PROCEDURES FOR ISSUANCE OF FOREIGN CONTRACTOR LICENSE

A foreign contractor is only permitted to operate in construction activities in Vietnam after being issued foreign contractor license (construction operation license) by the State management authority in construction. This license is not only a mandatory legal procedure for State management but also serves as proof of the contractor’s professional capability, experience, and legal compliance.

Who qualifies as a foreign contractor?

Under current Vietnamese law, a foreign contractor participating in a construction investment project is defined as a foreign organization or individual with legal civil capacity; in the case of individuals, they must also possess civil conduct capacity to enter into and perform contracts. The civil legal capacity and civil conduct capacity of the foreign contractor are determined in accordance with the law of the contractor’s nationality.

A foreign contractor may be a general contractor, main contractor, joint contractor, or subcontractor.

However, unlike domestic contractors, foreign contractors must be issued foreign contractor license for each contract after winning the bid.

What conditions must be met to obtain a foreign contractor permit?

Pursuant to Article 103 of Decree 15/2021/ND-CP, a foreign contractor may be issued a construction operation permit when the following conditions are met, where the foreign contractor:

– has a decision to win the bid or be selected by the investor/main (sub) contractor.

– must form a joint venture with a Vietnamese contractor or use a Vietnamese subcontractor, except in cases where the domestic contractor is not qualified to participate in any work of the bid package. When forming a joint venture or using a Vietnamese contractor, the content, volume and value of the work performed by the Vietnamese contractor in the joint venture and the Vietnamese subcontractor must be clearly defined.

– must commit to fully comply with the provisions of Vietnamese law related to contracting activities in Vietnam.

How is the procedure for issuing licenses to foreign contractors regulated?

Step 1: To prepare and submit the application for a foreign contractor license.

The dossiers include:

– Application for a construction operation license;

– Bidding results or the decision to select a legal contractor;

– Establishment license or business registration certificate for the organization and the practice certificate (if any) issued by the country where the foreign contractor is a national;

– Report on operating experience related to the contracted work and consolidated financial audit report for the last 3 years (in case of non-compliance with the provisions of the law on bidding);

– Joint venture contract with a Vietnamese contractor or the official contract or the principle contract with a Vietnamese subcontractor to perform the contracted work (included in the bidding documents or bidding documents);

– Legal authorization letter for a person who is not the legal representative of the contractor;

– Project approval decision or investment decision or investment certificate of the project/construction.

Step 2: The competent authority receives and processes the application.

The authority for processing is as follows: The Department of Construction issues construction activity licenses for foreign contractors undertaking construction investments within the administrative area of the province. In cases where the construction investment project spans two or more provinces, the competent authority is the Department of Construction of the locality where the foreign contractor intends to set up its operational office.

The processing time for the procedure is 20 working days from the date of receiving a complete application as per regulations.

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