Vietnam\u2019s construction market is entering a new phase. With the issuance of Decree No. 210\/2026\/ND-CP on 15 June 2026, effective from 1 July 2026, the Government has introduced detailed guidance on construction contracts under the 2025 Construction Law.
\nFor foreign investors, developers, lenders, EPC contractors and infrastructure sponsors, this is more than a technical legal update. Decree 210 modernizes Vietnam\u2019s construction contract framework and moves it closer to international project practice, including concepts familiar from FIDIC-style contracting. At the same time, it imposes stricter discipline on payment, notices, contract administration, performance security, suspension, termination, dispute management and bilingual contract drafting.
\nThe message for foreign investors is clear: Vietnam is becoming more sophisticated, but also less forgiving of poor contract management.<\/p>\n
Why Decree 210 Matters for Foreign Investors
\nVietnam continues to require major investment in industrial parks, logistics, data centres, energy infrastructure, transport, real estate, manufacturing facilities, urban development and public-private partnership projects.
\nIn this environment, construction contract risk is often one of the largest project risks. Delayed payments, unclear variation procedures, weak documentation, vague termination rights and inconsistent bilingual contract interpretation can quickly become value-destructive.
\nDecree 210 is therefore important because it provides a more structured legal framework for:
\n\u2022\tpayment procedures;
\n\u2022\tadvance payments;
\n\u2022\tperformance guarantees;
\n\u2022\tsuspension and termination rights;
\n\u2022\tforeign currency adjustment;
\n\u2022\tdispute resolution mechanisms;
\n\u2022\tcontract administration; and
\n\u2022\tbilingual contract interpretation.
\nFor foreign investors, the opportunity is significant. But success will depend on whether contracts and project management systems are updated immediately.<\/p>\n
Key Changes Foreign Investors Should Understand
\n1. Clearer Suspension and Termination Rights
\nOne of the most important improvements is greater clarity on suspension and termination.
\nUnder Decree 210, contractors in public investment and PPP projects may suspend performance if the investor fails to pay the fully approved value of a payment phase within the prescribed period. The decree introduces clearer timelines and notice requirements.
\nTermination rights are also more clearly defined. Serious breaches, such as prolonged non-payment by the investor or arbitrary abandonment of work by the contractor, may give rise to unilateral termination rights.
\nThis is important for foreign contractors because payment delay has historically been one of the most sensitive risks in Vietnam construction projects. A clearer statutory framework allows parties to negotiate stronger contractual protections and manage default scenarios more professionally.<\/p>\n
2. Better Compatibility with International Contract Practice
\nDecree 210 moves Vietnam closer to international contracting practice.
\nIt recognizes concepts that are familiar to international contractors, developers and lenders, including structured notices, defined default periods, clearer payment milestones and dispute resolution mechanisms.
\nImportantly, Decree 210 also recognizes the use of dispute resolution panels in line with international practice. This is particularly relevant for large-scale infrastructure, industrial, energy and PPP projects where disputes should ideally be managed during project implementation rather than only after project failure.
\nFor foreign investors, this creates an opportunity to use more sophisticated contract administration tools, including dispute boards, escalation procedures and project-level dispute avoidance mechanisms.<\/p>\n
3. Payment Procedures Must Be Managed More Carefully
\nDecree 210 maintains strict rules on payment timing and payment dossiers. Investors and contractors should not treat payment as a purely commercial issue. It is now a contract administration issue requiring precise documentation.
\nForeign investors should ensure that every project has:
\n\u2022\ta clear payment schedule;
\n\u2022\tagreed payment dossier requirements;
\n\u2022\tinternal approval timelines;
\n\u2022\tclear responsibility for invoice review;
\n\u2022\ta dispute mechanism for disputed amounts; and
\n\u2022\tdocumentary evidence of approval, rejection or comments.
\nFor ODA-funded projects and projects financed by foreign commercial loans, payment timelines may follow the relevant international financing agreements. This is important because many major infrastructure and public projects in Vietnam rely on international financing structures.<\/p>\n
4. Advance Payments and Performance Guarantees Require Careful Structuring
\nDecree 210 refines the rules on advance payments and performance guarantees.
\nFor EPC, EC, EP, PC and turnkey contracts, the minimum advance payment is expressly recognized, while the maximum advance payment remains subject to statutory limits. Advance payments must also be recovered through progress payments and fully recovered before payment reaches the prescribed threshold.
\nPerformance guarantees for public investment and PPP projects are also standardized within a defined range, with higher guarantees subject to stricter approval.
\nForeign investors should review whether their standard forms comply with these requirements. This is particularly important for EPC and turnkey contracts, where front-loaded procurement, imported equipment and mobilization costs can be significant.<\/p>\n
5. Foreign Currency and Price Adjustment Clauses Must Be Updated
\nFor contracts where foreign currency payment is permitted, Decree 210 introduces more formalized mechanisms for exchange rate and price adjustment.
\nThis is highly relevant for foreign contractors importing equipment, technology, machinery or specialized materials. Currency movement can materially affect project economics.
\nForeign investors should ensure that contracts clearly address:
\n\u2022\tpermitted currency of payment;
\n\u2022\texchange rate source;
\n\u2022\ttiming of exchange rate determination;
\n\u2022\tprice adjustment formula;
\n\u2022\timported equipment cost changes;
\n\u2022\tinflation and escalation;
\n\u2022\ttax changes; and
\n\u2022\tresponsibility for currency risk.
\nA weak currency clause can undermine the economics of an otherwise attractive project.<\/p>\n
6. Bilingual Contracts Need Greater Care
\nThe 2025 Construction Law places greater importance on contract language.
\nWhere a contract is made in Vietnamese and a foreign language, the parties must clearly agree which language prevails. If the parties fail to do so, Vietnamese may prevail for interpretation and dispute resolution purposes.
\nThis is a critical point for foreign investors.
\nMany international investors rely heavily on English-language versions of contracts, technical schedules, FIDIC-based conditions, EPC annexes and lender documents. If the Vietnamese version is not carefully aligned with the English version, the investor may face serious interpretation risk.
\nThe practical rule is simple: do not treat the Vietnamese version as a formality.<\/p>\n
Investor Checklist: Must-Do Items for Foreign Investors in Vietnam\u2019s Construction Sector
\n1. Review All Standard Construction Contract Templates
\nForeign investors should immediately review:
\n\u2022\tEPC contracts;
\n\u2022\tdesign-build contracts;
\n\u2022\tconstruction contracts;
\n\u2022\tprocurement contracts;
\n\u2022\tturnkey contracts;
\n\u2022\tconsultancy contracts;
\n\u2022\tO&M-linked construction contracts;
\n\u2022\tPPP project contracts; and
\n\u2022\temployer\u2019s requirements and technical schedules.
\nThe review should confirm whether the contract reflects Decree 210 requirements on payment, notices, suspension, termination, advance payments, guarantees and dispute management.<\/p>\n
2. Align Vietnamese and English Contract Versions
\nEvery bilingual contract should clearly state:
\n\u2022\twhether Vietnamese or English prevails;
\n\u2022\twhether technical annexes follow the same language priority;
\n\u2022\thow inconsistencies are resolved;
\n\u2022\twhether FIDIC terms are accurately translated; and
\n\u2022\twhether key legal terms have consistent Vietnamese equivalents.
\nThis should be done before signing, not after a dispute arises.<\/p>\n
3. Build a Contract Administration Calendar
\nDecree 210 makes timelines important.
\nForeign investors should create a project-level calendar for:
\n\u2022\tpayment deadlines;
\n\u2022\tnotice periods;
\n\u2022\tsuspension rights;
\n\u2022\ttermination triggers;
\n\u2022\tadvance payment recovery;
\n\u2022\tperformance guarantee validity;
\n\u2022\twarranty commencement;
\n\u2022\tclaim notification periods;
\n\u2022\tdispute board procedures; and
\n\u2022\tapproval deadlines.
\nA good construction contract is only useful if the project team manages it properly.<\/p>\n
4. Strengthen Payment Dossier Controls
\nInvestors and contractors should agree early on what constitutes a valid payment dossier.
\nThe contract should specify:
\n\u2022\trequired documents;
\n\u2022\tapproval process;
\n\u2022\ttimeline for comments;
\n\u2022\tconsequences of incomplete submissions;
\n\u2022\ttreatment of disputed amounts;
\n\u2022\tpartial payment rules; and
\n\u2022\tdocumentary evidence of approval or rejection.
\nThis can prevent payment disputes from becoming suspension or termination disputes.<\/p>\n
5. Reassess Advance Payment and Guarantee Requirements
\nForeign investors should check whether:
\n\u2022\tthe advance payment complies with statutory limits;
\n\u2022\tthe recovery schedule is clear;
\n\u2022\tthe performance guarantee amount is lawful and commercially reasonable;
\n\u2022\tguarantee wording is bankable;
\n\u2022\tguarantee expiry dates match project milestones; and
\n\u2022\treturn conditions are clearly stated.
\nThis is particularly important for EPC, turnkey, infrastructure and PPP projects.<\/p>\n
6. Include a Dispute Avoidance Mechanism
\nFor major projects, investors should consider including:
\n\u2022\tsenior management escalation;
\n\u2022\texpert determination for technical issues;
\n\u2022\tdispute board procedures;
\n\u2022\tfast-track determination for payment disputes;
\n\u2022\tmediation before arbitration; and
\n\u2022\tarbitration clauses suitable for foreign-invested projects.
\nDispute boards can be especially useful where the project must continue while disagreements are resolved.<\/p>\n
7. Train the Project Team
\nLegal compliance cannot remain only with the legal department.
\nProject directors, contract managers, finance teams, engineers and site managers must understand:
\n\u2022\twhen notices must be issued;
\n\u2022\thow payment dossiers are reviewed;
\n\u2022\twhen claims are preserved;
\n\u2022\twhat events may trigger suspension;
\n\u2022\twhat conduct may amount to abandonment;
\n\u2022\thow variations should be documented; and
\n\u2022\thow evidence should be maintained.
\nIn Vietnam, many construction disputes are lost not because the legal position is weak, but because the project record is incomplete.<\/p>\n
8. Review Existing Projects Before 1 July 2026
\nInvestors should urgently review ongoing projects to identify:
\n\u2022\tcontracts signed under the old framework;
\n\u2022\tpending amendments;
\n\u2022\tpayment disputes;
\n\u2022\tdelayed approvals;
\n\u2022\tunresolved variations;
\n\u2022\texpiring guarantees;
\n\u2022\tbilingual inconsistencies;
\n\u2022\tongoing claims; and
\n\u2022\tprojects likely to be affected by the new rules.
\nEarly review is much cheaper than dispute resolution later.<\/p>\n
What This Means for Vietnam\u2019s Investment Climate
\nDecree 210 is a positive development for Vietnam\u2019s construction and infrastructure market. It supports a more predictable, transparent and internationally compatible contracting environment.
\nHowever, it also raises the standard of compliance. Foreign investors should not assume that general international templates will automatically work in Vietnam. FIDIC-style contracts, EPC forms and lender-driven documents must be carefully localized.
\nThe investors who benefit most will be those who combine international contracting discipline with Vietnam-specific legal implementation.<\/p>\n
Conclusion
\nVietnam remains one of Asia\u2019s most dynamic construction and infrastructure markets. Decree 210 strengthens the legal foundation for that growth by introducing clearer rules on contract management, payment, suspension, termination, guarantees, dispute resolution and bilingual contract interpretation.
\nFor foreign investors, the opportunity is clear: Vietnam is becoming more investable, but also more demanding.
\nThe key to success will be disciplined preparation.
\nForeign investors should update their contracts, train their project teams, strengthen payment and notice procedures, review bilingual documents and ensure that every major construction project has a Vietnam-specific legal and contract administration strategy.
\nThose who act early will be better positioned to avoid disputes, protect project value and participate successfully in Vietnam\u2019s next phase of infrastructure and industrial growth.<\/p>\n
Please do not hesitate to contact Dr. Oliver Massmann under omassmann@duanemorris.com if you have any questions or would like to discuss how Decree 210 may affect construction, infrastructure, EPC, PPP or real estate projects in Vietnam.
\nDr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC<\/p>\n","protected":false},"excerpt":{"rendered":"
Vietnam\u2019s construction market is entering a new phase. With the issuance of Decree No. 210\/2026\/ND-CP on 15 June 2026, effective from 1 July 2026, the Government has introduced detailed guidance on construction contracts under the 2025 Construction Law. For foreign investors, developers, lenders, EPC contractors and infrastructure sponsors, this is more than a technical legal … <\/p>\n
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