Construction contracting services are conditional business lines as stipulated in Appendix IV of the Law on Investment 2020. Enterprises engaging in construction execution activities must meet the capacity conditions specified in sector-specific legal regulations, appropriate to the grade of construction works they intend to undertake. Below is an analysis of the capacity requirements that enterprises must meet before carrying out construction activities for Grade III works, in accordance with Decree No. 175/2024/NĐ-CP.
1. General Conditions for the Issuance of a Grade III Construction Competency Certificate3
The construction capacity of an organization is assessed based on both the organization’s experience in executing work and the construction capacity of its individual personnel.
- Requirement on organizational work experience:
Organization engaged in execution of construction works grade III are not required to demonstrate prior construction experience through construction contracts or acceptance records, unlike Grade I and II contractors. This provision facilitates newly established enterprises or those transitioning into the construction sector.
- Requirements on the construction capacity of individual personnel:
a) Individual in the role of site manager:
i) Must be an employee of the company. In cases where the site manager works for two different companies, the company applying for the certificate must be the one offering a higher salary in the employment contract and contributing to the Site Manager’s health insurance (as proof of employment includes the labor contract and evidence of health and social insurance contributions).
ii) Must have at least 2 years of construction experience for those holding a university degree, or 3 years for those with a college diploma, in a field relevant to the construction activities.
iii) Must have participated in the execution of at least one Grade III or higher construction work, or two Grade IV works related to the registered profession.
b) Other technical personnel:
i) Must also be employees of the company.
ii) Must have qualifications appropriate to the assigned tasks. The individual in charge of construction must hold qualifications equivalent to those required for individuals applying for a practicing certificate in construction supervision.
2. Capacity Conditions for Organization engaged in execution of construction works4
- The site manager must meet the requirements for a Grade III site manager, including having appropriate qualifications and the level of experience outlined in Section 1.
- Technical personnel in charge of specific construction activities must hold at least a vocational secondary school, college, or university degree relevant to the tasks they perform.
- The enterprise must be able to mobilize sufficient construction equipment and machinery, appropriate to the type of work undertaken. This capability must be substantiated by documentation, such as long-term equipment lease contracts or proof of ownership.
3. Conclusion
To be granted a new Grade III Construction Competency Certificate for construction execution activities, an enterprise must meet the following basic conditions: (i) Have personnel including a qualified site manager and technical staff who meet the educational and experience requirements; (ii) Be capable of mobilizing construction machinery and equipment suitable for the works to be undertaken.
Meeting all of the above requirements in accordance with Decree No. 175/2024/NĐ-CP forms the legal basis for an enterprise to be issued a Grade III Construction Competency Certificate, thereby qualifying to legally undertake construction works from Grade III and below.
(3) Article 98 of Decree 175/2024/ND-CP dated December 30, 2024, on Detailing a Number of Articles and Measures for the Implementation of the Construction Law on Construction Activities Management (replacing Decree 93/2019/ND-CP)
(4) Article 106 of Decree 175/2024/ND-CP
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