What are the regulations on the payment for construction contracts in Vietnam? What currency is used for payment of construction contracts in Vietnam?
- What are the regulations on the payment for construction contracts in Vietnam?
- What are the regulations on the currency used for payment of construction contracts in Vietnam?
- How long is the payment term of construction contracts in Vietnam?
- What are the regulations on the responsibilities of parties in payment of construction contracts in Vietnam?
What are the regulations on the payment for construction contracts in Vietnam?
Pursuant to Clause 5, Article 19 of Decree No. 37/2015/ND-CP, Clause 6, Article 19 of Decree No. 37/2015/ND-CP, Clause 7 Article 19 of Decree No. 37/2015/ND-CP and Clause 8 Article 19 of Decree No. 37/2015/ND-CP stipulating on payment for specific types of construction contracts as follows:
(1) Lump sum contract:
Payment shall be made on percentage of contractual price or construction works price, work items, quantity of work in proportion to payment stages as agreed in the contract. Confirmation of completed quantity of work is not required when payment is made.
(2) Contracts of fixed unit price and adjustable unit price:
Payment shall be made on the basis of actual completed quantity (including increasing or decreasing quantity if any) inspected and accepted for each payment, and unit price in the contract or adjustable unit price as agreed in the contract.
(3) As for time-based contract, payment shall be made as follows:
- Expenses for experts’ work are determined by multiplying the expert’s pay rate and relevant expenses as agreed in the contract by actual accepted work time (on a monthly, weekly, daily and hourly basis).
- Expenses apart from the expenses for experts’ work shall be paid according to provisions of the contract.
(4) As for contracts of combined price, payment:
Shall be made according to regulations on contract payment as prescribed in (1) (2) (3).
What are the regulations on the payment for construction contracts in Vietnam? What currency is used for payment of construction contracts in Vietnam?
What are the regulations on the currency used for payment of construction contracts in Vietnam?
Pursuant to Article 21 of Decree No. 37/2015/ND-CP stipulating as follows:
Currency and payment term
1. Currency used for contract payment is Vietnam dong; use of foreign currency can be negotiated by the two parties but should not be contrary to the regulations on foreign exchange.
2. For a construction contract involving some works that require payment to be made in multiple currencies, the parties must carry out negotiations under the contract but ensure the currency for payment is in conformity with the ITB or request for proposals.
3. Payment may be made in cash, account transfer and other manners as agreed by the two parties in accordance with the law and specified in the contract.
According to the above regulations, the currency used for payment of construction contracts is regulated as follows:
- Currency used for contract payment is Vietnam dong; use of foreign currency can be negotiated by the two parties but should not be contrary to the regulations on foreign exchange.
- For a construction contract involving some works that require payment to be made in multiple currencies, the parties must carry out negotiations under the contract but ensure the currency for payment is in conformity with the ITB or request for proposals.
How long is the payment term of construction contracts in Vietnam?
Pursuant to Clause 10, Article 19 of Decree No. 37/2015/ND-CP and Clause 11, Article 19 of Decree No. 37/2015/ND-CP stipulating the payment term of construction contracts as follows:
Payment term as agreed by the two parties in the contract must be in conformity with scale and nature of each contract.
Time for payment should not prolong over 14 working days since the employer receives adequate payment documents as agreed in the contract and specifically prescribed as follows:
- Within seven working days since receipt of adequate payment request from the contractor, the employer must complete procedures and transfer payment request to the bank or State Treasuries to facilitate the payment.
- Within seven working days since receipt of adequate payment request from the contractor, the employer must complete procedures and transfer payment request to the bank or State Treasuries to facilitate the payment.
- For contracts of ODA projects, loans from foreign credit institutions, payment term is prescribed in International Agreement. When negotiating about payment term, the parties must rely on provisions of the International Agreement and investment capital payment procedures according to law provisions.
Note: The employer's failure to pay or overdue payment to the contractor as agreed in the contract shall not be accepted.
What are the regulations on the responsibilities of parties in payment of construction contracts in Vietnam?
Pursuant to Clause 2, Article 19 of Decree No. 37/2015/ND-CP, Clause 3, Article 19 of Decree No. 37/2015/ND-CP and Clause 4, Article 19 of Decree No. 37/2015/ND-CP stipulating the responsibilities of parties in construction contract payment as follows:
- The parties shall negotiate in the contract about number of payments, stage of payment, date of payment, payment term, payment documents and conditions.
- The employer must pay 100% of each payment value to the contractor after advances and maintenance expenses are subtracted according to agreement under the contract except otherwise as negotiated.
- If the two parties are not eligible to carry out the payment under the contract during the payment period (no data to adjust price, insufficient time to determine product quality...), temporary payment can be made.
- When the two parties are eligible to carry out the payment, the employer must make the payment to the contract as prescribed in Clause 3 Article 19 of Decree No. 37/2015/ND-CP.
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