an unprecedented number of food safety incidents. On average, there are currently 167.8 food poisoning cases per year .
In accordance with the Vietnamese Government’s National Strategy for the Prevention and Control of Non-Communicable Diseases (2015–2025), AstraZeneca collaborated with the MOH's Medical Services Administration (MSA) on a Healthy Lung Program aimed at improving the quality of outpatient management of asthma and chronic obstructive pulmonary disease (COPD) in Vietnam .
IV. International Cooperation Accelerates the Healthy Development of Healthcare
1. China's "One Belt, One Road" Initiative
Connected with the world's largest market – China – by mountains and rivers, Vietnam is a friendly neighbour with the same system and similar culture.
After China's President Xi Jinping proposed to build the "One Belt, One Road" Initiative in 2013, accelerating the landing of the Initiative in Vietnam has become a win-win move for both China and Vietnam's economic development.
During the visit of the General Secretary of the Communist Party of Vietnam Nguyen Phu Trong in January 2017, China and Vietnam signed "the Memorandum of Understanding on Cooperation in the Special Assistance for Public Health in Vietnam". With the help of China, the healthcare system in northern Vietnam is being steadily developed .
From May 11 to 15, 2017, Vietnamese President Tran Dai Quang was the first of the 29 heads of state and government to arrive in Beijing to attend the first "Belt and Road" Forum for International Cooperation, and to pay a state visit to China.
On November 10 - 13, 2017, Chinese President Xi Jinping made his first oversea visit to Vietnam after the 19th National Congress of the Communist Party of China. The two governments signed "The Memorandum of Understanding on the Belt and Road Initiative" and Vietnam's "Two Corridors and One Economic Circle" plan.
The five major goals of the "Belt and Road" cooperation are to promote: policy coordination, facilities connectivity, unimpeded trade, financial integration and people-to-people bonds. The two sides should adhere to the principle of discussion, co-construction and sharing.
Vietnam and China are comprehensive strategic partners that mutually benefit each other, and the two countries continue to become more central in each other's production chains. The Vietnam's and China's complementarity economic structure, geographical proximity and convenient transportation are among the factors that contribute to the economic, trade and investment cooperation between Vietnam and China.
In 2018, the bilateral import and export of Vietnam-China economic and trade cooperation reached $150 billion . For many years, China has been Vietnam's largest trading partner. For three consecutive years, Vietnam has become China's largest trading partner in ASEAN and the eighth largest trading partner in the world .
As a bridge between the ASEAN Economic Community and China, Vietnam has given full plays to the advantages of the ASEAN-China Free Trade Area and actively promoted the comprehensive development of ASEAN-China economic and trade relations . In 2018, China ranked 7th among 129 countries and regions that invested in Vietnam, and Chinese state-owned and private enterprises are stepping up their investment in Vietnam .
The exchanges and interactions between the two countries span thousands of years, and the fate and future of the two countries are closely linked. In 2018, civil exchanges between Vietnam and China reached 12 million people. Among the tourists from ASEAN countries who visit China, the highest number comes from Vietnam.
2. The Association of Southeast Asian Nations (ASEAN)
Vietnam is one of the 10 member states of ASEAN. Other members include Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore and Thailand. Together, these countries account for nearly 9% of the world’s population . By 2030, ASEAN will become the world's fourth largest economy, with economic growth exceeding the global average .
By 2025, healthcare spending in ASEAN member countries Vietnam, Indonesia, Malaysia, the Philippines, Singapore and Thailand will reach $740 billion . Given current healthcare expenditure levels, about $320 billion in growth is immediately needed to sustain the future of the healthcare industry . This growth, in addition to being linked to an ageing population, is also associated with high smoking rates, lack of exercise, unhealthy diets and obesity .
Vietnam's active cooperation with ASEAN countries is conducive to accelerating technology transfer, human resource development, economies of scale and increasing financing leverage. Vietnam remains committed to achieving the UN health goals of sustainable development .
In 2015, ASEAN countries signed the ASEAN Common Submission Dossier Template (CSDT) and the ASEAN Common Technical Dossier (ACTD) to unify medical device regulations and pharmaceuticals registration guidelines.
CSDT allows medical device manufacturers to submit product registration documents to any ASEAN member state regulatory authority to reduce the time and cost of obtaining approval for medical devices in 10 ASEAN countries .
The CSDT medical devices are divided into four categories based on risk level. Class A is low risk, Class B is low-moderate risk, Class C is moderate-high risk, and Class D is high risk .
ACTD uses a common format to simplify the process of pharmaceutical product registration and reduce the time and resources required to process registration applications. The ACTD consists of four main sections: covering the required registration application documents and product information, quality control documents, non-clinical documents and clinical documents.
The ACTD archival material also identifies the following categories of drugs: New Chemical Entities (NCE), Biotechnology Products (Biotechnology), Major Variant Products (MaV), Minor Variety Products (MiV), and Generic Drugs (G) .
3. The Asia-Economic and Sustainable Economy (APEC)
According to research by the Asia-Economic and Sustainable Economy (APEC), APEC economies are expected to suffer significant GDP losses of up to 8.5% per by 2030 due to poor health and early retirement from disability.
Issues affecting the quality of healthcare services in APEC economies and the growing challenges facing the population include: safety of the blood supply, antibiotic resistance, tuberculosis, population aging, cervical cancer, diabetes, kidney failure, mental health and other forms of chronic diseases .
From November 6 – 11, 2017, the annual APEC meeting was held in Da Nang, Vietnam. At the 25th APEC Economic Leaders Meeting, APEC adopted the Declaration on "Creating New Dynamism, Fostering a Shared Future", encouraging APEC economies to invest in healthcare sytems to increase productivity and economic growth .
Maternal and child health was the subject of frequent discussions at the 2017 APEC meeting . To improve maternal and child health, the MOH of Vietnam and the APEC Health Initiative (including its food safety, maternal health and clinical nutrition programs) are being supported by Abbott, a global healthcare company .
4. The Regional Comprehensive Economic Partnership (RCEP)
The Regional Comprehensive Economic Partnership (RCEP) is a free trade agreement involving 10 ASEAN member States and 6 dialogue partners, including China, Japan, South Korea, India, Australia and New Zealand.
On November 14, 2018, Vietnamese Prime Minister Nguyen Xuan Phuc said at the RCEP Leaders Meeting that a cooperation framework for trade and investment was needed to promote common prosperity in the region .
Vietnam is ready to work with other countries to find innovative and flexible solutions to achieve common goals and promote RCEP as a comprehensive, high-quality and balanced framework to bridge the development gap between its members .
Once the negotiations among its members are successful, RCEP will cover 3.4 billion people, accounting for about half of the world's population. RCEP will thus become the world's largest trading bloc and, with a GDP of $49.5 trillion , will account for 1/3 of the world's gross domestic product .
5. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)
On January 14, 2019, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) entered into force in Vietnam. The agreement will create a free economic market and boasts a market size of about 500 million people and a total GDP of more than $13.5 trillion, accounting for 13% of global GDP.
The CPTPP will boost Vietnam's GDP by 1.1% over its expected value in 2030 , spurring a $1.7 billion increase in GDP and an increase of more than $4 billion in exports by 2035 to 1.32% and 4.04% , respectively..
Like other members of the CPTPP economy, Vietnam is committed to opening up markets, investment and a zero tax rate on commodities. The agreement will provide greater certainty for healthcare providers, including CPTPP countries, to enter the Vietnamese market and operations .
6. The EU-Vietnam Free Trade Agreement (EVFTA)
The EU-Vietnam Free Trade Agreement (EVFTA), which Vietnam is actively promoting, will enter into force in early 2019. The agreement would exempt almost all Vietnamese from tariffs on products exported to the European Union (EU).
By then, Vietnam will have access to the EU's $500 billion government procurement market to obtain quality goods and services, particularly in the healthcare and life sciences sectors; the size of this market is 67% of the total value of the government procurement market.
Vietnam has pledged to give EU suppliers the right to bid for up to 50% of the purchases of pharmaceuticals in Vietnam's MOH, and many of the hospitals as well as in major research facilities it controls, but this will be a gradual process over 15 years after the agreement takes effect .
According to the Ministry of Planning and Investment of Vietnam, as of 2017 the EU was the fifth largest foreign investor in Vietnam, with nearly 2,500 projects valued at about $44 billion and the total trade in goods between the EU and Vietnam at about $54 billion .
V. Multilateral Meetings Strengthen Healthcare Cooperation
1. The 26th Asia-Pacific Parliamentary Forum (APPF-26)
In January 2018, Vietnam hosted the 26th Asia-Pacific Parliamentary Forum (APPF-26) to enhance friendly cooperation among many countries, strong economic and trade growth, and more rapid and effective development of healthcare cooperation . APPF-26 was the practical action of the 2017 APEC Declaration in Vietnam.
This is the second time that Vietnam has hosted the APPF annual meeting. In January 2005, it held the 13th session in Ha Long Bay, the northern coast of Quang Ninh Province .
2. The Greater Mekong Subregion (GMS)
In March 2018, Vietnam actively participated in the trade and investment cooperation activities of the Greater Mekong Subregion (GMS).
As of the end of December 2017, approximately $162 million has been invested in Vietnam's healthcare and social welfare GMS partnership projects, equivalent to nearly 1% of total GMS loans and financial aid .
In August 2018, Vietnam strengthened health cooperation in the GMS, helping to strengthen cross-border infectious disease control including SARS, avian influenza, AIDS, tuberculosis, dengue fever and malaria [51, 52].
3. The World Economic Forum on ASEAN 2018 (WEF-ASEAN 2018)
In September 2018, Vietnam hosted the World Economic Forum on ASEAN 2018 (WEF-ASEAN 2018).
The Asia-Pacific Leaders Malaria Alliance collaborates with the Asian Development Bank and the Global Fund to Fight AIDS, Tuberculosis and Malaria so that Vietnam can better address malaria relapse and multidrug-resistant in parasites. To this end, the Alliance launched a new regional health fund to finance the Vietnam Malaria Fund through the Global Fund procurement process .
The summit actively explored the harmonization of regulatory procedures in ASEAN countries in order to speed up the delivery of essential medicines to patients and reduce state administrative costs.
In addition, the summit also recommended accelerating the pace of digital health, early diagnosis and effective treatment of chronic diseases, and artificial intelligence analysis of medical big data  and more, which have far-reaching effects on healthcare systems in Asia and the world at large .
4. The China International Import Expo (CIIE)
On November 4, 2018 at the invitation of the Chinese government, Vietnamese Prime Minister Nguyen Xuan Phuc led a high-level Vietnamese government delegation and entrepreneurs to attend the first China International Import Expo (CIIE) in Shanghai as a guest of honour, and also met with the Chinese President Xi Jinping.
Prime Minister Nguyen Xuan Phuc said the expo is an important opportunity for Vietnam to promote the country's image, strengthen trade, investment and tourism promotion activities, and that Vietnamese companies will have the opportunity to trade and expand cooperation with entrepreneurs and investors from all over the world.
5. The Boao Forum for Asia (BFA)
In December 2018, the Boao Forum for Asia (BFA) held the China-Vietnam Economic Cooperation Promotion Forum in Hanoi, Vietnam. Countries such as Vietnam and China have attached great importance to future economic and trade cooperation.
The BFA is willing to help Vietnam and China accelerate the development of strategic synergies and strengthen interconnection, and economic and trade cooperation within the framework of Vietnam's "Two Corridors and One Circle" and China's "One Belt, One Road" Initiative .
VI. Exciting Investment Opportunities
1. Private hospitals
Private hospitals have taken root in Vietnam by improving healthcare service standards, implementing differentiated strategies, controlling costs, and conducting scientific research rationally .
In 2014, Hoan My Medical Corporation became the first hospital in Vietnam to receive foreign investment .
In December 2017, GE Healthcare and VIRMEC Health System signed a comprehensive strategic cooperation agreement in Hanoi to establish an international hospital, which will bring world-class healthcare services to Vietnam and raise the standard of healthcare in Vietnam .
At present, private hospitals in Vietnam account for 20% of the total number of hospitals in Vietnam , including Hanh Phuc International Hospital , Vinmec Hospital Group , FV Hospital , Hoan My Hospital Group , Columbia Asia Hospital Group , City International Hospital , Becamex International Hospital , Family Medical Practice Vietnam , Hanoi French Hospital .
Although private hospitals are a fast-growing investment opportunity in emerging markets, they still cannot keep up with the healthcare needs of the Vietnamese public. According to the Vietnamese MOH, by 2020, Vietnam needs 59 oncology medical institutions, 76 cardiology medical institutions and 74 orthopaedic medical institutions. The number of beds per medical institution is 80 - 150 .
2. Medical devices
Vietnam's medical device market has benefited from equipment upgrades in Vietnamese hospitals.
Vietnam's medical device market was estimated at $914 million in 2017, and is expected to reach $1.09 billion in 2019.
Vietnam's healthcare authorities and hospitals have growing demand and funding for imaging diagnostic equipment, cancer treatment, surgical equipment, operating room equipment, intensive care unit equipment, orthopaedics, emergency equipment, disinfection equipment, surveillance equipment and test kits.
More and more Vietnamese hospitals use a profit-sharing model to upgrade or lease expensive medical equipment .
The Vietnamese Government encourages the import of medical equipment because local production does not meet the demand. Imported medical equipment import duties are low, and there is no quota limit.
About 90% of Vietnam's medical equipment is imported, about 30% of which is imaging diagnostics, including MRI, CT scanners, ultrasound equipment and X-ray equipment .
At present, the main foreign suppliers of medical devices in Vietnam come from the United States, Japan, Germany, South Korea and China . Together, these countries account for 71% of total medical equipment imports . However, international awareness and interest in local production within Vietnam is rising. Medtronic, for example, invested in a facility to make camera capsules in Ho Chi Minh City to record images of the digestive system .
There are currently about 50 local companies in Vietnam that produce about 600 products approved by the MOH. These product lines include hospital beds, scalpels, cabinets, scissors and consumables . They generally offer limited or no warranty or after-sales service, especially in remote areas.
According to the Vietnamese MOH's Decree No. 36/2016/ND-CP on medical device management , only companies registered in Vietnam and holding legal entities with import licenses  and Marketing Authorization (MA) licenses  are eligible to distribute medical equipment.
To meet this requirement, foreign suppliers often sell through local distributors or agents to more quickly enter established marketing networks and gain a deeper understanding of relevant regulations.
The Vietnamese pharmaceutical market will achieve double-digit growth in the future (2018-2022).
Imports of pharmaceuticals, including patented and generic drugs, will grow at a rate of 16% per year, reaching around 55% of total pharmaceuticals .
Vietnam's pharmaceutical market in 2017 was worth $5.2 billion, and the value of imported drugs was $2.863 billion . It is expected that by 2020, the value of the Vietnamese pharmaceutical market will grow to approximately $6.6 billion .
Currently, about 800 foreign companies are allowed to provide pharmaceuticals in Vietnam but direct distribution of medicines is not allowed. Major foreign drug suppliers (including food supplements) come from France, India, Germany, South Korea, Italy, the United States, the United Kingdom and Switzerland .
This is a national strategy for the development of the pharmaceutical industry in Vietnam, and Vietnam plans to build a domestic pharmaceutical industry to gradually replace imported drugs. By 2020, Vietnam's goal is to supply 80% of the pharmaceuticals market with domestic products .
In addition, Vietnam's Decree No. 54/ND-CP will promote the establishment of a domestic pharmaceutical distribution and supply system in Vietnam . This decree will result in uncertainty for foreign-invested companies engaged in distribution- related activities .
4. Healthcare training and education
Vietnam's demand for the quantity and quality of healthcare personnel continues to grow.
According to Vietnam's plan to develop a healthcare network, by 2025, per 10,000 people there should be 30 beds, at least 10 doctors and 25 nurses .
By 2020, Vietnam needs 99,351 doctors, 225,345 nurses and 20,755 pharmacists according to the Vietnamese MOH .
Vietnam has a strong demand for professionals in cancer, heart disease, imaging diagnosis, injury treatment, intensive care, gastroenterology and poison control .
The shortage of doctors in Vietnam is an opportunity for private investors to attract overseas doctors to work in hospitals.
The healthcare staff trained in Vietnam have joined the non-healthcare fields or have moved to multinational companies for healthcare work due to high salary and other reasons, resulting in a shortage of healthcare personnel .
In addition, medical students need 8 to 10 years of training to become a formal doctor, so local doctors cannot alleviate the shortage of doctors in a short period of time .
Vietnam is one of the countries with low entry barriers for foreign doctors, and the Vietnamese PPP agreement allows doctors to work in public and private medical institutions. Hospitals in Vietnam are more willing to hire overseas doctors, albeit at a higher cost .
5. Private healthcare insurance
Private healthcare insurance is a major factor in the rapid growth of private healthcare spending in Vietnam.
As the scope of employee insurance increases, private healthcare spending is expected to grow at a compound annual growth rate of 7.5% from 2016 to 2021 .
The international private health insurance business, which covers global hospital resources, more convenient customer service and direct billing networks of local insurers , will be competitive.
6. Healthcare IT
Health IT will provide more opportunities and great potential for IT hardware and electronic health record software vendors. Because surgery, training, and education can all be done online on the information network.
As part of the 1816 Program, the $81 million telemedicine program provides remote diagnosis and treatment of patients through telecommunications technology .
7. Early diagnosis
Early diagnosis and effective treatment of chronic diseases is worth investing.
Prevention and early diagnosis programs have proven to be very effective for diseases such as diabetes and high blood pressure, and can prevent higher treatment and care costs at a later stage .
According to the World Health Organization (WHO), there are as many as 96 million people with diabetes in Southeast Asia, and 90% of them are type II diabetes patients, which can be prevented in advance .
Early diagnosis and effective treatment in local communities rather than in expensive hospitals may be the way forward.
VII. Investing in Vietnam for Win-win Cooperation
1. Investment in the global market via Vietnam
Foreign investors can enter the Vietnam market full of opportunities and have access to other big markets around the world.
Vietnam has established free trade relations with nearly 60 countries and regions through 16 Free Trade Agreements (FTAs). In particular, two new generation agreements, the Trans-Pacific Partnership Comprehensive and Progressive Agreement (CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA). These trading partners account for 61% of global GDP and 68% of global trade .
2. Soaring foreign investment
Foreign direct investment soared 9.1% in 2018, making it one of the fastest growing economies of capital inflow to Southeast Asia for six consecutive years .
Among the 59 provinces and cities that have received foreign investment, Hanoi, the capital city, has attracted the largest foreign-invested investment totalling $7.5 billion, accounting for 21.2% of foreign investment. This was followed by Ho Chi Minh City, the southern economic center at $5.9 billion (17%) and Hai Phong, the northern port city at $3.1 billion (8.7%) [77, 80].
In 2018, foreign investors invested in 18 industry sectors in Vietnam . Among them, the largest proportion of foreign investment was manufacturing and processing (accounting for 46.7%), followed by real estate (18.6%) and wholesale and retail (10.3%) [79, 80].
Vietnam needs foreign investment to develop or expand medical facilities, train healthcare professionals, implement IT solutions and manage medical facilities .
3. Improving the investment environment
Vietnam plans to increase the contribution of foreign direct investment to 20-25% of total economic investment, and expects to increase its contribution to GDP growth in the coming period .
However, foreign investors look forward to the stability of the legal framework and enforcement efforts to reduce the difficulties of enterprises. The appeal of Vietnam depends on the future policies of the government and law enforcement agencies .
In order to better attract and utilize foreign direct investment, the Vietnamese government is improving the investment environment in accordance with market standards and international rules .
The government is streamlining legal institutions and policies, encouraging and supporting joint ventures, cooperation and technology transfer, developing skilled human resources, and reducing energy consumption of enterprises funded by foreign direct investment .
4. Opening up secondary market
In addition, the Vietnamese government's proposed a new Securities Act that would allow foreign investors to hold 100% of the shares of listed companies (except for restricted industries such as banking and telecommunications), making it easier for foreign investors to operate in Vietnam .
By the end of July 2018, there were about 1,500 listed companies in Vietnam, of which about 740 were listed on two major stock exchanges in Hanoi and Ho Chi Minh City. More than 780 listed companies are listed in the second-tier market or are still not listed.
By the end of September 2018, foreign investors had 23.33% of Vietnamese stocks, and the value of foreign investors' portfolios reached $34.2 billion .
In the first 11 months of 2018, foreign investors estimated that they spent $7.64 billion to acquire shares of Vietnamese companies, up 44.4% from a year earlier .
5. Win-win cooperation
Foreign investors can directly invest in hospitals, medical devices, pharmaceuticals, healthcare training and education in Vietnam by establishing 100% foreign-invested enterprises (FIEs) or joint ventures (JVs) .
Foreign investors can choose to set up a company to directly invest and expand their business in Vietnam.
However, foreign investors need to obtain a representative office license, a branch office license or a foreign investment project license under the revised "Foreign Investment Law" .
Certainly, foreign investors can also indirectly invest and expand their business by looking for local partners in Vietnam, such as agents, distributors or manufacturers. But they must ensure they have the necessary permits, facilities, manpower and funding.
6. Connection building
The establishment of relationships between foreign investors and Vietnam is critical to the success of business investment.
However, Vietnam is not an investment market for the timid investors.
Foreign investors should have a thorough understanding of Vietnam's market dynamics and should not adapt the experience of investing in other countries applies. There are differences in consumer behaviour and preferences between the North and South markets in Vietnam. The south is the industrial center, and the north is the concentration of government departments and regulatory agencies.
In addition, foreign investors need to have a mentality, that is, long-term investment in Vietnam. Because investment requires a lot of time, money and energy to conduct market research, establish relationships with the government, identify market access channels and marketing strategies, find partners, and cultivate local management and service personnel and more.
Foreign investment will bring international advanced technology and high quality human resources to Vietnam, and will thus stimulate the reform of Vietnam's healthcare industry. At the same time, it will also get lucrative returns on investment and achieve win-win cooperation.
1816 Plan Satellite Hospital Project
ACTD ASEAN Common Technical Dossier
APEC The Asia-Economic and Sustainable Economy
APPF-26 The 26th Asia-Pacific Parliamentary Forum
ASEAN The Association of Southeast Asian Nations
BFA The Boao Forum for Asia
BMI Business Monitor International
CIIE The China International Import Expo
COPD Chronic Obstructive Pulmonary Disease
CPTPP The Comprehensive and Progressive Agreement for Trans-Pacific Partnership
CSDT Common Submission Dossier Template
DOHA Direction of Healthcare Activities
EU The European Union
EVFTA The EU-Vietnam Free Trade Agreement
FIEs Foreign-Invested Enterprises
FTAs Free Trade Agreements
G Generic Drugs
GMS The Greater Mekong Subregion
JVs Joint Ventures
MA Marketing Authorization
MaV Major Variant Products
MiV Minor Variety Products
MOH Ministry of Health
MSA Medical Services Authority
NCE New Chemical Entities
OECD The Organisation for Economic Co-operation and Development
PPP Public-Private Partnership
RCEP The Regional Comprehensive Economic Partnership
WEF-ASEAN 2018 The World Economic Forum on ASEAN 2018
WHO The World Health Organization