Procedures for establishment of foreign investment construction company in Vietnam

In 2011, the Landmark 72 Building officially went into operation, marking a strong progress in foreign investment projects in the construction field in Vietnam. Since then, many investors have been intending to get into the construction market of Vietnam. However, not all businesses and individuals know the procedures for setting up a foreign-invested construction company in Vietnam.

According to current regulations on foreign investment and free trade agreements to which Vietnam is a member, construction service is a conditional investment industry. This field includes the following specific sub-sectors:

  • Construction of high-rise buildings (CPC 512).
  • Construction of civil engineering works (CPC 513).
  • Erection and installation work (CPC 514, 516).
  • Completion of high-rise buildings (CPC 517).
  • Other construction works (CPC 511, 515, 518).

Currently, in addition to the regulation that the investor of a construction project with foreign capital must be a legal entity, Vietnam does not have any additional conditions restricting market access for foreign investors in the field of construction. This means that the investor can establish a construction business in Vietnam with a foreign charter capital of up to 100%. Procedures to establish an FDI construction company in Vietnam must go through the following steps:

Step 1: Apply for the approval of the investment policy

The competent agency to approve the investment and construction policy will vary depending on the scale and characteristics of the project, possibly the National Assembly, the Prime Minister, or the People’s Committee of the province. The dossiers of application for approval of investment policies at each level are generally the same, including:

  • A written request for the implementation of an investment project.
  • Documents proving the investor’s legal status.
  • Documents proving the financial capacity of the investor.
  • Investment project proposal includes the following main contents: investor, objective, scale, investment capital and capital mobilization plan, labor demand, proposal for investment incentives, impact socio-economic efficiency of the project.
  • Other documents related to the investment project, requirements on conditions and capacity of the investor as prescribed by law (if any).
  • The dossier is submitted at the investment registration agency, then it will be sent to the competent agency for consideration and comments.

Step 2: Apply for an Investment Registration Certificate

For construction projects that must be approved by a competent authority, after receiving the decision approving the investment policy, the enterprise will be granted an investment registration certificate.

For a construction project without an approval decision, the investor must satisfy the following conditions:

  • Investment projects are not in the industries and trades banned from business investment.
  • There is a place to carry out the investment project.
  • Investment projects in accordance with the planning as prescribed by law.
  • Meeting the conditions on investment rate per land area, number of employees (if any).
  • Meeting market access conditions for foreign investors.

Step 3: Establish a construction company with foreign capital

A dossier of establishment of a construction company with foreign capital includes:

  • An application for business registration.
  • Enterprise’s regulations.
  • List of members.
  • A notarized copy of the ID card or passport of the member being an individual; a copy of the enterprise registration certificate of the member being an organization; copy of the identity card of the legal representative of that organization.
  • Power of attorney for the person carrying out the procedures to open a real estate business with foreign capital.
  • Investment registration certificate for foreign investors.

Registration dossiers are submitted at the Department of Planning and Investment. Information on business registration will then be publicly announced on the National Portal within 30 days from the date of issuance of the Enteprise Registration Certificate.

Step 4: Apply for a Certificate of Competency in Construction

To be able to practice construction, an enterprise must have a certificate of capacity for construction activities issued by a specialized agency affiliated to the Ministry of Construction or the Department of Construction, a recognized socio-professional organization. Dossier to apply for a certificate of capacity for construction activities includes:

  • An application for a certificate of competence.
  • Certified copy of the decision on establishment of the organization.
  • A certified true copy of the practice certificate enclosed with the declaration and self-determination of the certificate class or declaration of the practice certificate code, the training diplomas of the individual participating in the work.
  • Certified copy of contract, record of acceptance of completion of construction of work items, construction works or work parts (in the case of specialized construction work) performed according to the provisions of law. declaration content (for construction organizations of class I, class II).