When can foreign contractors conduct construction activities in Vietnam? What are the conditions for granting Construction Operation Licenses to foreign contractors? What are the rights and obligations of foreign contractors when carrying out construction activities in Vietnam?

When Are Foreign Contractors Allowed to Conduct Construction Activities in Vietnam?

Pursuant to Article 113 of Decree No. 175/2024/ND-CP, the regulations are as follows:

Article 113. Principles for Managing the Operations of Foreign Contractors

1. Foreign contractors may only conduct construction activities in Vietnam after being granted a Construction Operation License by the competent state construction management authority.

2. The activities of foreign contractors in Vietnam must comply with Vietnamese laws and relevant international treaties to which Vietnam is a signatory or member.

Accordingly, foreign contractors are only permitted to conduct construction activities in Vietnam after obtaining a Construction Operation License issued by the competent state construction management authority.

What Are the Conditions for Granting a Construction Operation License to Foreign Contractors?

According to Article 114 of Decree No. 175/2024/ND-CP, the conditions for granting a Construction Operation License to foreign contractors are as follows:

• A foreign contractor shall be granted a Construction Operation License when it has a lawful decision on winning a bid or being selected as a contractor by the project owner or the main contractor/subcontractor.
• A foreign contractor must enter into a joint venture with a Vietnamese contractor or use a Vietnamese subcontractor, except in cases where Vietnamese contractors do not have sufficient capacity to perform any part of the bidding package. In cases of joint ventures or engagement of Vietnamese contractors, the parties must clearly determine the scope of work, workload, and value of the portion of work performed by the Vietnamese contractor in the joint venture or by the Vietnamese subcontractor.

Rights and Obligations of Foreign Contractors When Conducting Construction Activities in Vietnam

Pursuant to Article 119 of Decree No. 175/2024/ND-CP, foreign contractors conducting construction activities in Vietnam shall have the following rights and obligations:

Rights of Foreign Contractors

Foreign contractors shall have the following rights:

• To request competent authorities to provide guidance on preparing dossiers for the issuance of Construction Operation Licenses and other matters related to the contractor’s activities in accordance with Decree No. 175/2024/ND-CP;
• To file complaints or denunciations against violations committed by organizations or individuals carrying out activities regulated under Decree No. 175/2024/ND-CP;
• To have their lawful business interests in Vietnam protected in accordance with the granted Construction Operation License.

Obligations of Foreign Contractors

Foreign contractors shall have the following obligations:

• To establish an executive office at the project location after being granted a Construction Operation License; and register the address, telephone number, fax number, email address, seal, bank account, and tax identification number of the executive office.

For contracts involving construction planning, preparation of construction investment projects, construction surveys, or construction design, foreign contractors may establish an executive office at the registered head office of the project owner or may choose not to establish an executive office in Vietnam.

For contracts involving construction execution or construction supervision of projects extending across multiple provinces, foreign contractors shall establish an executive office in the locality where the construction permit was issued.

The executive office shall only exist during the contract performance period and shall be dissolved upon expiration of the contract.

• To register, cancel the seal specimen, and return the seal upon completion of the contract in accordance with legal regulations. Foreign contractors may only use such seal for activities serving the performance of the contract in Vietnam as specified in the Construction Operation License;
• To register and pay taxes in accordance with Vietnamese laws; comply with accounting regulations; open accounts and conduct payments in accordance with the guidance of the Ministry of Finance and the State Bank of Vietnam to serve business activities under the contract;
• To recruit employees and employ Vietnamese workers and foreign workers in accordance with Vietnamese labor regulations. Foreign contractors may only register for bringing into Vietnam economic management experts, technical management experts, and highly skilled workers whose expertise cannot be adequately provided by Vietnam;
• To carry out procedures for the export and import of materials, machinery, and equipment related to construction contracts in Vietnam in accordance with Vietnamese laws;
• To perform the joint venture contract signed with Vietnamese contractors or use Vietnamese subcontractors identified in the application dossier for the Construction Operation License;
• To purchase insurance in accordance with Vietnamese laws for the contractor’s activities, including professional liability insurance for construction investment consulting contractors, property and goods insurance for procurement contractors, insurance applicable to construction contractors, and other insurance regimes required by Vietnamese law;
• To carry out quality inspection and registration procedures for imported materials and equipment supplied under construction contracts;
• To carry out safety inspection and registration procedures for construction equipment and transportation vehicles related to the business activities of foreign contractors in accordance with Vietnamese laws;
• To comply with regulations on technical regulations, standards, construction quality management, occupational safety, environmental protection, and other relevant provisions of Vietnamese law;
• Upon completion of the project, foreign contractors must prepare construction completion documents; assume responsibility for warranty obligations; finalize imported materials and equipment; handle remaining materials and equipment under construction contracts in accordance with import-export regulations; re-export registered construction materials and equipment under the temporary import-re-export regime; liquidate the contract; and notify relevant state management authorities of the contract completion and termination of the operation of the project executive office according to Form No. 09 of Appendix III issued together with Decree No. 175/2024/ND-CP.

During the implementation of construction projects in Vietnam, foreign contractors are required to fully satisfy legal conditions and obtain a Construction Operation License before carrying out construction activities in accordance with applicable regulations. However, the licensing procedure often requires various documents and materials relating to the contractor’s capacity, project implementation, construction contracts, and compliance with Vietnamese laws. A lack of experience in preparing application dossiers may result in prolonged processing times or unexpected legal risks.

With a team of experienced lawyers and legal professionals specializing in investment, construction, and corporate law, Khanh An Business Law Limited Company provides professional, comprehensive, and effective services for obtaining Construction Operation Licenses for foreign contractors in Vietnam. We support clients throughout the entire process, including consulting on licensing conditions, reviewing the legality of application dossiers, preparing and completing necessary documents, representing clients in working with competent state authorities, and assisting until the Construction Operation License is successfully obtained.

With in-depth knowledge of Vietnamese legal regulations and extensive experience supporting both domestic and foreign enterprises, Khanh An Business Law is committed to providing appropriate legal solutions that help contractors save time, minimize risks, and quickly implement construction projects in Vietnam in a smooth and legally compliant manner.

Khanh An’s Core Values

We always pursue three core values: REPUTATION – QUALITY – HIGH EFFICIENCY. These values are not only the guiding principles in our operations but also the motivation for our continuous growth and development. We are proud to receive positive feedback from our clients, which confirms the quality and effectiveness of the legal services we provide.

Khanh An will continue making every effort to deliver the best legal services and accompany our clients in their sustainable development journey.

Contact Information

KHANH AN BUSINESS LAW LLC

Hotline: (+84) 24 6688 5821 / (+84) 976 529 499

Address: 88 To Vinh Dien, Khuong Dinh, Hanoi, Vietnam

Website: khanhanlaw.com

Email: info@khanhanlaw.net