Duration of investment project contract in Vietnam

Duration of investment project contract in Vietnam (Image from Internet)

1. Duration of investment project contract in Vietnam

The duration of investment project contract according to Article 74 of the Bidding Law 2023 is as follows:

- The Duration of investment project contract is the period defined in the agreement signed between the parties.

- The contract duration is calculated from the time the investment project contract becomes effective until the investor fulfills the commitments proposed in the bid submission and other obligations as per the agreement between the parties in the investment project contract.

- Upon expiration of the contract duration, the investor follows the project investment regulations of the law on investment and other related regulations.

2. Regulations on signing of contract and rules for executing investment project contracts in Vietnam

The regulations on signing of contract and rules for executing investment project contracts in Vietnam as per Article 71 of the Bidding Law 2023 are as follows:

- The signing of the investment project contract must meet the following conditions:

+ At the time of signing, the investor's bid file which is selected remains valid;

+ At the time of signing, the selected investor must ensure it meets the technical and financial capacity required for executing the investment business project as specified in the bidding documents.

- The contract signed between the parties must align with the contents of the invitation to bid documents, bid documents, decision on investor selection approval, and the contract negotiation and finalization document.

- The competent authority or the procuring entity (in cases of delegation) signs the contract with the selected investor. For joint-venture investors, all members of the joint venture must personally sign and seal (if applicable) the contract document.

- The execution of the investment project contract adheres to the principles set out in Article 69 of the Bidding Law 2023.

3. Regulations on security for performance of investment project contract in Vietnam

The regulations on security for performance of investment project contract in Vietnam as per Article 75 of the Bidding Law 2023 are as follows:

- The investor must implement one of the following measures to ensure responsibility for executing the investment project contract before or at the same time when the contract becomes effective:

+ Submit a letter of guarantee from a domestic credit institution or an international bank branch established under Vietnamese law;

+ Submit a warranty insurance certificate from a domestic non-life insurer or a foreign non-life insurer's branch established under Vietnamese law.

- Based on the scale and nature of the investment business project, the value of ensuring contract execution is stipulated in the bid documents ranging from 1% to 3% of the total investment capital.

- The validity period of the contract execution guarantee is calculated from the official signing date of the contract until the contract termination date. In cases of extending the contract execution time, the investor must correspondingly extend the validity period of the contract execution guarantee.

- The investor will not be reimbursed for the contract execution guarantee in the following cases:

+ Refusing to execute the contract after it becomes effective;

+ Violating agreements in the contract;

+ Delayed contract execution due to the investor's fault while refusing to extend the validity of the contract execution guarantee.

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