Vietnam’s real estate market is increasingly booming due to strong FDI inflows, leading to more and more investors in the field of architecture participating in the market. In this article, we will provide an overview of investment and business conditions when operating in the architecture industry in Vietnam for foreign investors.
1. Scope of operation
According to Vietnamese law, architectural services include the type of business that organizes the design and verification of construction designs, however, the content of architectural services activities under the Law of Vietnam is not the same as the content in the United Nations Central Reflection Classification (CPC), which can be seen as follows:
Regulations of Vietnamese Law
|Architectural services include:
||Architectural Services (CPC 8671), including:
One of the typical differences of architectural activities is that according to CPC, architectural services do not include “Interior design” services, therefore, for this activity, Vietnam has not yet committed to opening up to foreign investors or in other words, Vietnam reserves the right to allow foreign investors to operate in this field. Therefore, when registering for the “interior design” services, investors must get approval from specialized Ministries.
2. Market access conditions
Currently, Vietnam has joined many trade agreements on investment cooperation, among which are popular such as:
- For WTO commitments, Vietnam has allowed foreign investors to invest in establishing a company or purchase capital contribution at the rate of 100%, however, the investor is required to be a legal entity.
- For the EVFTA, Vietnam has also allowed investors from the European Union to invest in setting up a company or to buy a capital contribution at the rate of 100% and does not require the investor to be a legal entity, which creates favorable conditions for individual European investors to participate in this field in Vietnam.
3. Regulations of Vietnamese Law
Architectural services are conditional business activities under Vietnamese law (103), in case the investor establishes a company in Vietnam to provide architectural services, the investor needs to ensure that the following conditions are met:
Operating conditions of an architectural company
- Established in accordance with Vietnamese law; and
- Having a person in charge of architectural expertise or in charge of architectural design having an architectural practice certificate; and
- To notify information to the specialized agency on architecture under the People’s Committee of the province where the architectural practice organization is headquartered.
Conditions for individuals working at architectural practice organizations
- Individuals holding the title of architect in charge of architectural design, individuals in charge of architectural expertise in architectural practice organizations, and architects practicing as an individual must have an architectural practice certificate.
- Individuals without an architectural practice certificate may participate in performing architectural services in an architectural practice organization or cooperate with a practicing architect as an individual.
Conditions for foreigners to practice architecture in Vietnam:
Vietnamese law allows foreigners to practice architecture in Vietnam, according to which the following conditions must be met:
- Having a certificate of architectural practice in Vietnam; or
- Having a valid architectural practice certificate issued by a competent foreign agency or organization, recognized and converted by Vietnam; and
- Comply with the laws of Vietnam and the Code of Professional Conduct of practicing architects in Vietnam.
It should be noted that the time for foreigners to participate in architectural services in Vietnam is calculated according to legal documents on residence or work permits and labor contracts issued by competent authorities of Vietnam.
Steps to set up an architectural company
For architectural activities, setting up a business in Vietnam will normally go through the following steps:
Step 1. Apply for an investment registration certificate
Step 2. Apply for an enterprise registration certificate
Step 3. Announce the specialized agency on architecture under the People’s Committee of the province where the architectural practice organization is headquartered
Points to note
- Architectural companies must purchase professional liability insurance.
- Have intellectual property rights protected in accordance with the law on intellectual property.
- Have the right to refuse to comply with the investor’s illegal requests, requests outside the architectural design tasks and contracts, requests to change architectural designs that do not conform to technical standards and regulations.
- Have the right to refuse the acceptance of works or work items that do not conform to the approved architectural designs.
- Take responsibility for the quality of work under the signed contract, pay compensation for damage in accordance with the law when using information, documents, standards, technical regulations, technical solutions, organization improper management or breach of contract causing damage.