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Legal Update

Official Letter on Contractor Permits for Foreign Contractors

18 June 2010
Mayer Brown JSM Legal Update

On 12 April 2010 the Ministry of Construction issued Official Letter 607/BXD-HDXD providing guidelines to the Department of Construction of Hanoi City, at the request of the latter, on the issuance of contractor permits to foreign contractors ("Letter 607").

Letter 607 states that foreign contractors operating in the construction sector in Vietnam must comply with the provisions in the Regulations on Management of Operations of Foreign Contractors in Construction Sector in Vietnam ("Regulations") issued with Decision No. 87/2004/QD-TTg dated 19 May 2004 of the Prime Minister.

A foreign contractor means a foreign organisation or individual with civil legal capacity intending to carry out a specific construction project in Vietnam. In the case of an individual, the contractor must also have capacity for civil acts in order to enter into and perform contracts. The civil legal capacity or the capacity for civil acts of a foreign contractor is determined in accordance with the law of the country of nationality of the contractor.

Foreign contractors are entitled to the rights and must perform the obligations set out in the Regulations, including the application for contractor permits, opening of operating offices and bank accounts in Vietnam.

A contractor permit means a permit issued by the competent State body of Vietnam to a foreign contractor for a contract after the foreign contractor wins a tender or is selected in accordance with Vietnamese law.

Operating office means the office of a foreign contractor registered to operate in the locality of the construction works in order to carry out the tasks of the contract work received after issuance of a contractor permit. An operating office may only operate for the duration of implementation of a contract and must be dissolved when the contract is liquidated.

Under the Regulations, foreign contractors are permitted to operate in Vietnam only after the issuance of a contractor permit by the competent State body of Vietnam.

Application file for issuance of contractor permit

  • Application for a contractor permit;
  • Copy report on tender results, decision on selection of contractor or contract legally appointing the contractor;
  • Copy licence for establishment and charter of the company (or business registration certificate of the organisation) and practising certificate issued to the contractor in the country of nationality of the contractor;
  • Report on experience of the contractor in construction activities relevant to the project and audited financial statements for the last three consecutive years (this report is required in the case where the contractor undertaking a tender package is not subject to mandatory application of Vietnamese tendering legislation);
  • Partnership contract with a Vietnamese contractor or an undertaking to engage a Vietnamese sub-contractor to perform the contractual work (stipulated in the tender or offer to act as contractor);
  • Power of attorney in the case of any person who is not the legal representative of the contractor.

A contractor who is an individual providing construction consultancy must submit one original set and two photocopy sets to the permit-issuing body, each set comprising:

  • Application for a contractor permit;
  • Copy report on tender results, decision on selection of contractor, or contract legally appointing the contractor;
  • Copy operating licence or practising certificate for construction consultancy issued to the contractor in the country of nationality of the contractor, and copy passport;
  • Professional curriculum vitae prepared by the contractor himself or herself, together with copies of contracts relating to relevant work which the contractor has performed within the last three consecutive years.

The Department of Construction of Hanoi City is requested to guide foreign contractors to comply with the provisions of Vietnamese law. These provisions must be incorporated into the terms of contracts to be executed by such foreign contractors and applicable in the case of a dispute.

For inquiries related to this Legal Update, please contact:

Dao Nguyen ( )

Thinh Dan ( )

Learn more about our Vietnam offices and Construction & Engineering practice.

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