New Bidding Law In Viet Nam
On 23 June 2023, The National Assembly of Vietnam officially adopted a new bidding Law No. 22/2023/QH 15, which will take effect from 01 January 2024 (“New Bidding Law”). The new Bidding Law contains 96 articles divided into 10 chapters. The New Bidding Law have a number of changes to the Current Bidding Law to address certain issues in the bidding process for selecting investors for projects
Table of contents:
- Two circumstances where bidding is required to select investors for investment projects:
- New Forms of Bidding:
- Five circumstances that the international investors can not be applied:
- The list of key provisions of the project contract:
- New requirements of contract performance security
- New conditions for project transfers:
- In Summarise:
- Call Us:
Two circumstances where bidding is required to select investors for investment projects:
Circumstance 1: Projects using land for which bidding is required under the land law and regulations.
Circumstance 2: Projects for which bidding for selection of investors is required under the relevant specialized laws and regulations.
New Forms of Bidding:
According to Articles 4.10 and 4.11 of the new Bidding Law, two forms of bidding are domestic and international. While domestic bidding involves domestic bidders, international bidding allows the participation of international investors.
Five circumstances that the international investors can not be applied:
- 1. Projects in the sector in which foreign investors’ market approach is restricted under the Vietnamese investment regulations;
- 2. Projects for which domestic bidding is required due to national defense, national security, social order, and safety requirements;
- 3. Projects that will be implemented in land or sea areas where the use by foreign-invested enterprises is limited under land Laws and relevant regulations;
- 4. Projects that have a total investment capital of less than VND 800 billion;
- 5. Projects that do not fall within the four circumstances above and have been publicized and invited for expressions of interest for international bidding, but no foreign investor has participated.
The list of key provisions of the project contract:
- - Information about the contracting parties, the effective day, and the contract term;
- - Information about the project, including purposes; address; implementation schedule; scale and investment capital; conditions for use of land and other resources (if any); plan and requirements with respect to compensation, support, resettlement, and construction of auxiliary works (if any); safety and environmental protection; force majeure events and the plans to deal with force majeure events;
- - Responsibilities to conduct procedures on compensation, support, resettlement, and construction of auxiliary works (if any); land allocation or lease (if any)
- - The Winning Investor's responsibility to meet commitments proposed in the bid; the establishment of a project company to manage the project implementation (if any)
- - Contract performance security; principles and conditions for contract amendments and termination; the transfer of contracting parties' rights and obligations;
- - Governing law and dispute resolution methods.
New requirements of contract performance security
- - The Winning Investor must provide contract performance security before or at the effective date of the Project Contract in one of the following forms:
- - A guarantee letter from a domestic credit institution or a foreign bank's branch that is established pursuant to Vietnamese law;
- - A guarantee insurance certificate issued by a domestic non-life insurer or a foreign non-life insurer's branch that is established pursuant to Vietnamese law.
New conditions for project transfers:
If transferring the awarded project to a third party must satisfy the conditions as follows:
- - The transfer must be approved by the relevant state authority;
- - The transferee must satisfy the requirements related to technical and financial capacities to implement the project;
- - The transferee must commit to assuming all rights and obligations of the Winning Investors under the Project Contract.
The new Bidding Law will come into effect on 1 January 2024 with a number of changes in the bidding process to select investors for the implementation of projects. The investors should study and prepare for the upcoming implementing regulations.
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