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Vietnam has become one of the most attractive destinations for Chinese investment, particularly in industrial parks, factories, infrastructure projects, and EPC construction works. While market opportunities are significant, construction projects in Vietnam also carry high legal and operational risk—especially at the contract stage.
For Chinese investors, many disputes do not arise from bad faith, but from misunderstanding Vietnamese law, local practice, and enforcement realities. Once a dispute occurs, correcting contractual mistakes becomes expensive and time-consuming.
Understanding what to watch for before signing a construction contract is therefore essential.
Unlike simple commercial contracts, construction contracts in Vietnam are governed by a combination of:
Civil law
Construction law
Tendering and project regulations
Technical standards and licensing rules
Foreign investors often underestimate how mandatory regulations interact with contract freedom. Even if both parties agree contractually, certain clauses may be unenforceable if they contradict Vietnamese law.
Early legal review ensures the contract aligns with both commercial intent and legal requirements.
One of the most common risks for Chinese investors is signing contracts with unqualified or improperly licensed contractors.
Key issues include:
Whether the Vietnamese contractor holds the correct construction license
Whether the license scope matches the project type
Whether subcontracting is legally permitted
If the contractor lacks proper licensing, the contract may be unenforceable—or worse, the project may be suspended by authorities.
Verifying legal capacity before signing is critical.
Construction disputes often arise from vague or incomplete descriptions of work scope.
Common problems include:
Unclear division between main contractor and subcontractors
Missing technical standards
Ambiguous responsibility for materials or equipment
Informal changes during execution
Vietnamese courts and arbitral tribunals rely heavily on written contractual terms, not assumed industry practice. A poorly defined scope creates serious enforcement risk.
Payment disputes are among the most frequent construction conflicts in Vietnam.
Chinese investors should pay close attention to:
Clear payment milestones linked to verifiable progress
Retention and release conditions
Payment currency and method
Consequences of delayed or disputed payments
Improper payment structures often trigger disputes that halt projects and escalate costs.
Delays are common in construction projects—but how delays are handled legally matters.
Contracts should clearly address:
Completion deadlines
Extensions of time
Liquidated damages for delay
Circumstances excusing delay
Without clear rules, delay disputes become subjective and difficult to resolve.
In Vietnam, many construction disputes arise not from original contract terms, but from variations during execution.
Chinese investors should ensure that:
Variation procedures are clearly defined
Approval authority is specified
Cost and time impact are documented
Informal approvals or verbal instructions often lead to disputes that are difficult to prove later.
Security mechanisms play a key role in protecting investors.
Important considerations include:
Performance bonds issued by acceptable banks
Advance payment guarantees
Conditions for calling guarantees
Many investors only realize the importance of these tools after disputes arise—when it is already too late.
Choosing dispute resolution mechanisms should never be an afterthought.
Chinese investors must consider:
Whether Vietnamese law or foreign law applies
Whether disputes are resolved by arbitration or court
Where awards or judgments can be enforced
A favorable decision that cannot be enforced has little commercial value.
Vietnamese authorities and courts operate in Vietnamese.
If contracts are bilingual:
The prevailing language must be specified
Translation accuracy must be ensured
Disputes often arise when legal meaning changes between languages. Poor translation can undermine otherwise strong legal positions.
Improper termination is a common and costly mistake.
Contracts should clearly specify:
Grounds for termination
Required notice procedures
Consequences of termination
Terminating incorrectly can expose the investor to counterclaims—even if the contractor is at fault.
Chinese investors often focus on winning disputes rather than enforcing outcomes.
Before signing, it is important to assess:
Whether the contractor has enforceable assets
Whether guarantees can be enforced in Vietnam
Whether arbitration awards will be recognized
Enforcement planning should start at the contract stage, not after disputes arise.
In practice, disputes often occur because:
Contracts are based on foreign templates without localization
Legal review is skipped to save time
Risk allocation is unclear
Ongoing legal monitoring is absent
These issues are preventable with proper legal involvement.
Many investors engage lawyers only at contract signing.
However, construction projects evolve over time. Without continuous legal support:
Variations go undocumented
Payment risks increase
Termination decisions become risky
Construction projects require ongoing legal oversight, not just initial review.
With ongoing legal consultancy, Chinese investors can:
Review and negotiate construction contracts safely
Monitor compliance throughout project execution
Address risks before disputes escalate
Decide strategically when to negotiate or litigate
This proactive approach significantly reduces dispute costs and project disruption.
DEDICA provides ongoing legal consultancy services for Chinese investors and EPC contractors involved in construction projects in Vietnam.
DEDICA assists clients by:
Reviewing and negotiating construction and EPC contracts
Verifying contractor licensing and compliance
Advising on payment, delay, and variation risks
Supporting dispute prevention and resolution
Representing clients in arbitration and Vietnamese courts
DEDICA’s approach focuses on risk control, enforceability, and long-term project success, not reactive dispute handling.
For Chinese investors, signing a construction contract in Vietnam is not just a commercial decision—it is a legal risk management exercise.
Most construction disputes arise from issues that could have been prevented at the contract stage. By paying attention to licensing, scope, payment, delay, dispute resolution, and enforcement from the beginning, investors can significantly reduce risk.
Engaging ongoing legal consultancy ensures that legal protection continues throughout the project—not only when problems arise.
📞 Hotline: (+84) 39 969 0012 (Available via WhatsApp, WeChat, Zalo)
🕒 Working Hours: Monday – Friday (8:30 – 18:00)
Contact us today for a free initial consultation with our experienced lawyers!
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