Foreigners can take part in biddings for doing projects and other business undertakings in Vietnam. However, it is quite confused for them to do business in Vietnam because of the absence of general regulations on this matter.

Legislation

At the moment, Decree No.15/2021/ND-CP dated 3 March 2021 of the GoV, on the management of construction investment projects; as amended by Decree No. 35/2023/ND-CP dated 20 June 2023, amending a number of articles of Decrees under the State management of the Ministry of Construction (“Decree 15/2021”); Circular No.06/2021/TT-BXD dated 30 June 2021 of the Ministry of Construction (“MOC”), providing for classification of building works and guidance on application in management of construction investment activities (“Circular 06/2021/TT-BXD”); and Circular No. 103/2014/TT-BTC dated 6 August 2014 of MOF, providing guidelines for fulfilment of tax liability of foreign entities doing business in Vietnam or earning income in Vietnam (“Circular 103/2014/TT-BTC”), are the most referred legal documents. Subject to the nature of business, the contractor activities shall be subject to the specific sectorial regulations, including technology transfer, construction, etc.

Below are some regulations on foreign construction contractors and sub-contractors.

Requirements

To become a foreign construction contractor or sub-contractor in Vietnam, a foreign applicant must satisfy the following criteria:

(i) Having been granted with a license for construction activities when there is a contract award or contractor selection made by the owner, main contractor or sub-contractor; and
(ii) Setting up a partnership with a Vietnamese contractor or employing Vietnamese sub-contractors, unless the Vietnamese contractor is not qualified to execute any tasks of the bidding package. When entering into a partnership with or using a Vietnamese contractor, the contents, volume and value of the work(s) performed by the Vietnamese contractor in the partnership or Vietnamese subcontractor(s) must be clearly defined; and
(iii) Committing to fully comply with the provisions of Vietnamese law related to contracting activities in Vietnam.

Applications

For a construction license, 1 set of application files must be submitted directly or by post to the licensing agency (the DOC of the locality where the project is conducted, or the DOC of the locality where the foreign contractor plans to set up an executive office in the case where the construction investment project is located in 2 or more provinces and centrally-run cities).

Each set of application files applicable to organizations must contain the followings:

(i) Application for license made in Vietnamese according to a template;
(ii) A certified copy or an electronic copy of a report on bidding results or decision on lawful contract award;
(iii) A certified copy or an electronic copy of the Establishment license or the Business registration certificate of organizations, which has been legalized (except for the cases entitled to exemption from consular legalization as permitted by international treaties to which Vietnam and relevant countries are members) and the professional practice certificate (if any) granted by the country of which the foreign contractor bears the nationality;
(iv) A report on experiences in activities related to the contracted jobs and a certified copy or an electronic copy of the synthesis report on financial auditing for the latest three years (for the cases not subject to the application of the provisions of Vietnamese bidding legislation);
(v) A certified copy or an electronic copy of the partnership contract with a Vietnamese contractor or an official contract or an in-principle-contract with Vietnamese sub-contractor to perform the contracting (already included in the bids or bidding dossiers);
(vi) Lawful authorization letter, for persons other than the contractor’s legal representative; and
(vii) A certified copy or electronic copy of the decision approving the project or the investment decision or the investment certificate of the project/ building works.

If papers and documents specified at Points (ii), (iii), (v) and (vi) are in a foreign language, they must be translated into Vietnamese and the translations must be notarized and authenticated.

Application files for contracting licenses arising in the same year are not necessary to include the documents referred to in (iii) and (iv).

Each set of application files applicable to individuals must contain the followings:

(i) Application for license made in Vietnamese according to a template;
(ii) A certified copy or a digital file containing a colour copy of the original which is an image or other format (*.pdf) of a report on bidding results or decision on lawful contract award;
(iii) A legalized copy or a digital file containing a colour copy of the original which is an image or other format (*.pdf) and Vietnamese translation of the operation license or professional practice certificate granted by the country of which the foreign contractor bears the nationality, and a notarized/certified copy and Vietnamese translation of passport;
(iv) A digital file containing a color copy of the original, which is an image or other format (*.pdf) of the decision on investment in the project or the investment certificate or the written approval for the investment policy.

Subject to the nature and scale of the bidding projects, construction contractor license shall be issued by the provincial-level DOC, within 20 days from the full receipt of the application.

Foreign construction contractor shall pay a fee of VND2 million/license when receiving the license.

Permitted Activities

Once being licensed, foreign construction contractors have the following obligations:

(i) To set up their Executive offices at the localities where the projects are implemented after being granted with a construction operation license; to register the addresses, phone number, fax number, email address, seal, accounts and tax code of their work executive offices. Regarding contracts pertaining to formulation of construction planning, formulation of construction investment project, construction survey or building works construction design, the foreign contractor may establish an Executive office at the place where the office of the project owner is headquartered or establish no executive office in Vietnam. Regarding the contract on construction and supervision over construction of the building works that will be constructed in multiple localities, the foreign contractor may establish an Executive office in any locality where the building works will be constructed. The Executive office only exists during the contract performance period and dissolves when the contract terminates.

After registering the above-mentioned information about the Executive office, the foreign contractor shall send a written notice of such information directly or by post to the provincial-level DOC of the locality where the Executive office is set up, the specialized construction authority directly under the MOC and relevant agencies using the standard form. If any information about the executive office is modified, the foreign contractor shall so notify such agencies;

(ii) To register and cancel specimens of seals as well as to return seals of their Executive offices at the Police Offices of the provinces and centrally-run cities where building works are located when the contract is terminated in accordance with the laws. Foreign contractors shall only use these seals for affairs of contract performance in Vietnam according to the provisions of their construction operation licenses;

(iii) To register and pay taxes according to provisions of Vietnamese laws; to observe the accounting system, open accounts and make payments as guided by the MOF and the SBV for business activities under contracts;

(iv) To recruit and employ Vietnamese and foreign workers according to the Vietnamese labor legislation. To register only economic managerial and technical management experts and highly skilled workers whom Vietnam lacks for entry into Vietnam;

(v) To carry out the procedures for exporting or importing supplies, machines and equipment related to the awarded contracts in Vietnam according to the provisions of Vietnamese laws;

(vi) To perform partnership contracts already signed with Vietnamese contractors or use Vietnamese subcontractors already determined in the application for the issuance of a construction license;

(vii) To purchase insurance according to the provisions of Vietnamese laws for contractor’s works, including: insurance for professional liability of contractors providing investment and construction consultancy; insurance for assets and goods for procurement contractors; insurances of various kinds for construction contractors and other insurances according to the provisions of Vietnamese laws;

(viii) To register for inspection of the quality of supplies and equipment imported and supplied under the contracts;

(ix) To register the safety of construction equipment and means of transport related to business activities of foreign contractors according to the provisions of Vietnamese laws;

(x) To observe the regulations on norms, standards, management of quality of building works, labor safety and environmental protection as well as other relevant Vietnamese law provisions;

(xi) To implement reporting as prescribed in the construction operation license;

(xii) To directly submit or send 1 set of documents by post to the construction license granting authority for consideration of adjusting the granted construction license within 20 days if there are any changes in the name, address of the contractor, changes in members of the contractor consortium or subcontractors or other contents stated in the granted construction license; and

(xiii) Upon the completion of building works, to compile dossiers on completion of building works; provide warranty for building works; make the settlement of imported supplies and equipment; to handle unused supplies and equipment under contracts for construction of building works according to the regulations on export and import; re-export construction supplies and equipment already registered for temporary import – re-export; and to liquidate the contracts. And at the same time, to notify the relevant State management agencies of the expiry of the contracts, to terminate operation of their Executive offices.

Taxation

Taxes applicable to foreign contractors and sub-contractors in Vietnam are further described in Taxation hereunder.