Normally, foreign organizations wishing for project performance in Vietnam often choose to do so in a number of ways, such as participating as a contractor, establishing a new economic organization or following a contract. In particular, the method of participating as a contractor is currently becoming the mainstream choice as an increasingly number of tender projects has been implemented in Vietnam. For the above reason, this article concentrates on providing information related to the issuance of Foreign Contractors’ License – one of the key conditions for foreign contractors to be allowed to carry out construction projects in the nation[1].
Conditions for granting Foreign Contractors’ License
Regarding the conditions for granting a Construction Practice Certificate, the foreign contractor is obliged to satisfy 03 requirements under Article 103 of Decree No.15/2021/NĐ-CP:
- the receipt of the Certificate is permitted only after the case of which the employer or main contractor (or subcontractor) issues the decision on winning/being selected for the tender;
- the formation of a joint venture with or the usage of the Vietnamese contractors are also required (unless the Vietnamese contractor is not qualified to participate in any work of the tender package); and
- the commitment to comply with Vietnamese law on tendering activities.
Competent authorities reserving the right to issue Foreign Contractors’ License
Pursuant to clause 3 Article 104 of Decree No.15/2021/NĐ-CP, the specialized agencies in construction under the Ministry of Construction and the Departments of Construction are those having the authority to issue Foreign Contractors’ License to foreign contractors.
In particular, the former shall grant the Certificate to foreign contractors for their contractual performance in important national projects, group A projects, or construction investment projects located in the territory of two provinces or more; meanwhile, the latter shall issue the Certificate to foreign contractors contractually serving projects in group B and group C, which were invested and constructed within the administrative boundaries of the province.
Granting procedure of Foreign Contractors’ License
Step 1: Prepare for the application
First and foremost, the foreign contractor is required to prepare a dossier of application for a Construction Practice Certificate, including documents regulated under clause 1 Article 104 Decree No.15/2021/NĐ-CP. From such application, the business establishment certificate or business registration certificate of foreign entity is in need of the consular legalization, unless an international treaty to which Vietnam or the relevant countries is a contracting party provides consular legalization exemption.
Furthermore, in case some documents from the aforesaid dossier use foreign languages, such documents shall be translated into Vietnamese (the translation shall be notarized and authenticated in a lawful manner)[2].
Step 2: Send the application to the issuing authorities directly or via postal service
After the preparation, the foreign contractor shall send the application to the competent authorites for consideration. Within 20 days from the day on which the dossier is received in full, the aforesaid authorities shall issue a Foreign Contractors’ License to the foreign contractor. After the receipt of such Certificate, the foreign contractor shall pay the fee to the issuing authorities. Accordingly, the fee rate for granting a Foreign Contractors’ License shall be 2,000,000 VND/Certificate[3].
[1] Decree No.15/2021/ND-CP dated March 3rd, 2021 of the Government detailing a number of provisions on management of construction investment projects.
[2] Clause 1 Article 104 Decree No.15/2021/NĐ-CP.
[3] Clause 2 Article 4 Circular No.172/2016/TT-BTC dated October 27th, 2016 on amounts, collection, and payment of fees for issuance of the Foreign Contractors’ License.