Circular No. 16/2000/TT-BXD guiding the management of construction for foreign investment activities and the management of foreign contractors participating in construction and consulting works in Vietnam.

CIRCULAR

Guidelines for construction management concerning foreign investment activities

and managing foreign contractors to undertake construction and consulting services

for construction projects in Vietnam

Pursuant to Article 112 of Decree No. 24/2000/NĐ-CP dated July 31, 2000 of the Government stipulating that relevant ministries and sectors have the responsibility to guide foreign investment activities under their management; Implementing the State management functions regarding construction as prescribed in Decree No. 15/CP dated March 4, 1994 of the Government. The Ministry of Construction guides the management of construction works with direct foreign investment capital, manages the activities of organizations engaged in construction and construction consulting established under the Law on Foreign Investment in Vietnam, and manages foreign contractors undertaking construction and consulting services for construction projects in Vietnam as follows:

I. MANAGEMENT OF CONSTRUCTION WORKS WITH FOREIGN INVESTMENT CAPITAL

1. Review of planning and architectural design of construction works:

1.1. Objects of review:

1.1.1. All foreign investment projects under the Law on Foreign Investment in Vietnam that involve construction works must be reviewed for planning and architectural design during the project investment approval process.

1.1.2. For foreign investment projects that only require "Registration for Investment License," the planning of the construction work must meet the conditions specified in point 1.b of Article 105 of Decree No. 24/2000/NĐ-CP dated July 31, 2000 of the Government (regarding the project's compliance with approved planning).

1.2. Content of review:

1.2.1. The content of the planning review involves examining the preliminary design in the project dossier for its consistency with the planning certificate (for areas with detailed planning already approved) or the agreement on architecture and planning (for areas without detailed planning approved) according to the requirements set forth in point 4.2.5 of Article 42, Chapter 4 of the Construction Standards Volume 1 issued pursuant to Decision No. 682/BXD-CSXD dated December 14, 1996 of the Minister of Construction.

1.2.2. The content of the architectural design review involves examining the preliminary design of the construction work for its consistency with the overall layout plan, spatial form combination, main facade architecture, exterior decoration, and landscape arrangement compared to the surrounding area's architecture, landscape, and environment.

1.3. Documents for submission for planning and architectural design review are included in the project dossier for submission for review, including:

1.3.1. Preliminary design documents of the construction work consistent with the requirements stated in Clause I.A of Appendix 1 attached to the "Construction Quality Management Regulations" issued by Decision No. 17/2000/QĐ-BXD dated August 2, 2000 of the Minister of Construction.

1.3.2. Planning certificate or agreement on architecture and planning issued by the local Construction Department. In cases where the construction work is located within industrial zones, export processing zones, or high-tech parks (hereinafter referred to collectively as industrial parks), the infrastructure company of the industrial park extracts a copy of the detailed land planning within the industrial park based on the approved detailed industrial park planning instead of the planning certificate. The planning certificate or agreement on architecture and planning is requested and issued according to the model in Appendix 1.

1.4. Reviewing authorities:

1.4.1. The Ministry of Construction reviews the planning and architectural design of construction works for Class A projects (excluding projects within industrial parks with detailed planning).

1.4.2. The Construction Department assists the People's Committee of the province in reviewing the planning and architectural design of construction works in the project dossier for Class B projects (excluding projects within industrial parks with detailed planning).

1.4.3. The provincial industrial park management board reviews the planning and architectural design of construction works for investment projects within industrial parks with detailed planning.

1.5. Review of planning and architectural design for infrastructure investment projects in industrial parks:

When reviewing infrastructure investment projects in industrial parks, the review of planning and architectural design involves reviewing the detailed planning design of the industrial park submitted by the investor. According to Clause 3 of Article 23 of Decree No. 36/CP dated April 24, 1997, the Ministry of Construction is the authority responsible for reviewing and approving detailed planning of industrial parks (except in cases where the Prime Minister has made a different decision).

2. Technical design review of construction works:

2.1. Content of technical design review:

2.1.1. Legal status of the design organization:

a) For projects implemented by Vietnamese consulting and design organizations, the consulting and design organizations must have business registration and design services licensed by the Vietnamese government. For projects implemented by foreign consulting and design organizations, after being selected for tender or winning the bid, the foreign consulting and design organizations must register to obtain a construction consultancy bidding license in accordance with Part III of this Circular.

b) Survey work serving the design of construction works (including topographic survey, engineering geological survey, hydrogeological and environmental survey) must be conducted by Vietnamese legal entity survey organizations. In cases where special technical requirements exist that Vietnamese survey organizations cannot fulfill, the investor may select a foreign survey organization to carry out the survey. Such foreign survey organizations must register to obtain a survey permit from the Ministry of Construction.

2.1.2. Consistency of the technical design with planning and architectural design:

a) Examine the consistency of the planning and architectural design of the technical design with the project that has been reviewed when issuing the investment license, consistent with the planning certificate or agreement on architecture and planning issued. If there are changes in the overall layout and architectural design of the construction work in the technical design compared to the preliminary design, the planning and architectural design review will be carried out according to the content at point 1.2 above.

b) In cases where the technical infrastructure outside the construction site boundary (outside the project land plot) is not yet available or does not match the construction design, the investor needs to have a handling plan and reach an agreement with the specialized management agency (as stipulated in Article 103 of Decree No. 24/2000/NĐ-CP).

2.1.3. Consistency of the technical design with applicable standards and regulations:

a) The design of the construction project shall be carried out in accordance with Vietnam's Construction Standards and Building Standards. In cases where foreign standards are applied, such application must be approved in writing by the Ministry of Construction.

b) The review of compliance with applicable standards for design purposes shall be conducted on the content of the design description and drawings in the design dossier to ensure conformity with the level of the construction project, safety conditions of the construction project, fire prevention and explosion protection safety, and environmental protection.

2.2. Design Review Organization:

2.2.1. Classification of Design Reviews:

a) The Ministry of Construction shall conduct technical design reviews for construction projects under Category A projects, except for small-scale construction works within Category A projects (with construction value less than 10% of the total investment but not exceeding 10 million USD) and projects implemented under the Build-Operate-Transfer (BOT), Build-Transfer-Operate (BTO), and Build-Transfer (BT) contract forms.

b) Provincial Construction Departments and Construction Departments of centrally-administered cities shall organize technical design reviews for construction projects under Category B projects and small-scale construction works within Category A projects mentioned in point a above, and submit to the provincial People's Committee for approval of the design (excluding BOT, BTO, and BT projects).

c) The competent state agency responsible for signing BOT, BTO, and BT contracts shall take the lead and coordinate with the Ministry of Construction, specialized construction management ministries, provincial People's Committees, and centrally-administered city People's Committees to review the technical designs of projects under BOT, BTO, and BT contracts.

2.2.2. Documents for Technical Design Review Submission:

The project owner shall directly submit four sets of design documents to the reviewing authority (classified according to point 2.2.1 above), each set including:

a) A request for technical design review and construction permit application (signed and stamped by the project owner) according to the model at Appendix 2 of this Circular.

b) Documents confirming the legal status of the design organization according to the provisions at Section 2.1.1 above.

c) Conclusions from the planning and architectural scheme review during the investment permit issuance stage.

d) Technical design documents including:

d.1) A comprehensive design description of the construction project accompanied by climate survey data, geological data, environmental data, other relevant design data, a list of foreign standards used for design that have been approved by the Ministry of Construction, and a list of software programs used for design.

d.2) The conclusion of the consulting organization conducting the design verification (if any).

d.3) Master site plans and layout diagrams of production lines.

d.4) Overall architectural drawings of the construction project including floor plans, elevation drawings, section drawings, and main structural drawings of foundations and building bodies.

d.5) Comprehensive technical infrastructure system drawings of the construction project and connection diagrams to common technical infrastructure systems.

d.6) Planning certificate or agreement on architecture and construction planning.

d.7) A certified copy of the land lease decision or land lease contract or land use right certificate attached with the cadastral map extract at scale 1/200. June 2024; 1/500;

d.8) A copy of the investment permit and agreements from state management agencies regarding the environment and fire prevention and explosion protection.

d.9) A list of special construction materials required for import into Vietnam according to the project design.

2.2.3. When the design review involves other construction specialties, the design review authority must invite the relevant construction management ministry or department (and the Industrial Zone Management Board if the project is located within an industrial zone) to participate in the review and prepare a report according to Model 1 in Appendix 3 of this Circular.

The result of the design review is a decision approving the technical design and construction of the project issued by the reviewing authority according to Model 2 in Appendix 3 of this Circular.

2.2.4. Design documents that have been reviewed must be stamped by the reviewing authority and returned to the project owner two sets, retained by the reviewing authority one set, and given to the local Construction Department (or the Industrial Zone Management Board if the project is located within an industrial zone) one set for monitoring implementation.

2.2.5. The time limit for the technical design review of the entire project or by design phase is twenty working days from the date of receipt of complete and valid documents. For incomplete submissions, the reviewing authority must issue a written request for the project owner to supplement the documents within five working days from the date of receipt, and the design review period will be extended accordingly.

2.2.6. The project owner shall pay the design review fee to the reviewing authority according to the regulations of the Ministry of Finance.

2.2.7. If twelve months have passed since receiving the design review and construction decision and the project has not commenced construction, that decision will no longer be enforceable. If continued construction is necessary, the project owner must provide a written explanation for the reviewing authority to consider continuation or re-review. During construction, any changes to the architecture, planning, or main structure of the project compared to the reviewed design can only be implemented after approval from the design review authority.

2.2.8. The design review authority is responsible before the State and Vietnamese law for its review and decisions.

2.3. Implementation of Construction Projects.

After receiving the design review and construction decision from the reviewing authority, the project owner may commence construction according to the reviewed design; or if twenty working days have passed from the date of submission of complete design review application documents (based on the signed receipt) without the design review authority issuing a decision, the project owner may commence construction according to the submitted design documents. The project owner must notify the commencement of construction ten days prior to the reviewing authority and local government (and the Industrial Zone Management Board if the project is located within an industrial zone).

3. Supervision of Tendering in Construction.

The competent authority issuing construction bidding permits and consulting services for construction shall examine the implementation of construction bidding when considering issuance of bidding permits to foreign contractors in accordance with Clause 3 of Article 94 of Decree No. 24/2000/NĐ-CP dated July 31, 2000 of the Government, including the following contents:

3.1. The legality of the foreign legal entity registered to undertake construction compared with the bidding result confirmation document issued by the competent authority in accordance with the Bidding Regulations.

3.2. The fulfillment of the contractor's commitments according to the bidding evaluation results and the provisions of the Bidding Regulations.

4. Quality management of construction works

4.1. Responsibilities for ensuring the quality of construction works:

4.1.1. The project owner is responsible under Vietnamese law for ensuring the quality of construction works, safety and stability of the works, fire prevention and explosion protection, and environmental protection during the construction period as well as throughout the usage period of the works.

4.1.2. Surveying, design organizations, and construction contractors are responsible to the project owner and Vietnamese law for their respective tasks and products related to the quality of the works.

4.2. The quality of construction works funded by foreign investment (including works in industrial parks, works under BOT, BTO, BT contracts) shall be managed and implemented in accordance with the provisions of Chapters 1, 3, 4, and 5 of the Construction Work Quality Management Regulation issued together with Decision No. 17/2000/QĐ-BXD dated August 2, 2000 of the Minister of Construction, except for the content related to the State Acceptance Council mentioned in Clause 3 of Article 19 of that Regulation. For construction works under BOT, BTO, BT contracts, the competent state agency signing the BOT, BTO, BT contracts must organize its specialized department to participate in supervising the construction process, inspecting and accepting the quality of the works during construction and upon completion.

4.3. Upon completion of construction works (after organizing acceptance and putting the works into use), the investor must report to the competent authority for design approval (as stipulated in Point 2.2.1 above). The report must be prepared in accordance with the form prescribed in Appendix 4 of this Circular. After submitting the report, the investor is permitted to put the works into use. The investor shall bear full responsibility for the content reported. In necessary cases, the competent authority for design approval may conduct inspections; if violations of the approved design or construction regulations are discovered, they will be handled in accordance with the law.

4.4. Within six months from the date of completing construction and putting the entire works into use, the project owner must submit the completed construction work dossier in accordance with the national regulations on archiving documents.

II. MANAGEMENT OF CONSTRUCTION AND CONSULTING FIRMS ESTABLISHED UNDER FOREIGN INVESTMENT LAW IN VIETNAM

After obtaining the investment permit, construction and consulting firms must ensure business conditions in accordance with the law as follows:

1. Construction firms operating in Vietnam must ensure they have all the "Construction Business Conditions" issued together with Decision No. 27/2000/QĐ-BXD dated December 8, 2000 of the Minister of Construction and comply with other relevant construction laws.

2. For consulting firms engaged in designing construction works, at least one representative of the firm's legal entity or the principal designer of the firm must register with the competent authority to obtain a practice certificate for designing construction works in accordance with the "Regulation on Issuing Practice Certificates for Designing Construction Works" issued pursuant to Decision No. 23/2000/QĐ-BXD dated November 13, 2000 of the Minister of Construction.

III. MANAGEMENT OF FOREIGN CONTRACTORS FOR TAKING ON CONSTRUCTION CONSULTING AND CONSTRUCTION WORKS IN VIETNAM

Foreign contractors taking on construction consulting and construction works in Vietnam through winning bids or being selected according to Vietnam's Bidding Regulations, foreign investment laws in Vietnam, or international agreements signed by the Vietnamese State, when operating, must follow the guidelines set out in this Circular (except where otherwise provided by the Government or international agreements signed by the Vietnamese State):

1. General Provisions

1.1. Foreign contractors include construction consulting contractors (covering project management consulting, surveying, designing, reviewing designs, testing, quality management, and other construction consulting services) and construction contractors (hereinafter referred to collectively as contractors) undertaking construction projects in Vietnam must prepare documents in accordance with this Circular to obtain construction consulting bidding permits or construction bidding permits.

1.2. Bidding permits for construction consulting and construction (collectively referred to as bidding permits) are issued to foreign contractors on a per-contract basis. For subsequent contracts arising in the same year, the application for a bidding permit only includes the application form and additional supporting documents compared to the previous dossier.

1.3. The bidding permit issued to foreign contractors serves as a legal certificate for foreign contractors to implement construction consulting contracts and construction installation works in Vietnam, and to interact with Vietnamese state agencies in complying with relevant Vietnamese laws.

1.4. When receiving the bidding permit, foreign contractors must pay the fee as prescribed by the Ministry of Finance.

2. Documents for Applying for a Construction Bidding Permit submitted by foreign contractors consist of one original copy and three copies (photocopies); the original copy includes:

2.1. Application for a Construction Bidding Permit (according to the form in Appendix 5)

2.2. A copy of the bidding process report, evaluation, and bidding result report of the project owner and the bidding result confirmation document issued by the competent authority or the lawful selection decision of the project owner.

2.3. A copy of the investment permit for the project issued by the competent authority or the investment decision for state-funded works or the construction permit for non-state-funded works.

2.4. Legal entity certificate of foreign contractors: Certificate of establishment and Articles of Association (or Business Registration Certificate) and the professional license issued by the home country to the contractor (certified copy from the home country or certified by the competent diplomatic mission of Vietnam or the home country).

2.5. Joint venture contract with domestic contractors or a commitment to use domestic subcontractors in accordance with the Vietnamese Bidding Regulations.

3. Application for bidding permit for construction consultancy services submitted by foreign contractors. shall be submitted in one original set and three copies (photocopies); the original set includes:

3.1. Application form for bidding permit for construction consultancy services (according to the model at Appendix 5).

3.2. A copy of the evaluation report and bidding results issued by the project owner; confirmation document of the bidding results issued by the competent authority; or the lawful bidding decision made by the project owner.

3.3. A copy of the investment permit for the project issued by the competent authority or the investment decision for state-funded works or the construction permit for non-state-funded works.

3.4. The legal entity certificate for construction consultancy services of foreign contractors issued in their home country (certified copy); a declaration of design experience.

4Organization issuing the bidding permit:

4.1. The Ministry of Construction will issue the bidding permit for foreign contractors implementing tender packages under Category A projects with construction contracts valued at or above 10 million USD or equivalent, and consultancy contracts valued at or above 1 million USD or equivalent (foreign-funded or domestically-funded projects); and cases not within the jurisdiction of the Provincial Construction Department as stipulated in point 5.2 below.

4.2. The Provincial Construction Department will issue the bidding permit for foreign contractors implementing tender packages under Category B projects (foreign-funded projects) and Category B-C projects (domestically-funded projects) within the province and small tender packages under Category A projects below the threshold specified in point 4.1 above.

4.3. Within five working days from the date of receipt of the application for the bidding permit, if the application is found to be incomplete or invalid, the issuing authority will request the contractor to supplement the documents. The examination and issuance of the bidding permit for foreign contractors will be completed within twenty working days from the date of receipt of the complete and valid application.

The bidding permit for construction and construction consultancy services issued to foreign contractors shall follow the model at Appendix 6.

5. Matters that foreign contractors must undertake after obtaining the bidding permit:

5.1. Register the business address, telephone number, fax number in Vietnam and the legal representative with the People's Committee of the province where the project is located and notify the Ministry of Construction and the local Construction Department (and the Industrial Park Management Board if the project is located within an industrial park). Any changes must be registered again and notified accordingly.

5.2. Comply with Vietnamese laws on investment management and construction.

5.3. Implement the provisions stated in the bidding permit and comply with other relevant Vietnamese laws concerning the activity of bidding in Vietnam.

5.4. Submit periodic reports every six months and final reports upon completion of the contract regarding activities conducted under the issued bidding permit to the Ministry of Construction and the local Construction Department (according to the model at Appendix 7).

IV. ORGANIZATION FOR INSPECTION AND IMPLEMENTATION

1Inspection organization:

1.1. Based on the responsibilities assigned in this Circular, the Ministry of Construction, the Construction Departments of provinces and cities shall organize inspections of foreign-invested construction projects, operations of foreign-invested enterprises engaged in construction and construction consultancy, and inspections of foreign contractors' activities annually. When conducting inspections, they must inform the investment permit issuing authority to coordinate.

Unscheduled inspections shall be carried out when signs of violation of construction laws are detected, when complaints related to construction projects are received, or when accidents occur; the inspection authority must conduct inspections and handle them according to the procedures prescribed by law.

Project owners and contractors have the responsibility to facilitate the work of inspection authorities.

1.2. Strictly prohibit any arbitrary inspections not in accordance with the provisions of point 1.1 above and causing inconvenience to the construction process. Any abuse of inspection power causing inconvenience to project owners and contractors will be dealt with strictly according to the law.

1.3. Not later than ten days after the end of the inspection, the agencies conducting audits and inspections must prepare a report to the Minister of Construction, the Minister of Planning and Investment, and the Chairman of the People's Committee of the province (where the project is located) for knowledge and necessary action.

1.4. Every six months, the Construction Departments of provinces and cities shall report to the Ministry of Construction on the issuance of bidding permits for construction, operational status, and implementation of foreign-invested construction projects in their respective areas according to the model at Appendix 8.

2. Implementation:

2.1. This Circular takes effect fifteen days after its signing and replaces Circular No. 01/BXD-CSXD dated April 15, 1997, and Circular No. 03/1998/TT-BXD dated June 12, 1998, of the Ministry of Construction guiding the management of construction projects directly funded by foreign countries and foreign contractors undertaking construction in Vietnam, and replaces Circular No. 02/1998/TT-BXD dated April 29, 1998, of the Ministry of Construction guiding the registration of activities of construction and construction consultancy enterprises directly funded by foreign countries in Vietnam.

2.2. Competent State authorities shall implement this Circular as prescribed; during the implementation, if there are difficulties or issues not covered, they should report to the Ministry of Construction for timely research and resolution./.