Regulations on payment and settlement of construction investment in Vietnam

Regulations on payment and settlement of construction investment in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. Payment of construction investment in Vietnam

Article 34 of Decree 10/2021/ND-CP stipulates the payment of construction investment in Vietnam as follows:

- Payment of construction investment and deadline therefor:

+ Projects utilizing public investment shall conform to regulations and law on public investment;

+ Projects utilizing non-public investment state capital and PPP projects shall conform to relevant regulations and law.

- Investors or legal representatives thereof are responsible for value applied for payment under payment applications as per the law; agencies paying construction investment are not responsible for accuracy of value applied for payment under corresponding applications of investors or legal representatives thereof.

If errors are found in payment applications during payment process, agencies paying construction investment shall inform investors or legal representatives thereof in writing for revision.

- Agencies paying construction investment and investors are prohibited from developing regulations contradictory to regulations and law on payment of construction investment.

2. Settlement of construction investment in Vietnam

The settlement of construction investment in Vietnam according to Article 35 of Decree 10/2021/ND-CP is as follows:

- Construction investment projects must be settled in terms of construction investment after being transferred into use or permanently suspended at written request of competent authorities.

- Investment capital for settlement must be within total approved or revised investment as per the law.

- Investment capital for settlement refers to the entire legitimate cost required in construction process to bring project structures into use. Legitimate costs are all costs within the scope of approved projects, designs, estimates; construction contracts signed as per the law, including approved amendments thereto.

PPP projects shall conform to regulations and law on investment in form of public-private partnerships.

- Contractors are responsible for preparing documents on settlement of contracts signed with investors as per the law on construction contracts which serve as the basis for settling investment capital.

- Investors are responsible for settling construction investment within total approved investment of projects; prepare documents on settlement of construction investment and conversion of construction investment and request investment deciders to approve within 9 months from the date on which acceptance records of structures are signed and structures are transferred into use.

For independent work items or structures within projects with multiple structures to be transferred into use, in case immediate settlement is required, investors shall report to investment deciders.

- Agencies appraising and approving settlement are responsible for appraising and approving settlement within 9 months from the date on which adequate settlement documents are received.

- Investors are responsible for dealing with public debts and finalizing project accounts at agencies paying investment capital within 6 months from the date on which decisions on approval of settlement of capital of completed investment project are issued.

In case completed projects with approved settlement have not been assigned with adequate capital, investors shall report to investment deciders and relevant agencies to deal with public debts and finalize project accounts as per the law.

- For construction investment projects utilizing public investment capital, after the end of the fiscal year, the investors shall make annual settlements as prescribed by the Ministry of Finance of Vietnam.

- Investors that fail to perform settlement in a timely manner according to Clause 5 of this Article shall be met with penalties according to regulations and law on imposing penalties against administrative violations in construction investment.

- Entitlement to approval of settlement of construction investment:

+ For national important projects and other important projects in which investment is decided by the Prime Minister: superior authorities of investors shall approve cost statements of component projects funded by public investment capital and component projects funded by non-public investment state budget;

+ For remaining projects, individuals capable of approving settlement of construction investment or authorizing approval of settlement of construction investment of completed projects shall decide on investment;

+ PPP projects shall conform to regulations and law on investment in form of public-private partnerships.

Quoc Dat

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