If we agree to enter into a lease with them, do we need to supplement to our current business line with development of a building for Clinic or Hospital operation?
Question:
Our company has been granted an Investment Certificate operating in the field of real estate business with its objective is to develop a building for lease of office. The building is completed and ready for operation. Recently, we receive an offer for lease from a foreign company who intend to rent a part of the building (three floors) for investing and operating a foreign invested Clinic or Hospital. If we agree to enter into a lease with them, do we need to supplement to our current business line with development of a building for Clinic or Hospital operation?
Answer:
According to the guidance of the Ministry of Health on procedures for setting up a medical examination and treatment establishment (Clinic or Hospital), in order to set up a Clinic or Hospital, the investor must obtain approval on the location of the Clinic or Hospital from the provincial People’s Committee where the Clinic or Hospital is located.
Moreover, under the Law on Investment, in order to set up a clinic or hospital, the foreign investor shall have to apply for the Investment Certificate from the provincial People’s Committee where the Clinic or Hospital is established. In the application dossier for the Investment Certificate, the foreign investor shall have to explain about the location of Clinic or Hospital and obtain the approval on location of Clinic or Hospital from the provincial People’s Committee.
Therefore, your tenant shall have to obtain the approval of the provincial People’s Committee where your company’s building is located.
Notwithstanding, there is no any regulation clearly regulating that your company shall have to supplement the above mentioned business line to your current Investment Certificate. But from our practical experience, once provincial People’s Committee where the building is located accepts the establishment of the Clinic or Hospital and has no comment on your company’s business line, your company shall not need to amend the business line. In this case, the provincial People’s Committee that shall issue the Investment Certificate for the Clinic or Hospital project is also the authority who issued the Investment Certificate for your company’s project and substantially, the transaction between your company and your tenant shall be the lease of building areas which shall be considered as the lease of office.
