Certain certificates and licenses to be considered in the legal due diligence of construction companies

The construction sector in Vietnam is classified as a conditional business line, subject to stringent supervision under various specialized legal regulations. Accordingly, when carrying out the legal due diligence on construction companies, the review of the legality, validity, and sufficiency of relevant certificates and licenses is essential for assessing the company’s capacity, its compliance with the law, as well as identifying potential legal risks. 

1. Construction capability certificate (applicable prior to 01 July 2025) 

Prior to 01 July 2025, organizations engaging in the following construction activities were required to obtain a Construction capability certificate:¹  

• Construction investment project management consultancy;  

• Construction survey;  

• Construction planning designing;  

• Construction designing or construction design examination;  

• Work construction;  

• Work construction supervision consultancy. 

Construction capability certificates are classified into Class I, Class II, and Class III, each prescribing a distinct scope of permitted activities. These classifications reflect the varying levels of capacity and experience of enterprises, while also defining the types of projects they are legally authorized to undertake. Accordingly, when carrying out the legal due diligence on construction companies operating prior to 01 July 2025, it is important to review the scope of activities, the validity period, and the certificate class to properly assess the legality of operations, the company’s project capacity, and the limitations of its business activities.  

If the target company conducts construction activities without meeting the statutory competence requirements, without holding the required Construction capability certificates, or with an expired certificate, it may be subject to an administrative fine ranging from VND 30,000,000 to VND 50,000,000, and suspension of construction activities for a period from 03 to 12 months, depending on the specific violation.² 

As of 01 July 2025, organizations operating in the construction sector are no longer required to obtain a Construction capability certificate. Instead, they must publicly disclose information regarding their construction competence.³  Therefore, when conducting legal due diligence on construction companies operating after this date, the focus should shift from requesting certificates to reviewing the disclosure of information and assessing its accuracy and completeness. 

2. Construction practice certificate  

Under the current laws, the following positions and individuals engaged in construction activities are required to hold a Construction practice certificate:⁴ 

• Construction investment project managers;  

• Managers or persons in charge of preparing urban and rural planning;  

• Construction survey managers;  

• Managers or persons in charge of construction designing or construction design examination;  

• Construction supervision consultants;  

• Persons in charge of construction investment cost estimation, examination and management. 

When carrying out the legal due diligence, it is essential to review the quantity, class, and scope of practice certificates held by key personnel in a construction company to assess both regulatory compliance and the company’s actual capacity. Any deficiency in certificates, or the engagement of personnel without the required certificates, may give rise to significant risks, such as the potential invalidity of construction contracts or the failure of works to obtain final acceptance. 

In addition, if the target company assigns individuals without the appropriate practice certificate, or without the requisite qualifications corresponding to the type and class of works for regulated positions, it may be subject to an administrative fine ranging from VND 30,000,000 to VND 50,000,000 and required to replace such individuals with those who possess the necessary qualifications or an appropriate practice certificate.⁵ 

3. Construction contracts 

Construction contracts constitute a key legal basis governing the rights and obligations of contractors and investors throughout the execution of a project. During legal due diligence, it is essential to request the target company to provide complete documentation of the construction contracts it has entered into with clients, including any contract appendices (if applicable) and other related documents. The review aims to assess the legality of the contracts and the company’s compliance with applicable laws and regulations. 

In practice, for international or large-scale projects, parties may adopt the standard contracts issued by the International Federation of Consulting Engineers (FIDIC). Accordingly, during legal due diligence, it is crucial to compare and assess the alignment of the contracts used by the target company with applicable legal standards and market practices. This review helps ensure transparency, minimize potential disputes, and safeguard the company’s legal interests in contractual relationships. 

4. Construction permits 

When carrying out construction work for clients, whether new construction or repair and renovation, the target company must ensure that the work has obtained a valid construction permit from the competent state authority, except in cases exempted under current law. ⁶ 

A construction permit is not only a prerequisite legal condition for commencing construction but also serves as a crucial basis for determining the legality of the entire construction activity. During legal due diligence, particular attention should be paid to the validity, scope, and consistency of the construction permit with the design documentation and the signed construction contracts. 

If construction is carried out without a permit or in a manner inconsistent with the permit, the contractor may be subject to a monetary fine ranging from VND 50,000,000 to VND 70,000,000 and required to perform the works in accordance with the granted construction permit.⁷ Additionally, such non-compliance can give rise to disputes between the contractor and the project owner. 

5. Acceptance documentation 

Under current law, the construction contractor is responsible for participating in the acceptance of the project. The acceptance of construction works includes: ⁸ 

• Acceptance of construction works during the construction process and acceptance of transitional stages of construction (if necessary); 

• Acceptance of the completion of work items and the completion of the construction works for putting into operation and use. 

Therefore, during the legal due diligence process, it is necessary to request the target company to provide complete acceptance documentation, including all acceptance minutes during the construction process and related records. In particular, each acceptance minutes must contain the signatures of: (i) the person directly supervising the construction on behalf of the project owner; (ii) the person directly in charge of technical construction on behalf of the construction contractor or the general contractor/main contractor; and (iii) the person directly in charge of technical construction on behalf of the subcontractor, in cases where a general contractor or main contractor is engaged.⁹ 

The absence or incompleteness of such documentation in accordance with legal requirements not only creates a risk that the project may not meet the conditions for operation and use, ¹⁰ but may also give rise to disputes between the project owner and the contractor regarding quality responsibilities and warranty obligations. 

6. Other relevant documentation 

In addition to the documents mentioned above, it is necessary to request the target company to provide other relevant documentation, including insurance for construction site workers, third-party liability insurance, ¹¹ construction logs, ¹² and as-built drawings,¹³ among others.

^{(1) Article 148.4 of the Construction Law 2014 (amended by Article 1.53(a) of the amended Construction Law 2020).} 

^{(2) Article 24 and Article 4.3.(c) Decree 16/2022/ND-CP.}

^{(3) Article 159.1 of the Construction Law 2014 (amended by Article 56.1.d of the Railway Law 2025).}

^{(4) Article 148.3 of the Law on Construction 2014 (amended by Article 1.53(a) of the amended Law on Construction 2020).}

^{(5) Article 24 and Article 4.3.(c) of Decree 16/2022/ND-CP.} 

^{(6) Article 89 of the Construction Law 2014 (amended by Article 1.30 of the amended Construction Law 2020).} 

^{(7) Article 33 and Article 4.3(c) of Decree 16/2022/ND-CP.}

^{(8) Article 123 of the Construction Law 2014.}

^{(9) Article 21.5 of Decree 06/2021/ND-CP.}

^{(10) Article 23.3 of Decree 06/2021/ND-CP.}

^{(11) Article 9.2(c) of the Construction Law 2014 (Article 1.5 of the amended Construction Law 2020).} 

^{(12) Article 13.2 of Decree 06/2021/ND-CP.} 

^{(13) Article 113.2(h) of the Construction Law 2014.}

Date written: 20/09/2025

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