Operation License for Constructions in Vietnam Instead of Contractor’s Permits for Foreign Contractor

The foreign contractors are only permitted to carry out construction activities in Vietnam so long as being granted operation license for constructions in Vietnam by Ministry of Construction as per the Construction Law.

When the investors need to apply for operation license for constructions in Vietnam?

EPC Contractors have increasingly been interested to learn the requirements of licenses and permits to operate in Vietnam. It is advised that the construction law firms in Vietnam with lawyers specializing in construction area to assist the foreign contractors to understand the legal frameworks, and requirements of foreign contractors before and after taking on construction projects in Vietnam after bidding result.

As investment in construction activities has been growingly rapidly, in order to meet the tender conditions and take part in construction activities in Vietnam, foreign contractors shall follow the regulations in Vietnam and obtain proper license during the preparation and the execution of the construction of the project.

Prior to construction operation license, foreign constructors have experienced another form of permit named contractor’s permits for foreign contractors in Vietnam. These are two concepts however the process of registration and document requirements are not so different.

There has been an effort to harmonize and reduce differences and conflicts arisen in many fields of laws regulating the mentioned subject and the new provisions of the Law on Bidding, Construction Law and the Investment Law which establish a stable legal framework for the implementation of foreign contractor’s bidding and construction activities in Vietnam. 

Why the investors need to apply for operation license for constructions in Vietnam?

This change to operation license for constructions in Vietnam instead of contractor’s permits for foreign contractor in Vietnam does not differentiate which position the foreign contractors are appointed from the lead contractor, the main contractor, contractor to subcontractor consortium.

Unlike domestic contractors, foreign contractors must be granted operation license in constructions in Vietnam for each awarded contract.  The amendment from the contractor’s permits for foreign contractor contribute to the unity of the same concept in different legal instruments regulating the license procedure of foreign contractors operating within the territory of Vietnam, and limit the unnecessary overlaps, difficulties to law interpretation and application of legal entities.

We shouldn’t forget to mention that the amendment of the foreign contractor’s operation license for constructions in Vietnam is to increase the relevance between the name and nature of the licensed activities of foreign contractors in construction operation.

One of the initial conditions to a foreign contractor to be licensed is when the contractor has won a bid or been selected to be sub-contractor of an investment project. Therefore, the terms construction operation license shall demonstrate the role of the contractor in the construction projects they have been participated in.

The operation license for constructions in Vietnam for foreign contractor is expected to be easier to relate to when foreign contractor take part in construction project in Vietnam.  This would attract more foreign contractors to undertake construction projects in Vietnam to bring in the technology equipment, as well as the management skills to Vietnam.

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest protection, risk mitigation and regulatory compliance. ANT Lawyers has lawyers in Ho Chi Minh city, Hanoi, and Danang, and will help customers in doing business in Vietnam.