Issue construction licenses to foreign contractors in Vietnam

The construction license for foreign contractors in Vietnam  is one of the mandatory conditions for foreign contractors operating in the field of construction in Vietnam. Therefore, the need to learn about bidding license services for foreign contractors is absolutely necessary to avoid wasting time and effort.The content of the article  below of Viet An Law will provide you with information on this topic.

Legal basis

• Law on Construction 2014, amended and supplemented in 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.

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.

Conditions for foreign contractors to be granted construction license in Vietnam

• Foreign contractors shall be granted construction licenses when there is a winning decision 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 construction licenses for foreign contractors 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.

Agencies receiving dossiers of application for construction licenses for foreign contractors

• The Department of Construction shall grant construction activity licenses 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 grant it as the Department of Construction of the locality where the foreign contractor plans to set up its executive office

Procedures for applying for a construction activity license for a foreign contractor in Vietnam

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

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

• Directly at state agencies;
• 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 granted a construction activity license

• After being granted 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 Department of Construction where the project is located on the contract performance.

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