PROCEDURES FOR APPLYING FOR A CONSTRUCTION OPERATION PERMIT FOR FOREIGN CONTRACTORS

Regarding permit conditions, Article 114 of Decree No. 175/2024/NĐ-CP sets out two principal requirements for foreign contractors. First, a foreign contractor must obtain a winning bid decision or be officially selected by the investor or main/subcontractor. In other words, the permit is only granted once the contractor has participated in bidding and won a specific construction package. Second, the foreign contractor must form a partnership with a Vietnamese contractor or use a Vietnamese subcontractor, unless no domestic contractor is capable of performing that portion of work. Where a partnership or subcontracting arrangement is made, the joint venture contract (or subcontract) must clearly define the scope, volume, and value of work to be undertaken by the Vietnamese contractor. This requirement ensures cooperation, technology transfer, and mobilization of domestic resources. Only when these conditions are fully met may the foreign contractor submit an application for a Construction Operation Permit.

Administrative procedures and required dossiers are set out in Article 115 of Decree No. 175/2024/NĐ-CP. Accordingly, the foreign contractor must prepare one (01) dossier to be submitted to the licensing authority, including the following key documents:

            (i) Application for a Construction Operation Permit: Prepared using Form No. 01 (for organizational contractors) or Form No. 04 (for individual contractors) in Appendix III of Decree No. 175/2024/NĐ-CP. The application must be in Vietnamese, clearly stating information about the foreign contractor, project name, awarded work, contract duration, and a commitment to comply with Vietnamese law once licensed.

            (ii) Winning bid decision or selection document: A certified copy (or authenticated electronic copy) of the decision or legal bidding result issued by the investor or main/subcontractor. This document proves the contractor’s legal eligibility for licensing. If issued in a foreign language, it must be translated into Vietnamese and notarized/certified under Vietnamese law.

            (iii) Legal status documents of the contractor: A certified copy of the establishment license or business registration certificate issued by the competent authority in the contractor’s home country, together with practicing certificates (if any) issued by competent authorities there. All foreign documents must be consularly legalized (unless exempted under an international treaty between that country and Vietnam) and translated into Vietnamese with certification.

            (iv) Experience report and financial statements: A report on construction experience following the prescribed form (Appendix III of Decree No. 175/2024) listing similar projects/contracts executed in the last three years. This must be accompanied by audited consolidated financial statements for the last three years (if the Law on Bidding does not apply). If the enterprise is younger than three years, statements for the actual years of operation are required. These documents prove financial capacity and relevant experience.

            (v) Joint venture contract or preliminary subcontract with a Vietnamese contractor: A certified copy of the partnership contract with a Vietnamese contractor (if joint venture) or a preliminary subcontract with a Vietnamese subcontractor for the awarded work. Such documents are usually included in bidding dossiers and must be attached. The contract must specify the portion of work undertaken by the Vietnamese side as noted above.

            (vi) Power of attorney: Where the applicant is not the legal representative of the foreign contractor, a legally valid power of attorney authorizing the applicant must be provided, executed in compliance with applicable laws.

The complete dossier shall be submitted to the competent licensing authority, specifically the Department of Construction of the locality where the foreign contractor intends to set up its executive office or where the project is located (in case the project spans multiple provinces). Submission follows the one-stop-shop mechanism: dossiers may be lodged directly at the Department’s one-stop division, sent by post, or submitted online via the National Public Service Portal in accordance with Government regulations. The contractor is responsible for the accuracy and legality of all documents.

Regarding the processing time, Decree No. 175/2024/NĐ-CP stipulates that within 20 working days from the date of receipt of a complete and valid dossier, the Department of Construction must review and decide whether to grant the permit. This time limit excludes public holidays and weekends under the Law on Promulgation of Legal Documents. If the permit is refused, the Department must issue a written response stating the reasons. Upon issuance, the contractor must pay the licensing fee in accordance with the Law on Fees and Charges (Appendix to Law No. 107/2015/QH13) before collecting the permit.

The outcome of this procedure is a written decision granting a Construction Operation Permit. The permit specifies the contractor’s name and address, scope of authorized work, validity period consistent with the contract, and any attached conditions. Regarding validity, Article 117 of Decree No. 175/2024/NĐ-CP provides that the permit expires upon: (a) completion and liquidation of the construction contract; (b) termination of the contract due to suspension of operation, dissolution, bankruptcy, or other legal grounds under Vietnamese law and the law of the contractor’s home country. In other words, the permit remains valid only during the life of the contract. Afterward, the contractor must close its executive office, return and cancel its registered seal, and complete liquidation obligations in accordance with Vietnamese law.

In summary, to obtain a Construction Operation Permit, a foreign contractor must comply with the legal provisions currently in force as described above. A review of applicable law (the Law on Construction and Decree No. 175/2024/NĐ-CP) shows that the licensing process is straightforward: if the contractor satisfies conditions of bid award and partnership, prepares the full dossier, submits it to the competent Department of Construction, and waits within 20 working days, the permit will be issued. Otherwise, the licensing authority must state the refusal reasons in writing. Once granted, the permit authorizes the foreign contractor to officially perform the construction contract in Vietnam, while complying with other obligations such as establishing an executive office, registering and using a seal, paying taxes, and observing labor and foreign exchange regulations under Vietnamese law.

The information contained in this article is general and intended only to provide information on legal regulations. DB Legal will not be responsible for any use or application of this information for any business purpose. For in-depth advice on specific cases, please contact us.

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