Circular No. 14/2016/TT-BXD guiding the issuance of construction activity permits and the management of foreign contractors operating in Vietnam

CIRCULAR

Guidelines on Issuing Construction Operation Licenses and Managing Foreign Contractors Engaged in Construction Activities in Vietnam

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Pursuant to the Construction Law No. 50/2014/QH13 dated June 18, 2014;

Pursuant to Decree No. 62/2013/NĐ-CP dated June 25, 2013 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Construction;

Pursuant to the Government Decree No. 59/2015/NĐ-CP dated June 18, 2015 on project management for investment in construction;

Considering the proposal of the Director of the Construction Activity Management Department,

The Minister of Construction issues this Circular guiding the issuance of construction operation licenses and managing foreign contractors engaged in construction activities in Vietnam.

Article 1. Scope of Regulation and Applicability

1.     Scope of Regulation: This Circular guides the issuance of construction operation licenses and the management of foreign contractors engaged in construction activities in Vietnam.

2.     Applicability: This Circular applies to foreign contractors engaged in construction activities in Vietnam including: planning construction, investment project planning, construction surveying, construction design, construction implementation, construction supervision, project management for investment construction, contractor selection in construction activities, completion acceptance and handover of construction works for use; warranty and maintenance of construction works; provision of materials and equipment technology along with related technical services for construction works and other activities related to construction works.

Other contents related to the activities of foreign contractors shall be implemented in accordance with the Construction Law 2014, Decree No. 59/2015/NĐ-CP dated June 18, 2015 of the Government on project management for investment construction (referred to as Decree No. 59/CP) and other relevant laws.

3.     In case international treaties to which Vietnam is a party provide different provisions from those stipulated in this Circular, such treaties shall be applied.

Article 2. Principles of Management of Foreign Contractor Activities

1.     Foreign contractors may only engage in construction activities in Vietnam after being granted a construction operation license by the competent state agency of Vietnam.

2.     The activities of foreign contractors in Vietnam must comply with the provisions of Vietnamese law and relevant international treaties that Vietnam has signed or acceded to.

Article 3. Conditions for Granting a Construction Operation License

As stipulated in Article 71 of Decree No. 59/CP.

Article 4. Application Documents for Issuance of a Construction Operation License for Organizations (Foreign Contractors)

Foreign contractors shall submit directly or send via postal service one set of application documents to the licensing authority for construction operations comprising:

1.     An application form for issuing a construction operation license as prescribed in Appendix No. 1 of this Circular.

2.     A copy or file containing a color scan of the original document in image format or another format (*.pdf) regarding the tender results or decision to select the contractor or legally binding subcontracting contract.

3.     A copy or file containing a color scan of the original document in image format or another format (*.pdf) of the establishment permit (or business registration certificate of the organization) and professional qualification certificate (if any) issued by the country or place where the foreign contractor holds citizenship or where the project is being carried out.

4.     A file containing a color scan of the original document in image format or another format (*.pdf) of the report on construction activity experience related to the contracted work as prescribed in Appendix No. 2 of this Circular and a consolidated audit report for the three most recent years (in cases where the contractor accepts a tender package not subject to mandatory application under Vietnamese law on bidding).

5.     A copy or file containing a color scan of the original document in image format or another format (*.pdf) of a joint venture contract with a Vietnamese contractor or a subcontracting contract with a Vietnamese subcontractor (included in the tender dossier or bid dossier), clearly specifying the work to be performed by the Vietnamese contractor.

In cases where the subcontractor cannot be determined at the time of tendering or selecting the contractor, when applying for a construction operation license, there must be a subcontracting contract with a Vietnamese subcontractor accompanied by the approval document of the investor and a copy of the Business Registration Certificate of the Vietnamese subcontractor.

6.     A valid power of attorney for persons who are not the legal representatives of the contractor as prescribed in Appendix No. 3 of this Circular.

7.     A file containing a color scan of the original document in image format or another format (*.pdf) of the investment decision or investment certificate or approval document for the investment proposal.

The application for a construction operation license must be in Vietnamese. Foreign establishment permits or business registration certificates must be legalized by consular authentication, except in cases where international treaties to which Vietnam and the relevant countries are parties provide for exemption from consular legalization. Documents and materials in foreign languages must be translated into Vietnamese and the translations must be notarized or certified in accordance with Vietnamese law.

For application documents for issuance of a construction operation license arising in the same year, it is not necessary for the documents to include those specified in Clause 3 and Clause 4 of this Article.

Article 5. Documents for Applying for Construction Business Operation Permit for Individuals (Foreign Contractors)

Foreign contractors who are individuals shall submit directly or send via postal service one set of documents to the authority issuing construction business operation permit, including:

1.     An application form for construction business operation permit as specified in Appendix No. 4 of this Circular.

2.     A copy or file containing a color scan of the original document in image format or other format (*.pdf) of the bidding result, award decision, or valid tender contract.

3.     A copy or file containing a color scan of the original document in image format or other format (*.pdf) of the business operation permit or professional certificate issued by the country where the individual holds citizenship or the location where the project is implemented, along with a copy of the individual's passport.

4.     A file containing a color scan of the original document in image format or other format (*.pdf) of the investment decision, investment certificate, or approval document for the investment proposal.

The application form for construction business operation permit must be in Vietnamese. Copies of business operation permits or professional certificates issued abroad must be legalized by consular authentication, except in cases where international treaties to which Vietnam and the relevant countries are parties provide for exemptions from consular legalization. Documents and materials in foreign languages must be translated into Vietnamese and the translations must be notarized or certified in accordance with Vietnamese law.

For applications for construction business operation permits arising in the same year, it is not necessary for the documents to include those specified in Clause 3 of this Article.

Article 6. Process for Issuing Construction Business Operation Permit

1.     Within five working days from the date of receipt of the documents, the authority issuing construction business operation permit shall examine the documents. In case the documents are incorrect or incomplete according to the regulations, the authority shall notify and guide once in writing for the contractor to supplement and complete the documents.

2.     Within twenty working days from the date of receipt of the valid documents as stipulated, the authority issuing construction business operation permit shall examine and issue the construction business operation permit to the contractor. If the documents do not meet the conditions prescribed for issuance of the construction business operation permit, the authority issuing the permit shall notify in writing to the contractor.

3.     The construction business operation permit issued to contractors that are organizations is specified in Appendix No. 5, and for contractors that are individuals, it is specified in Appendix No. 6 of this Circular.

4.     Contractors are responsible for paying fees when receiving the construction business operation permit or adjusted construction business operation permit in accordance with the regulations of the Ministry of Finance.

Article 7. Adjustment of Construction Business Operation Permit

1.     After obtaining the construction business operation permit, if there are changes in the name, address of the contractor, changes in partners in joint ventures or subcontractors, or other contents recorded in the issued construction business operation permit, foreign contractors must submit directly or send via postal service one set of documents to the authority issuing construction business operation permit to request adjustment of the issued construction business operation permit.

The adjusted construction business operation permit is specified in Appendix No. 7 of this Circular.

2.     The documents for requesting adjustment include:

a)     An application form for adjusting the construction business operation permit as specified in Appendix No. 8 of this Circular.

b)     Supporting documents for the contents requested for adjustment. These documents must be translated into Vietnamese and certified in accordance with Vietnamese law.

3.     The adjustment of the construction business operation permit will be completed within twenty working days from the date of receipt of valid documents.

Article 8. Provisions on Reporting

1.     Annually on December 20th, foreign contractors are responsible for submitting reports to the authority issuing construction business operation permit and the Construction Department at the location of the project, regarding the implementation of contracts as specified in Appendix No. 9 of this Circular.

2.     Annually on December 27th, the Construction Department shall report to the specialized agency under the Ministry of Construction about the issuance, adjustment, revocation of construction business operation permits and the activities of foreign contractors in the locality as specified in Appendix No. 10 of this Circular.

Article 9. Provisions and Methods for Notifying the Project Management Office

1. After obtaining the construction operation permit, foreign contractors shall establish a Project Management Office at the location where the project is situated; register the address, telephone number, fax number, email, seal, bank account, and tax code of the Project Management Office.

For contracts related to the preparation of construction planning, investment project development, construction surveying, and construction design, foreign contractors may establish a Project Management Office at the registered headquarters of the project owner.

For contracts involving construction implementation and construction supervision that traverse multiple provinces, foreign contractors may establish a Project Management Office at a locality where the construction passes through to carry out their work.

2. After completing the registration of the contents of the Project Management Office, foreign contractors shall notify in writing directly or via postal service to the Construction Department where the Project Management Office is established, the specialized agency under the Ministry of Construction, and other relevant agencies according to the model specified in Appendix 11 of this Circular. In case of changes to the information of the Project Management Office, foreign contractors must inform these agencies.

Article 10. Circumstances for Revocation of Construction Operation Permit

Foreign contractors will have their construction operation permit revoked if they violate either of the following two provisions:

1.     Failure to rectify violations after receiving written requests from relevant state management agencies on two or more occasions.

2.     Having been administratively penalized for construction activities covered by the issued construction operation permit for the second time or more.

Article 11. Rights and Obligations of Foreign Contractors

When conducting construction activities in Vietnam, foreign contractors shall enjoy rights and obligations as stipulated in Article 74 of Decree 59/CP.

Article 12. Responsibilities of the Investor or Project Owner towards Foreign Contractors

The investor or project owner shall fulfill responsibilities as prescribed in Article 75 of Decree 59/CP, specifically:

1.     In cases where the application for a construction operation permit has not yet been accompanied by a signed contract, within thirty days from the date of signing the contract, if the foreign contractor cannot present a construction operation permit issued by the competent state agency, the contract must be temporarily suspended until the permit is obtained; guide the foreign contractor to comply with the provisions of Decree 59/CP, this Circular, and other relevant laws; assist the foreign contractor in preparing documents related to the contracted works that must be declared in the application for a construction operation permit and other related procedures as prescribed by Vietnamese law. Together with the foreign contractor, register the export and import of materials, machinery, and equipment related to the execution of the contract for which the foreign contractor is responsible as stipulated in Decree 59/CP.

2.     Supervise the foreign contractor to fulfill all commitments in the joint venture contract with Vietnamese contractors or the use of Vietnamese subcontractors as provided for in Article 71 of Decree 59/CP.

3.     Consider the possibility of providing domestic construction equipment before agreeing on the list of machinery and construction equipment requested by the foreign contractor for temporary importation and re-exportation.

4.     Consider the availability of technical labor in Vietnam before agreeing with the foreign contractor on the list of foreign personnel to enter Vietnam to perform tasks under the foreign contractor's contract.

5.     Confirm the settlement of imported materials and equipment of the foreign contractor upon completion of the project.

6.     When using foreign contractors for project management consultancy or construction quality supervision, the investor or project owner must notify in writing other contractors and construction quality management agencies about the functions and responsibilities of the foreign contractor acting on behalf of the investor or project owner.

Article 13. State Management of Construction Activity Licenses

1.     The Ministry of Construction shall uniformly manage state construction activities of foreign contractors in Vietnam including:

a)     Directing and inspecting the implementation of this Circular.

b)     Handling violations and revoking construction activity licenses nationwide.

c)     Assigning specialized agencies under the Ministry of Construction to implement the contents stipulated in this Circular.

2.     The Ministry of Construction shall assign the Construction Activity Management Agency to perform the following tasks:

a)     Conducting regular annual inspections of the operations of foreign contractors across the country; conducting surprise inspections of foreign contractors when there are signs of violation of construction laws.

b)     Recommending the Ministry of Construction to handle violations and revoke construction activity licenses nationwide.

c)     Organizing the issuance of construction activity licenses online.

3.     Provincial Construction Departments shall be responsible for:

a)     Leading and coordinating with relevant agencies to supervise, monitor, and conduct regular inspections of the operations of foreign contractors within their jurisdiction.

b)     Conducting surprise inspections of foreign contractors within their jurisdiction when there are signs of violation of construction laws.

c)     Reporting regularly before December 15th each year or at any time to specialized agencies under the Ministry of Construction on the situation of issuing construction activity licenses and managing the operations of foreign contractors within their jurisdiction.

Article 14. Effective Date

1.     This Circular takes effect from August 15, 2016, replacing Circular No. 01/2012/TT-BXD dated May 8, 2012 of the Ministry of Construction guiding procedures for issuing tender permits and managing foreign contractors' construction activities in Vietnam.

2.     Foreign contractors who have been issued tender permits according to the Construction Law 2003, Decision No. 87/2004/QĐ-TTg dated May 19, 2004 of the Prime Minister promulgating regulations on managing foreign contractors' activities in the construction sector in Vietnam, Decision No. 03/2012/QĐ-TTg dated January 16, 2012 of the Prime Minister amending and supplementing certain provisions of the regulations on managing foreign contractors' activities in the construction sector in Vietnam promulgated together with Decision No. 87/2004/QĐ-TTg dated May 19, 2004 of the Prime Minister, Circular No. 01/2012/TT-BXD dated May 8, 2012 of the Minister of Construction guiding procedures for issuing tender permits and managing foreign contractors' construction activities in Vietnam shall continue to use Tender Permits until the completion of their contracts.

3.     Relevant agencies, organizations, and individuals shall be responsible for implementing this Circular./.