Vietnam’s construction business has seen a significant growth over the years with an average annual growth recorded at 9.7%. The output value of the construction industry in Vietnam is forecast to expand up to 2024 with more and more investments in manufacturing, energy, and transport infrastructure.
The Vietnamese government also continues to encourage more foreign investments by relaxing its construction legislations, so that both local and foreign investors can reap the benefits of this booming sector.
As a result, foreign investors know that the best time to start a construction company in Vietnam is now. This guide will provide you with an overview of how you can do that.
Scope of Construction Services Allowed in Vietnam
The World Trade Organisation (WTO)’s Schedule of Specific Commitments in Services of Vietnam defines the scope of construction services permitted in Vietnam:
- General construction work for civil engineering
- General construction work for buildings
- Building completion and finishing
- Building installation and assembly work
In accordance with Vietnam’s Law of Construction, the construction services cover the following activities:
- Instruction planning
- Construction survey
- Investment project formulation to construct a work
- Construction supervision
- Construction work
- Construction design
- Construction project management
- Contractor selection
- And other related construction activities
The construction investment projects in Vietnam are categorised by type, size and how they are funded.
Three Options to Start a Construction Business in Vietnam
The Vietnamese government allows foreign investors to establish a foreign-owned construction company in Vietnam with up to 100% foreign ownership.
There are three options available for foreign investors to conduct their construction business:
1. Invest or Purchase Shares in a Construction Company in Vietnam
By investing in a Vietnam-based construction company, you do not have to set up a company on yourself. You can either invest in a limited liability construction company or buy shares from a joint-stock construction company in Vietnam.
This way, you will have the required and eligible certificate in place to start your construction activities. However, it is necessary to conduct a background check or due diligence on your potential partner before the share purchase and investment.
2. Operate Under a Construction Operating License
Another option to run a construction business in Vietnam without setting a company is through utilising a construction operating license. Every new construction contract requires one construction operating license.
Before you can apply for a construction operating license, you must be chosen as a subcontractor or secure a construction contract. You will also have to work with a local partner in Vietnam and seal a joint-venture contract with them.
3. Establish a Foreign-owned Construction Company
If you plan to conduct your construction business with wider activities, setting up a foreign construction company will be more ideal. Construction activities permitted under a foreign-owned construction company are general construction works for civil engineering and building, and construction design activities.
How Cekindo can Assist with Construction Company Setup in Vietnam
Starting a construction company in Vietnam can be time-consuming and even daunting. There are dozens of things and regulations you need to get yourself familiar with before you can have a successful company formation.
That is why you will need Cekindo to know exactly what your requirements are because a wrong setup from the beginning can be financially painful.
As a team of legal professionals, business experts, and entrepreneurs, Cekindo brings years of experience and is ready to share it with you.
We are official partners of many major enterprises and large corporates in Vietnam. We also have valuable contacts with important organisations, governmental departments, and networks that will help grow your construction company in Vietnam faster.
Complete the form below to discuss your plan to penetrate the construction market in Vietnam with us.