When shall the construction operating license of the foreign contractor in Vietnam be invalid? What are rights and obligations of the foreign contractor in Vietnam?

When shall the construction operating license of the foreign contractor in Vietnam be invalid?

Pursuant to Article 105 of the Decree 15/2021/ND-CP stipulating time limit and fees for issuance of the construction operating license:

Time limit and fees for issuance of the construction operating license

1. The construction authority prescribed in Clause 3 Article 104 of this Decree shall verify the application for issuance of construction operating license to the foreign contractor within 20 (twenty) days, from the date on which the sufficient application prescribed in Article 104 of this Decree is received. If the application is rejected, the issuing agency must provide explanation in writing for the contractor.

2. When receiving the construction operating license, the foreign contractor must pay fees as prescribed by the Ministry of Finance.

3. The construction operating license shall be invalid in following cases:

a) The contract is completed and finalized;

b) The contract is invalid due to the suspension, dissolution, bankrupt of the foreign contractor or other reasons as prescribed in Vietnamese law and the legislation of the country which the foreign contractors hold nationality.

As regulated above, the construction operating license shall be invalid in following cases:

- The contract is completed and finalized;

- The contract is invalid due to the suspension, dissolution, bankrupt of the foreign contractor or other reasons as prescribed in Vietnamese law and the legislation of the country which the foreign contractors hold nationality.

When shall the construction operating license of the foreign contractor in Vietnam be invalid? What are rights and obligations of the foreign contractor in Vietnam? - image from internet

What are rights of the foreign contractor in Vietnam?

Pursuant to Clause 1 Article 107 of the Decree 15/2021/ND-CP, the foreign contractor has rights to:

- Request competent authorities to provide guidelines for preparing application for issuance of the construction operating license and other issues concerning the contractor as prescribed in this Decree;

- File complaints and whistleblowing reports against violations committed by organizations or individuals prescribed in this Decree;

- Have its lawful business interests in Vietnam protected according to the granted construction operating license.

What are obligations of the foreign contractor in Vietnam?

Pursuant to Clause 2 Article 107 of the Decree 15/2021/ND-CP, the foreign contractor has obligations to:

- Establish an executive office in the area where the project is executed after obtaining the construction operating license; register address, telephone, fax, email, seal, account and tax identification number of the executive office. Regarding the contract on planning formulation, construction project formulation, construction survey or construction design, the foreign contractor may establish an executive office in the area where the investor’s head office is located or establish no executive office in Vietnam. Regarding the contract on construction and supervision construction of the work that goes through multiple provinces, the foreign contractor may establish an executive office in an area which the work goes through. The executive office shall only operate within the term of contract and it shall be dissolved when the contract expires;

- Register or cancel specimen of the seal or return the seal after a contract is terminated as prescribed by law. The foreign contractor shall only use this seal for executing contracts in Vietnam as prescribed in its construction operating license;

- Register and pay taxes as prescribed by Vietnam’s law, comply with accounting regulations, open accounts and make payments under the guidance of the Ministry of Finance and the State Bank of Vietnam to serve its business under the contract;

- Recruit employees and employ Vietnamese and foreign employees as prescribed by Vietnam’s law on labor. Only economic management experts, technical management experts and skilled labors that Vietnam is unable to provide are sent to Vietnam;

- Follow procedures for import and export of materials, machinery and equipment related to the contract agreement in Vietnam as prescribe by Vietnam’s law;

- Execute joint-venture contract concluded with the Vietnamese contractor or employ Vietnamese sub-contractors mentioned in the application for issuance of construction operating license;

- Buy insurance as prescribed by Vietnam’s law in respect of operation of the contractor, including: professional liability insurance for construction consultancy contractors; cargo insurance for procurement contractors; insurance for construction execution contractors and other insurance policies as prescribed in Vietnamese law;

- Register and inspect quality of imported materials and equipment provided under the contract agreement;

- Register and inspect safety of construction equipment and vehicles related to business activities of the foreign contractor as prescribed by Vietnam’s law;

- Comply with regulations on standards, criteria, construction quality control, occupational safety and environmental protection as well as other relevant regulations of Vietnamese law;

- Comply with reporting regulations specified in its construction operating license;

- When the work is completed, the foreign contractor must prepare as-built documents; take responsibility for warranty; make statement of exported materials and equipment; handle remaining materials and equipment in the construction contract in accordance with regulations of law on import and export; re-export materials and construction equipment registered in accordance with regulations on temporary import – re-export; complete the contract; concurrently, notify relevant regulatory agencies of the contract completion, shutdown of the executive office.

Best regards!