In the context of increasingly deep international economic integration, a growing number of foreign companies are showing interest in and participating in bidding projects in Vietnam. The opening of the bidding market not only creates additional opportunities to attract capital, technology, and international experience, but also imposes strict requirements on compliance with legal regulations on bidding, investment, and taxation applicable to foreign contractors.
I. Current Situation of Foreign Companies Participating in Bidding
In recent years, the participation of foreign companies in bidding activities in Vietnam has increased significantly, particularly in sectors requiring high levels of technology, technical expertise, and capital, such as infrastructure construction, information technology, renewable energy, and healthcare. The presence of foreign contractors contributes to enhancing competition, improving project quality, and enabling Vietnam to access international standards. However, this process also gives rise to various legal and practical issues that require careful consideration.
Vietnamese law permits foreign contractors to participate in domestic bidding, subject to the satisfaction of certain conditions, notably requirements relating to capacity and experience, as well as the completion of procedures for lawful registration of operations. In practice, however, not all contractors fully comply with these requirements, resulting in situations where certain foreign companies participate in bidding without having registered their operations in Vietnam or without satisfying the conditions for eligible bidder status.
Another notable issue is the disparity in technology and financial capacity between foreign contractors and domestic contractors, which creates an uneven competitive environment. Although current legislation provides certain preferential or protective mechanisms for Vietnamese contractors, in many large-scale bidding packages, foreign contractors still hold a competitive advantage due to their international experience and strong financial resources.
In addition, the management of foreign contractors faces challenges in terms of coordination among tax authorities, construction authorities, and investment authorities. In some cases, foreign contractors, after being awarded contracts, fail to comply with regulations on tax declaration, labor contracts, or technology transfer, leading to risks of budget revenue losses and potential impacts on project quality.
Overall, the current situation of foreign companies participating in bidding in Vietnam demonstrates a growing trend and positive impacts on the market, while simultaneously requiring stricter management, enhancement of domestic contractors’ competitiveness, and strengthened supervision of legal compliance by foreign contractors.
II. What Is a Foreign Company Participating in Bidding?
In the context of increasingly deep international economic integration, bidding activities in Vietnam not only attract domestic enterprises but are also open to many foreign companies seeking to invest or supply goods and services. Foreign Company Participating in Bidding is understood as the process whereby enterprises with foreign legal entity status submit bid dossiers to compete for and implement bidding packages in Vietnam in accordance with the law. This is an important legal and economic activity that promotes competition, improves project quality, and facilitates Vietnam’s access to advanced technologies, techniques, and management practices.
1. Importance of Foreign Companies Participating in Bidding
The participation of foreign companies in bidding activities in Vietnam plays an important role in economic development and in improving project management quality. First, foreign contractors increase competition in contractor selection, limit situations of “monopoly” or “collusive bidding,” thereby contributing to the assurance of the principles of competition, fairness, and transparency as stipulated in Article 6 of the Law on Bidding 2023 (as supplemented by point c, clause 3, Article 4 of the Law Amending the Law on Planning, the Law on Investment, the Law on Investment in the Form of Public–Private Partnership, and the Law on Bidding 2024). Expanding the scope of participation also enables authorities and investors to have more choices with higher technical, financial, and technological capacity.
Moreover, the presence of foreign contractors promotes technology transfer and enhances domestic project management capabilities. Many foreign companies bring experience in implementing large-scale projects and modern management processes, aligning with the State’s policy on attracting international resources under the framework of economic integration. This is consistent with the spirit of the Law on Investment 2020, particularly provisions encouraging investment in sectors with positive impacts on infrastructure development and science and technology.
In addition, bidding activities involving foreign contractors create incentives for domestic enterprises to improve their capabilities through cooperation or healthy competition. The requirement to comply with international standards on quality, schedule, and safety constitutes positive pressure, contributing to the sustainable development of Vietnam’s construction, goods supply, and service markets.
Accordingly, foreign companies participating in bidding are not only an inevitable trend of integration but also play a significant role in improving Vietnam’s bidding environment and enhancing the efficiency of the use of state capital, ODA capital, and private investment capital in accordance with current legal orientations.
2. What Conditions Must Foreign Companies Meet to Participate in Bidding under Vietnamese Law?
To be eligible to participate in bidding in Vietnam, foreign companies must fully satisfy the conditions prescribed by law to ensure transparency, capacity, and compliance with obligations to the State. First, pursuant to Article 5 of the Law on Bidding 2023 (as amended by clause 2, Article 4 of the Law on Planning, the Law on Investment, the Law on Investment in the Form of Public–Private Partnership, and the Law on Bidding 2024), foreign contractors are only permitted to participate in bidding when they have eligible bidder status, including: lawful registration of operations in the country of establishment, not being subject to any prohibition on participation in bidding activities, and ensuring legal and financial independence from consulting contractors or related entities within the same bidding package.
In addition to legal status, foreign contractors must demonstrate capacity and experience in accordance with point c, clause 1, Article 8 of the Law on Bidding 2023. Failure to demonstrate capacity and experience as required also constitutes a prohibited act under point c, clause 2, Article 16 of the Law on Bidding 2023. Such requirements include financial capacity, experience in implementing similar projects, and the ability to meet the technical requirements of the bidding package. For construction or highly specialized technical service packages, these requirements are imposed even more strictly to ensure safety, quality, and project implementation progress.
Notably, pursuant to Article 68 of the Law on Bidding 2023, a foreign contractor awarded a contract must carry out procedures for registration of operations in Vietnam, open a bank account at a domestic bank, and comply with tax regulations under the Law on Tax Administration. This is an important requirement to ensure effective management of financial obligations and legal responsibilities of foreign enterprises operating in Vietnam.
Thus, to be eligible to participate in bidding in Vietnam, a foreign company must not only possess lawful legal status but also fully satisfy requirements on capacity, experience, registration of operations, and compliance with specialized regulations. The imposition of these conditions helps ensure that only qualified contractors are allowed to enter the market, thereby enhancing the quality and effectiveness of domestic bidding projects.
III. Legal Regulations Applicable to Foreign Company Participating in Bidding
The activities of a Foreign Company Participating in Bidding in Vietnam are governed by various legal instruments aimed at ensuring transparency, competition, and conformity with the requirements of state management. These regulations not only determine the eligible status of foreign contractors but also impose obligations regarding registration of operations, capacity dossiers, technical conditions, and tax obligations in the performance of bidding packages.
1. Key Regulations Applicable to Foreign Companies Participating in Bidding
When participating in bidding activities in Vietnam, foreign companies must comply with a stringent system of legal regulations to ensure the transparency and effectiveness of the contractor selection process. First and foremost, the most important condition is the eligible status of the contractor, as stipulated in Article 5 of the Law on Bidding 2023 (as amended by Clause 2, Article 4 of the Law on Planning, the Law on Investment, the Law on Investment in the Form of Public–Private Partnership, and the Law on Bidding 2024). Accordingly, a foreign contractor must have lawful registration of operations in its country of establishment, must not be subject to any prohibition from participating in bidding activities, and must maintain legal and financial independence from the investor as well as from consulting parties involved in the same bidding package. This serves as the legal basis to ensure objectivity in the evaluation of bid dossiers.
Another important point to note is the requirement regarding capacity and experience, as provided in Point c, Clause 1, Article 8 of the Law on Bidding 2023. At the same time, failure to demonstrate capacity and experience as required is also a prohibited act under Point c, Clause 2, Article 16 of the Law on Bidding 2023. Foreign contractors must prove their financial capacity, experience in implementing similar projects, and technical capability to meet the requirements of the bidding package. These conditions aim to ensure that only contractors with genuine capacity are allowed to compete, thereby preventing delays in progress or failure to meet quality standards due to lack of experience.
In the event of being awarded a contract, a foreign contractor must comply with obligations to register its operations in Vietnam, open a bank account, and fulfill tax obligations in accordance with the law. These requirements are stipulated in Article 68 of the Law on Bidding 2023, thereby establishing a legal basis for competent authorities to supervise contract performance, particularly with respect to the management of the foreign contractor’s financial obligations.
In summary, foreign contractors participating in bidding activities in Vietnam must pay special attention to legal status, capacity and experience, obligations regarding registration of operations, tax responsibilities, and other relevant sector-specific regulations. A thorough understanding of these legal provisions enables foreign enterprises to participate in the market more smoothly, while also helping investors mitigate risks in the contractor selection and contract management process.
2. Violations Related to Foreign Companies Participating in Bidding
In the course of participating in bidding activities in Vietnam, foreign companies are required to strictly comply with legal regulations. However, in practice, various violations still occur, adversely affecting the transparency, competitiveness, and quality of bidding activities. One of the most common violations is the dishonest declaration of capacity, experience, or financial capability in bid dossiers. Such conduct violates the principles of honesty and competition set forth in Articles 5 and 6 of the Law on Bidding 2023, which clearly provide that the provision of false information constitutes fraud and may result in the cancellation of bidding results or prohibition from participating in bidding activities.
In addition, some foreign contractors engage in collusive bidding or enter into secret agreements with other contractors, thereby distorting the results of contractor selection. This conduct is strictly prohibited under Clause 3, Article 16 of the Law on Bidding 2023, and is subject to severe sanctions, including prohibition from participating in bidding activities for a period ranging from six (06) months to five (05) years in accordance with Article 87 of the Law on Bidding 2023 (as guided by Section 3, Chapter X of Decree No. 214/2025/NĐ-CP). Collusive bidding not only undermines competition but also increases the risk of loss and waste of investment capital, particularly in projects using state funds.
Another common violation involves failure to comply with obligations regarding registration of operations or tax obligations after being awarded a contract. Pursuant to Article 68 of the Law on Bidding 2023, foreign contractors awarded contracts are required to complete procedures for registration of operations, open bank accounts, and fully declare and pay taxes. Failure to fulfill these obligations may result in administrative sanctions under the Law on Tax Administration 2019 and may even lead to suspension of contract performance.
Furthermore, in construction bidding packages, foreign contractors may violate sector-specific regulations, such as operating without proper construction permits, employing unqualified labor, or failing to comply with construction safety requirements under Article 12 of the Law on Construction 2014. Such violations are subject to handling in accordance with the Law on Construction 2014 (as amended in 2020) and relevant decrees on administrative sanctions in the construction sector.
Accordingly, violations committed by foreign companies in bidding activities not only result in severe financial and reputational sanctions but may also directly affect their continued right to participate in the Vietnamese market. A clear understanding of legal obligations and strict compliance with applicable regulations are key factors in minimizing risks and ensuring that bidding activities are conducted in a transparent and effective manner.
IV. Responses to Frequently Asked Questions Regarding Foreign Companies Participating in Bidding
The participation of foreign companies in bidding activities in Vietnam often gives rise to numerous questions concerning conditions, procedures, rights, and legal obligations. Due to differences in legal systems, regulatory frameworks, and business environments among countries, foreign enterprises may encounter difficulties when entering the Vietnamese bidding market.
1. How Are the Rights and Obligations of Foreign Companies Participating in Bidding Regulated?
When participating in bidding activities in Vietnam, foreign companies are protected by law in terms of their rights, while also being required to fully perform their obligations in order to ensure transparency, fairness, and efficiency in the contractor selection process.
With respect to the rights of foreign companies, pursuant to Articles 5 and 6 of the Law on Bidding 2023, foreign enterprises are entitled to: participate in domestic bidding packages upon satisfying all conditions regarding legal status, capacity, and experience; access information on bidding packages in a public and transparent manner; and respond to, lodge complaints about, or request clarification of matters relating to bidding dossiers and contractor selection results. These rights aim to ensure healthy competition and equal treatment between foreign and domestic contractors.
Regarding obligations, pursuant to Article 68 of the Law on Bidding 2023, foreign companies are required to provide truthful information in bid dossiers and to demonstrate capacity, experience, and financial capability in accordance with the requirements of the bidding package. After being awarded a contract, foreign contractors must also carry out procedures for registration of operations in Vietnam, open bank accounts at domestic banks, and fully declare and pay taxes in accordance with the Law on Tax Administration 2019. In addition, where participating in construction bidding packages, contractors must comply with regulations on construction operation permits, technical standards, and occupational safety under Article 12 of the Law on Construction 2014 (as amended in 2020).
The full exercise of these rights and fulfillment of these obligations not only helps foreign enterprises protect their lawful interests but also ensures that projects are implemented in accordance with schedules, quality requirements, and Vietnamese law. Conversely, violations of obligations may result in cancellation of bidding results, administrative sanctions, tax arrears recovery, or prohibition from participating in bidding activities for a specified period.
Based on the foregoing analysis, the rights and obligations of Foreign Company Participating in Bidding are clearly regulated in order to balance the interests of foreign contractors, domestic contractors, and investors, while ensuring a transparent, fair, and effective bidding environment.
2. What Risks Should a Foreign Company Participating in Bidding Take into Account?
Bidding activities in Vietnam offer numerous opportunities for a Foreign Company Participating in Bidding; however, they also entail various legal, financial, and technical risks that enterprises must clearly understand in order to mitigate potential losses.
Legal risks related to eligibility and bid dossiers.
Pursuant to Articles 5 and 39 of the Law on Bidding 2023, foreign contractors must fully satisfy the conditions regarding legal status, capacity, experience, and financial capability. If bid dossiers are incomplete, contain inaccurate information, or involve false or dishonest declarations, enterprises face the risk of cancellation of bidding results and prohibition from participating in bidding activities for a period ranging from six (06) months to five (05) years in accordance with Article 87 of the Law on Bidding 2023 (as guided by Section 3, Chapter X of Decree No. 214/2025/NĐ-CP). This constitutes a direct legal risk that may adversely affect the enterprise’s ability to participate in the market in the future.
Financial and tax risks.
Upon being awarded a contract, foreign contractors are required to register their operations, declare and pay taxes in accordance with the Law on Tax Administration 2019 and Article 68 of the Law on Bidding 2023. Non-compliance may result in administrative sanctions, tax arrears recovery, and late-payment interest, thereby creating significant financial pressure and affecting cash flow and project implementation capacity.
Risks related to compliance with sector-specific regulations, particularly with respect to construction bidding packages or the provision of technical services. Pursuant to Article 12 of the Law on Construction 2014 (as amended in 2020), foreign contractors must obtain appropriate practicing licenses, meet technical standards, and ensure occupational safety. Violations of these regulations may lead to suspension of construction, administrative penalties, or revocation of bidding participation rights.
Risks related to project progress and quality arising from insufficient understanding of the legal environment, business culture, and administrative procedures in Vietnam. Many foreign companies encounter difficulties in coordinating with subcontractors, regulatory authorities, and clients, resulting in delays or contractual disputes. These risks are indirectly governed through provisions of the Law on Bidding 2013 and the Civil Code 2015 regarding civil and commercial contracts.
In summary, a Foreign Company Participating in Bidding should pay close attention to legal, tax, sector-specific, and project progress–quality risks. Adequate awareness and thorough preparation prior to participation in bidding activities will help enterprises protect their lawful interests, minimize financial losses, and enhance the effectiveness of project implementation in Vietnam.
3. What Is the Registration Procedure for a Foreign Company Participating in Bidding?
To participate in bidding activities in Vietnam, a foreign company must comply with a stringent registration procedure to ensure full satisfaction of legal conditions and bidding package requirements. A clear understanding of this procedure enables enterprises to proactively prepare dossiers and minimize the risk of disqualification or project delays.
Pursuant to Article 5 of the Law on Bidding 2023, a foreign company must ensure its lawful status. This includes demonstrating that it is a legally established enterprise in its home country, is not subject to any prohibition from participating in bidding activities, and possesses adequate financial and technical capacity to perform the bidding package. This constitutes the fundamental step in determining the foreign contractor’s eligibility to participate in bidding.
The foreign company must submit a bid dossier in accordance with the requirements of the bidding package. Such dossier includes: business registration certificates or documents evidencing legal entity status, capacity and experience profiles, financial statements, professional qualification certificates, and other relevant documents as stipulated in Article 39 of the Law on Bidding 2013. The dossier must be translated into Vietnamese and duly legalized for acceptance by Vietnamese authorities.
The foreign contractor must open a domestic bank account pursuant to Article 68 of the Law on Bidding 2023, fully declare and pay taxes in accordance with the Law on Tax Administration 2019, and complete other relevant administrative procedures in order to be permitted to implement the contract in Vietnam.
Finally, the foreign contractor must comply with sector-specific regulations applicable to the bidding package, particularly for construction projects or technical service provision. Pursuant to Article 12 of the Law on Construction 2014 (as amended in 2020), enterprises must obtain construction operation permits, comply with technical standards, and adhere to occupational safety regulations.
Accordingly, the registration procedure for a Foreign Company Participating in Bidding comprises four fundamental steps: ensuring lawful status and capacity; preparing a complete bid dossier; registering operations and fulfilling tax obligations after being awarded the contract; and complying with relevant sector-specific regulations. Proper implementation of these steps enables foreign contractors to participate in the Vietnamese market lawfully and effectively while minimizing legal risks.
4. What Forms of Bidding May a Foreign Company Participating in Bidding Choose?
When participating in bidding activities in Vietnam, foreign companies may choose among various forms of bidding depending on the scale and nature of the bidding package as well as legal requirements. A clear understanding of these forms assists enterprises in preparing appropriate dossiers, increasing the likelihood of success, and ensuring legal compliance.
Pursuant to Clause 1, Article 20 of the Law on Bidding 2023 (as amended by Clause 12, Article 1 of the Law amending the Law on Bidding; the Law on Investment in the Form of Public–Private Partnership; the Law on Customs; the Law on Value-Added Tax; the Law on Export and Import Duties; the Law on Investment; the Law on Public Investment; and the Law on Management and Use of Public Assets 2025), forms of contractor selection include open bidding, limited bidding, direct appointment of contractors, competitive quotation, direct procurement, and self-performance. Among these, open bidding is the most common form, allowing any contractor that satisfies bidding conditions to submit a bid dossier, thereby creating a transparent competitive environment in accordance with the principles of competition, fairness, and transparency stipulated in Article 6 of the Law on Bidding 2023.
For specialized projects or where the number of qualified contractors is limited, limited bidding is an appropriate form. Pursuant to Article 22 of the Law on Bidding 2023, only invited contractors may submit bid dossiers, thereby reducing risks related to capacity and ensuring project progress and quality. Foreign contractors with international experience are often invited to participate in this form, particularly for projects involving advanced technology or large investment capital.
In addition, competitive quotation is applied to small-scale, low-value bidding packages, allowing contractor selection through direct quotation requests. This form is stipulated in Article 26 of the Law on Bidding 2023 and is suitable for foreign enterprises seeking to participate in small- and medium-scale projects.
In certain special cases, direct appointment of contractors may be applied pursuant to Article 23 of the Law on Bidding 2023 (as amended by Clause 14, Article 1 of the Law amending the Law on Bidding; the Law on Investment in the Form of Public–Private Partnership; the Law on Customs; the Law on Value-Added Tax; the Law on Export and Import Duties; the Law on Investment; the Law on Public Investment; and the Law on Management and Use of Public Assets 2025), for example, where only one contractor meets technical requirements or where project implementation is urgent. However, this form is rarely applied to foreign contractors due to its specific requirements and the need for approval by competent authorities.
In summary, a Foreign Company participating in bidding in Vietnam may choose among open bidding, limited bidding, competitive quotation, or direct appointment of contractors, depending on the characteristics of the bidding package. A thorough understanding of the legal framework and appropriate selection of bidding forms will help enterprises optimize their chances of success while ensuring compliance with Vietnamese law.
5. Are There Any Restrictions on the Fields of Operation for Foreign Companies Participating in Bidding?
Although Vietnamese law opens the bidding market to foreign contractors, certain restrictions on fields of operation still apply in order to ensure national security, domestic priority policies, and management of specialized sectors.
Pursuant to Article 5 of the Law on Bidding 2013, foreign contractors may participate in bidding activities only when fully satisfying conditions regarding legal status, capacity, and experience. However, bidding packages relating to sectors involving national security or defense, or projects prioritized for domestic contractors, may impose restrictions on the participation of foreign contractors.
In addition, Article 9 of the Law on Investment 2020 and its appendices stipulate sectors prohibited or restricted for foreign investors, such as certain activities related to land use, postal and telecommunications services, media, and banking. When participating in bidding packages within these sectors, foreign companies must pay special attention to specific conditions, including joint venture requirements, limitations on capital contribution ratios, or specialized licensing requirements.
Accordingly, foreign companies participating in bidding activities in Vietnam are not absolutely prohibited, but are subject to certain restrictions on fields of operation, particularly in sectors related to national security and defense, key state-funded projects, or sectors restricted under the Law on Investment 2020 and the Law on Bidding 2013.
V. Do You Need Legal Expertise to Support a Foreign Company Participating in Bidding?
If you require legal advice on issues related to participation in bidding activities in Vietnam, please contact Ngọc Phú Law Company Limited for prompt and dedicated consultation. The above information is for reference purposes only. For detailed advice tailored to specific cases, please contact NPLaw Firm for immediate professional support.
