Issue construction license to foreign contractor in Vietnam

With the new provisions of the Law on Bidding, the Law on Construction, the Law on Investment and related legal documents, foreign contractors have created conditions for foreign contractors to bid and implement bidding projects in Vietnam. Foreign contractors can be general contractors, prime contractors, consortium contractors or subcontractors.

However, unlike domestic contractors, foreign contractors must be issued construction activity permits under each contract after winning bid. Procedures to issue construction activity license for foreign contractors shall be carried out as follows:

Legal basis

• Law on Construction 2014;
• Amended Law on 2020;
• Decree 15/2021/ND-CP guiding a number of contents on management of construction investment projects;
• Decree 35/2023/ND-CP amending Decrees in the field of state management of the Ministry of Construction;
• Circular 02/2019/TT-BXD providing detailed guidance on periodic reporting regime; amend, supplement and replace a number of articles of the Circular related to the periodic reporting regime under state management of the Ministry of Construction.

According to regulations, foreign contractors carrying out construction activities must issue construction activity permits. According to the provisions of the Law on Construction, “Construction activities” include: formulation of construction planning, formulation of construction investment projects, construction survey, construction design, construction construction, construction supervision, project management, selection of contractors, acceptance, handover and putting the works into operation,  warranty and maintenance of construction works and other activities related to the construction of works.

Conditions for foreign contractors to be issued construction license in Vietnam

• Foreign contractors shall be issued construction license when there is a winning bid or selection of bidding by the investor/main contractor (sub).
• The foreign contractor must cooperate with the Vietnamese contractor or use a Vietnamese subcontractor, unless the domestic contractor is incompetent to participate in any work of the bidding package. When consortium or using a Vietnamese contractor, it is necessary to clearly define the content, volume and value of the work by the Vietnamese contractor in the consortium; Vietnamese subcontractors perform.
• Foreign contractors must commit to fully comply with the provisions of Vietnamese law related to bidding activities in Vietnam.

Dossiers of application for foreign contractors construction license in Vietnam

• An application for a construction activity permit according to the form in Appendix III of Decree 15/2021/ND-CP.
• Certified or electronic copy of the bidding results or lawful bidding selection decision;
• A certified or electronic copy of the establishment license or business registration certificate for the organization and the practice certificate (if any) of the country where the foreign contractor is national;
• A schedule of reports on operational experience related to the work of receiving bidding and certified copies or electronic copies of the general financial audit report for the last 03 years (in case of failure to comply with the provisions of the law on bidding);
• Certified or electronic copy of the codeshare contract with the Vietnamese contractor or the official contract or principle contract with the Vietnamese subcontractor to perform the work received for bidding (already included in the bid dossier or bidding dossier);
• A legal power of attorney for a person who is not the contractor’s legal representative;
• Certified or electronic copy of the project approval decision or investment decision or investment certificate of the project/work.

Note when preparing documents for applying for a foreign contractor’s license in Vietnam

• The application must be made in Vietnamese;
• Foreign establishment licenses or business registration certificates must be consular legalized, unless international treaties to which Vietnam and relevant countries are contracting parties provide for consular legalization immunity.
• Other papers and documents, if in a foreign language, must be translated into Vietnamese and the translation must be notarized and certified in accordance with the provisions of Vietnamese law.
• In principle, the foreign contractor must cooperate with the Vietnamese contractor or use a Vietnamese subcontractor, unless the domestic contractor is incompetent to participate in any work of the bidding package. When consortium or using a Vietnamese contractor, it is necessary to clearly define the content, volume and value of the work by the Vietnamese contractor in the consortium; performed by Vietnamese subcontractors; In case the foreign contractor is not a joint venture or uses a Vietnamese subcontractor, the reason should be clearly explained.

Agency receives dossiers of application for foreign contractors construction license

• The Construction Department shall issue construction license to foreign contractors making construction investment in the administrative area of the province.
• In case the investment project is built in the area of 02 provinces or more, the competent agency shall issue it as the Construction Departmentof the locality where the foreign contractor plans to set up its executive office

Procedures for applying for a foreign contractor construction license in Vietnam

The foreign contractor shall submit 01 dossier to the agency issuing the construction license according to its competence.

Application form: Contractors can choose to submit documents through one of the following forms:

• Directly at state agency;
• Through the postal service;
• Web portal of the licensing authority (if any);

The licensing authority shall consider the dossier for issuance of a construction activity permit to a foreign contractor within 20 days from the date of receipt of complete dossiers as prescribed. In case of refusal, the competent authority issuing the construction activity permit must reply in writing to the contractor clearly stating the reason.

Pay attention after the foreign contractor is issued a construction license

• After being issued a construction license, the foreign contractor must register the information of the Executive Office and the contract performance representative;
• Foreign contractors must register the use of the seal of the construction management office at the Public Security Agency under the competence of the Construction Permit Issuing Agency. Foreign contractors only use this seal in service of contract performance in Vietnam as prescribed in the bidding license. At the end of the contract, the foreign contractor must return the seal to the issuing authority;
• Foreign contractors must register and pay taxes in accordance with the provisions of Vietnamese law, implement accounting regimes, open accounts and make payments under the guidance of the Ministry of Finance and the State Bank of Vietnam to serve business activities under the contract;
• Foreign contractors must recruit and employ Vietnamese and foreign workers in accordance with the provisions of Vietnamese law on labor; only allow registration of economic managers, technical managers and highly skilled persons into Vietnam that Vietnam cannot afford;
• In addition, foreign contractors need to comply with other obligations as prescribed in Article 107 of Decree 15/2021/ND-CP.
• Regulations on reporting: No later than December 16 yearly, the foreign contractor shall report to the construction permit issuing agency and the
  Construction Department where the project is located on the contract performance.

Some questions of foreign contractors

Who are foreign contractors?

Foreign contractor means a foreign organization or individual with civil legal capacity; For individuals, they must also have civil act capacity to sign and perform contracts. The civil legal capacity and civil act capacity of the foreign contractor shall be determined according to the laws of the country of which the contractor has nationality.

Which foreign contractors are the contractors in the project in Vietnam?

Foreign contractors can be general contractors, main contractors, consortium contractors, subcontractors.

What are the procedures for issuance of construction permits to foreign contractors to carry out construction activities?

Foreign contractors engaged in construction activities in Vietnam include the following activities: formulation of construction planning, formulation of construction investment projects, construction survey, construction design, construction construction, construction supervision, management of construction investment projects, selection of contractors in construction activities,  acceptance and handover to put the project into use; warranty and maintenance of construction works; providing materials – technological equipment together with technical services related to construction works and other activities related to construction works.

Services of applying for construction licenses for foreign contractors

• Advising on conditions for being issued a license for construction of foreign contractors in Vietnam;
• Advising on procedures for applying for a license for construction of foreign contractors in Vietnam;
• Advising clients to prepare dossiers in accordance with Vietnamese law related to the issuance of licenses for construction of foreign contractors in Vietnam;
• Translating, notarizing and consular translation of documents serving the issuance of licenses for construction of foreign contractors in Vietnam;
• Completing documents for customers to be issued licenses for construction of foreign contractors in Vietnam;
• Carrying out procedures for applying for licenses for construction of foreign contractors in Vietnam at competent state agencies;
• Registration and application for the seal of the Works Management Office of the foreign contractor;
• Consulting, drafting codeshare contracts between foreign contractors and Vietnamese contractors.

Foreign contractors wishing to seek opportunities in Vietnam or wishing to carry out procedures for applying for a foreign contractors construction license, please contact Viet An Law Firm for advice and support legal services to operate quickly,  safety and legally.