Foreign Investment Restrictions and Business Conditions for Day-Care Services in Vietnam
Table of Contents
17. Industry Category 20. Healthcare No. 1
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1. Classification of the Business
Business: Day-Care Services
Day-care services, as commonly understood in Japan, are not widely established in Vietnam. There is no comprehensive business license category for "day-care services" as such; rather, the applicable business classification differs depending on the content of the services provided. Typical examples are as follows.
Content of Day-Care Services
Applicable Business/Investment Sector
Transportation of elderly persons (e.g., transport to and from day-care centers)
Passenger transportation business
Passenger transportation business
Assistance with bathing, toileting, and meals
Basic functional training
Health maintenance
Improvement of quality of life
Elderly care assistance services business
2. Foreign Investment Restrictions on the Passenger Transportation Business in Vietnam
Business: Land Passenger Transportation Services
Official Business Name under Vietnamese Law
CPC Code
VSIC Code
Land passenger transportation services
7121
7122
4931
4932
WTO Commitments
Vietnam–Japan Treaty
Domestic Law
Under the WTO commitments, passenger transportation services may be provided through a business cooperation contract or a joint venture, provided that the foreign party's ownership ratio does not exceed 49%.
In other words, to provide land passenger transportation services, a foreign investor must satisfy the following two conditions.
Form of entry: business cooperation contract (BCC) or joint venture
Ownership ratio: not exceeding 49%
All drivers must be Vietnamese nationals
■ Comment
As noted above, land passenger transportation services cannot be entered into with 100% foreign ownership.
Accordingly, it is necessary to consider either excluding the transportation of elderly persons (transport to and from day-care centers, etc.) from the scope of the day-care business, or partnering with a licensed local Vietnamese passenger transportation company and having passengers/clients contract directly with that transportation provider to be transported to the day-care center.
3. Elderly Care Assistance Services Business
Business: Elderly Care Assistance Services Business
Official Business Name under Vietnamese Law
CPC Code
VSIC Code
Other human health care assistance services
(elderly health care assistance services)
9319
8730
WTO Commitments
Vietnam–Japan Treaty
Under the WTO commitments, Vietnam has not committed to opening the elderly care assistance services business to foreign-invested enterprises. In other words, there is no guarantee that a foreign investor may invest in this business; approval is granted, if at all, on a case-by-case basis through individual applications.
AFAS (ASEAN Framework Agreement on Services): Vietnam has opened CPC 93191 (a sub-category of CPC 9319, covering maternity and related services, nursing care services, physical therapy, and nursing services) to foreign-invested enterprises, and this may be conducted with 100% foreign ownership on a stand-alone basis. Other sub-categories under CPC 9319 cannot be conducted on a stand-alone basis and require a joint venture with a Vietnamese local partner, with foreign ownership not exceeding 70%.
CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership): CPC 93191 (a sub-category of CPC 9319, covering maternity and related services, nursing care services, physical therapy, and nursing services) has been opened 100% to foreign-invested enterprises. In other words, foreign investors from CPTPP member countries, including Japan, may conduct CPC 93191 business in Vietnam with 100% foreign ownership on a stand-alone basis.
Since Japan is a member of the CPTPP, by giving priority to the application of the CPTPP, your company may be understood to be able to provide care services in Vietnam (including elderly health care assistance services). However, there is a practical issue in that the business registration authorities are accustomed to the provisions of the WTO commitments but not to those of AFAS or the CPTPP. Consequently, businesses that are not liberalized under the WTO commitments but are liberalized under the CPTPP cannot easily be registered as such. At a minimum, the authorities must be shown the existence and content of the CPTPP provisions in order to secure their understanding and acceptance. Although this is difficult, registration is considered possible.
Domestic Law
Law on the Elderly (2009), Decree No. 06/2011/ND-CP, Decree No. 103/2017/ND-CP
Because this falls within a conditional business sector, the following conditions must be satisfied.
■ Required Conditions
No.
Condition
Details
1
Form of establishment
May be established as an association, or as a legal entity (either a general corporate entity or a social enterprise entity).
2
Conditions applicable to the facility's representative
The facility's representative must have full civil act capacity.
The representative must possess good moral character, must not be suffering from social vices, must not be subject to criminal prosecution, and must not have an unexpunged criminal conviction.
3
Environment and location
The facility must be located in an environment that is convenient for access to transportation, schools, and hospitals, and that is beneficial to the health of residents.
The facility must have access to electricity and clean water necessary for daily living.
4
Facilities
The facility must ensure the following minimum physical conditions.
a. Land area (or floor area, in the case of a building): an average of 30 sqm per resident in rural areas, and 10 sqm per resident in urban areas.
b. The average living area per resident must be at least 6 sqm. Living rooms must be furnished with the equipment necessary for residents' daily activities.
c. The facility must have a residential area, a kitchen area, a work area for staff and employees, recreational facilities, water supply and drainage, electricity, and internal roads.
d. The facilities and equipment must be designed to be accessible and easy for elderly residents to use.
5
Personnel
a. Staff must be assigned to provide direct advice and assistance to residents.
b. Employees must satisfy the following conditions.
Be in good enough health to be able to assist residents.
Have full civil act capacity.
Possess good moral character, not be suffering from social vices, not be subject to criminal prosecution, and not have an unexpunged criminal conviction.
Possess the capacity to provide care.
c. The number of employees must be sufficient relative to the scale of residents.