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Issuing construction permits for foreign contractors in Vietnam

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Vietnam is in the process of international integration and opening up its economy. Therefore, foreign traders can participate in bidding to implement projects in Vietnam. However, unlike domestic contractors, after winning the bid, the foreign contractor must be granted a construction license. So, what is the procedure for granting a construction license to a foreign contractor? So, let’s find out more about this issue with Lawyer X.

Law on Construction 2014 (amended in 2020);

Decree 15/2021/ND-CP.

Consulting content

Conditions for granting construction permits to foreign contractors

Foreign contractors are granted construction operation permits; when the following conditions are fully met:

Firstly, be eligible to participate in the bidding; have won the bid, and have had the investor’s decision to win the bid or be selected as a contractor. Having full capacity conditions suitable for the job receiving the contract; executing construction works by the law on construction.

Secondly, the foreign contractor must form a joint venture with a Vietnamese contractor or use a Vietnamese sub-contractor. Except for cases where domestic contractors are not qualified to participate in any work of the bidding package. When entering into a joint venture or using a Vietnamese contractor, the contents and volume must be clearly defined; and the value of the work done by the Vietnamese contractor in the joint venture; Vietnamese subcontractors perform.

Thirdly, foreign contractors must commit to fully comply with the provisions of Vietnamese law related to contracting activities in Vietnam.

Procedures for granting construction permits to foreign contractors

Prepare profile

Profile includes:

An application form for a construction license in Vietnamese (made according to the form).

Then, a certified copy or an electronic copy of the bidding results; or decide to choose a legal contractor. If it is in a foreign language, then it must be translated into Vietnamese; and notarized and authenticated.

Similarly, a certified copy or an electronic copy of the establishment license; or a Certificate of business registration for organizations. And the practice certificate (if any) of the country where the foreign contractor holds the nationality. If it is in a foreign language, it must be translated into Vietnamese; and notarized and authenticated. The establishment license or business registration certificate must be consular legalized. Except for international treaties to which Vietnam and related countries are members, there are provisions on the exemption from consular legalization.

The report of operational experience related to the bid acceptance; A certified copy. Or an electronic copy of the financial audit summary report for the last 3 years (in case of failure to comply with the provisions of the Law on Bidding 2013);

Moreover, a certified copy or an electronic copy of the partnership contract with the Vietnamese contractor; a formal contract; or a contract in principle with a Vietnamese sub-contractor to perform the bidding. If it is in a foreign language, it must translate into Vietnamese; and notarized and authenticated.

A legal power of attorney for a person who is not the contractor’s legal representative. If it is in a foreign language, then it must translate into Vietnamese, and notarized and authenticated.

Finally, a certified copy or an electronic copy of the project approval decision; or investment decision or investment certificate of the project/work.

Authority to issue construction permits

The specialized construction agency under the Ministry of Construction shall grant construction operation permits to foreign contractors; perform contracts for important national projects, group A projects, and construction investment projects in two or more provinces.

Besides, the department of Construction issues construction permits to foreign contractors; contract performance of projects of group B and group C invested and built in the administrative division of the province.

Licensing procedure

The foreign contractor shall submit 1 set of dossiers to the construction license-issuing agency according to its competence.

Bidders may choose to submit their documents through one of the following methods:

– Directly at state agencies.

– Via postal service.

– The portal of the licensing agency (if any).

Within 05 working days, the application-receiving agency will consider and request additional information; correct if records are missing or inappropriate; and provide written instructions.

Similarly, within 20 working days from the date of receiving the valid application, the licensing agency will consider; and grant construction permits to foreign contractors or refuse to grant them and clearly state the reasons therefor.

Related article:

Bidding conditions of contractors in Vietnam

Issuing construction permits for foreign contractors

Frequently asked questions

What is a foreign contractor?

According to regulations, foreign contractors are organizations established under foreign laws; or individuals with foreign nationality participating in bidding in Vietnam

Are foreign contractors subject to tax in Vietnam?

Foreign business organizations with permanent establishments or without permanent establishments in Vietnam; business foreign individuals who are residents or non-residents in Vietnam (foreign contractors and sub-contractors) doing business in Vietnam; or earn income in Vietnam based on contracts or agreements; Moreover, commitments between foreign contractors and Vietnamese organizations and individuals; or between a foreign contractor and a foreign sub-contractor; to perform a part of the work of the Contractor’s Contract, shall be subject to contractor tax

What taxes do foreign contractors have to pay?

Foreign contractors and sub-contractors being a business organization must pay VAT and CIT.
Besides, foreign contractors and sub-contractors that are business individuals must pay VAT and PIT.

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