The laws of Vietnam are complex and new legislation is constantly being introduced. What follows is no more than an introductory overview that we hope will assist investors to decide which areas of law they will need to research further.
This summary is, necessarily, selective and is no substitute for detailed legal advice.
1. Unless the site has already been zoned, an application has to be made to the Construction Department or the Chief Architect's Office with authority over the site for the issue of a zoning certificate. There are certain exemptions, such as in Export Processing and Industrial Zones, where the Authority in such Zones has delegated authority.
2. Four basic designs have to be submitted:
(a) the preliminary design;
(b) the architectural design;
(c) the structural design;
(d) the foundation design.
3. Foreign design and construction consultancies must be registered at the Ministry of Construction and must operate in co-operation with Vietnamese counterparts.
4. Unless specialised techniques are involved, surveys have to be carried out by Vietnamese organisations.
5. If non-Vietnamese technical or safety standards are to be applied, they must be approved by the Ministry of Construction.
6. The design is evaluated based on dossiers dealing with:-
(1) a general report on geological conditions;
(2) a plan of the lay out of the protect;
(3) a plan of the structural layout;
(4) a plan of the foundations;
(5) a description of the water system;
(6) an overall design plan;
(7) a list of standards to be used.
7. Depending on the scale of the Investment, the projects are either evaluated by the Ministry of Construction or the Chairman of the People's Committee of the Provinces and minor Cities.
8. The next step in the process is the issue of the Construction Permit. These are issued by the Directors of the Departments of Construction or by Chief Architects of Cities. The investor is required to submit:-
- an application form;
- a certificate of land use right;
- the evaluated design.
9. The project has to commence within 12 months of the Construction Permit being issued.
10. The legislation on bidding is detailed and it must be complied with if a tender is issued.
11. Bidders have to co-operate with Vietnamese Construction Organisations. A contractor cannot be selected without bidding except where the project is either (i) a wholly foreign owned project or a Build Operate Transfer Project; or (ii) a project where the investors select Vietnamese consultancy organisations, subject to approval by the ministry of Construction.
12. Projects are subject to quality inspection as the phases progress and on completion of the whole project. Within 3 months of a project coming into operation, the investor has to submit a dossier regarding construction and quality to the National Bureau of Archives.
13. Foreign constructors must apply to the Ministry of Construction for a permit. Permits are granted on a project by project basis. There are financial criteria that have to be met. Preferences in favour of Vietnamese materials and staff are applied.
14. Guidelines have been issued by the SCCI in relation to the construction of hotels, flats and offices. Where these are constructed for rental, they must be of at least 3 star international standard. Requirements for the construction of t new hotel vary depending upon its geographical location:-
- In Ho Chi Minh City :- it must have, at least, 150 rooms or floor space of 8,000m2 or invested capital of more than US$ 8 million;
- In Hanoi :- it must have at least 100 rooms, or floor space of 5,00m2 or invested capital of more than US$ 5 million;
- In Haiphong/Vungtau/Nhatrang/Danaiig:- it must have at least 50 rooms, or floor space of 25,000m2 or invested capital of more than US$5 million.
- In other regions :- smaller scale projects may be permitted.
Construction to expand or upgrade existing hotel facilities is also regulated;
In Ho Chi Minh City : the minimum new invested capital, excluding the value of the existing construction, required is US$ 800,000.
Average expected investment per room for hotels, flats and offices is also stipulated, again varying according to the geographical location of the project.
The guidelines make it clear that such construction projects are expected to proceed by way of joint venture. Wholly foreign owned enterprise will no longer be permitted.
NOTE: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
If you would like further advice please contact: David Ellis, Johnson Stokes & Master, 16th Floor, Princes Building, 10 Chater Road, Hong Kong; Tel 2843 4226; Fax no. : 2845 9121. Alternatively do a text search "Johnson Stokes and Master" and "Business Monitor".