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Types of licenses required for foreign-invested construction companies
For foreign-invested construction companies in Vietnam to be able to operate business, they need to have some mandatory licenses such as: IRC, ERC, construction capacity certificate… Next, we invite you to join Siglaw to learn in detail about the types of licenses required for foreign-invested construction companies.
What is a foreign-invested construction company?
A foreign-invested construction company is an enterprise established under the Enterprise Law, operating in the field of construction or installation, and invested capital from foreign countries.
Some prominent foreign-invested construction companies in Vietnam today include Fecon Joint Stock Company in the field of foundation treatment and construction with typical projects such as Hoa Phat Dung Quat Steel Project, My Dinh Pearl Project, and SUN Grand City Project; Delta Construction Group LLC with prominent projects such as Vinmec Times City Hospital and Vinschool Times City; Unicons Construction Investment Joint Stock Company with typical projects including Intercontinental Danang Sun Peninsula and Sarina Dai Quang Minh; Vietnam Construction and Import-Export Corporation Vinaconex, with notable projects such as the General Department of Taxation Headquarters Project, the construction of the Da Nang – Quang Ngai Expressway, and the Mo Market Center Project.
Licenses required for foreign-invested construction companies in Vietnam
IRC Investment Registration Certificate
An Investment Registration Certificate, commonly referred to as an Investment Certificate or Investment License, is an important license issued by the investment authority of Vietnam, confirming that the company has registered to invest in the construction sector and has been approved to carry out relevant investment activities. The term “Investment Registration Certificate” is defined by investment laws, specifically in Clause 11 of Article 3 of the Investment Law 2020.
An Investment Registration Certificate usually contains information about the name and address of the investor, a description of the investment project, the scale of the project, the investment amount, the implementation period, and other special conditions and regulations related to the project.
To be eligible for this type of license, investors must meet the following conditions:
- The investment project is consistent with national planning, regional planning, provincial planning, urban planning and planning of special administrative-economic units.
- The investment project is not in the prohibited business sectors or occupations. Currently, the prohibited business sectors and occupations are stipulated in Article 6 of the Investment Law 2020, including: Trading in narcotics; Trading in certain types of chemicals and minerals specified in Appendix II; Trading in specimens of wild plants and animals of natural origin; Prostitution; Buying and selling people, tissues, corpses, human body parts, and human fetuses; Business activities related to human asexual reproduction; Trading in explosives; Debt collection services.
- Have a location to implement the investment project;
- Meet the market access conditions for foreign investors.
- Meet the conditions on investment rate per land area, number of employees (if any);
If it is determined that all the conditions prescribed by law to establish a foreign-invested construction company in Vietnam are met, investors will need to prepare a dossier to apply for an IRC Investment Registration Certificate:
- A document requesting to implement an investment project, with the goal of establishing an FDI enterprise in the construction sector.
- Certified copies of documents such as Passport or Identity Card (CCCD), ID card in case the subject is an individual. If it is an organization, submit the Decision on establishment/Certificate of business registration of that foreign organization.
- Proposal for an investment project in the construction sector.
- The financial statements of the enterprise within the last 2 years must also be submitted, along with a commitment of financial support from the parent company or financial institution or related documents.
- Proposal for land use or a copy of the site lease agreement, together with documents confirming the investment has the right to use the project site in case the project uses land.
- Explanation of the use of this technology.
After submitting a complete application, the Department of Planning and Investment will review and issue an Investment Certificate to the foreign investor within 15 days from the date of receipt of the complete application, according to regulations. If the enterprise is not granted an Investment Certificate within the prescribed time limit, the competent authority will notify the investor in writing and state the reasons.
ERC Enterprise Registration Certificate
The ERC Enterprise Registration Certificate is a legal document proving the recognition of the state agency for the existence and operation of a business in Vietnam. To obtain an ERC, the company must submit an application and carry out business registration procedures at the competent authority, usually the Business Registration Office at the provincial or municipal level. The content recorded on the ERC includes:
- A business code which is also a tax code that will follow the business from its establishment to its termination
- Business name: Vietnamese name, foreign name, abbreviation.
- Business address, phone number, email, website, fax.
- Registered charter capital
- Number of shares (For joint stock companies)
- Capital contributors (For LLCs with 2 or more members)
- Company owner (For LLCs with 1 member)
- Information about the legal representative of the Company.
To apply for this type of license, a business must prepare a set of documents to establish a new business.
Construction Capacity Certificate
Documents related to the Construction Capacity Certificate are a prerequisite for a construction enterprise to be licensed to perform construction in the construction industry in Vietnam. The Construction Capacity Certificate ensures that these organizations have the necessary capacity and knowledge to carry out construction projects safely, effectively, and in compliance with quality standards. To be granted this type of certificate, the established Construction Company needs to prepare the following documents:
- Application for a Construction Capacity Certificate.
- Work management process or corresponding quality management system.
- Copy of Business Registration Certificate or Decision to establish a 100% foreign-owned construction company.
- A declaration of experience of a typical enterprise, clearly stating at least 3 recent jobs related to the registration content.
- List of key members, along with relevant documents such as practice certificates, labor contracts, and similar documents.
- Declaration of financial capacity of the company.
After the foreign-invested construction company has submitted its application, the competent authority will examine and process the application within specific time limits. The application processing time usually depends on the type of certificate the company is applying for: 10 days (for Class II certificate) or 15 days (for Class I certificate). During this period, specialists carefully examine and review the application to ensure that all relevant information and documents have been submitted accurately and completely.
If any errors or important information is found during the application review, the foreign-invested construction company will be notified and required to make amendments or supplements to the application to adjust it according to the requirements of the competent authority. This is to ensure that the dossier fully meets the standards and legal requirements, thereby facilitating the issuance of a construction permit. In case the dossier is valid and has no significant errors, the company will receive the result of granting the Construction Capacity Certificate as required. This allows the company to continue implementing their construction project legally and safely, in compliance with the necessary regulations and standards.
For detailed advice, please contact Siglaw law firm at the information below to receive dedicated support from a team of lawyers and experts with many years of experience in establishing FDI companies, including establishing foreign-invested construction companies.
Phone: (+84) 961 366 238
Email:
- vphn@siglaw.com.vn
- vphcm@siglaw.com.vn
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