Can limited companies participate in the bid as joint ventures in Vietnam?
Can limited companies participate in the bid as joint ventures in Vietnam? How legally and financially independent should a limited liability company be in Vietnam?
Hi, I have a problem that needs to be answered. I am currently the director of L Limited Company and my friend is the Director of M Company Ltd. Both companies deal in different products and are not competitors. Is it possible for both companies to participate in the bid as a joint venture now?
Please advise. Thankyou.
1. Can limited companies participate in the bid as joint ventures in Vietnam?
According to Clauses 1 and 3, Article 5 of the Law on Bidding 2013, eligibility of bidders/investors is as follows:
1. A bidder or investor being an organization shall be deemed to be eligible when it satisfies the following conditions:
a) Having registration for establishment and operation issued by the competent authority of country where it is operating;
b) Keeping independent accounting records;
c) Not undergoing dissolution process, are not thrown into bankruptcy, and do not incur bad debts as prescribed by law.
d) Having registered on National E-procurement System;
dd) Ensuring the competitiveness in bidding as prescribed in Article 6 hereof;
e) Not being banned from bidding;
g) Its name is stated in short list for case where the short list has been selected;
h) Being in a joint venture with domestic contractors or employment of domestic subcontractors in case of a foreign contractor making an international bidding in Vietnam, unless the domestic contractor cannot acquire the competencies necessary to perform any portion of the package.
3. Bidders and investors with eligibility as prescribed in Clause 1 and Clause 2 of this Article may make a bid as an independent bidder/investor or in a joint venture; in case of joint venture, it must have written agreement among members, in which clearly stating responsibilities of the leading JV's Party and general responsibilities, particular responsibilities of each JV’s Party.
Thus, if your company and your friend both meet the conditions of the above-mentioned law, the companies of both can participate in the bidding as a joint venture, but there must be a written agreement among members. This is one of the required documents to prove the eligibility, capacity and experience of the contractor in Vietnam.
2. How legally and financially independent should a limited liability company be in Vietnam?
In Clause 2, Article 6 of the Law on Bidding 2013, ensuring competitiveness in bidding is regulated as follows:
2. Bidders making a bid must be legally and financially independent with the following parties:
a) Investor, Procuring Entity;
b) The consulting bidders for the making, verification, and appraisal of dossiers of design and estimate; the making, verification of Bidding Documents, Request for Proposals; assessment of Bids, Proposals; appraisal of results of selecting bidder of such package;
c) Other bidders that participate in same package for limited bidding.
Therefore, when a limited liability company participates in the bidding, it is necessary to pay attention to the provisions related to legally and financially independent in Vietnam as above.
Best Regards!
