In accordance with the Decree No. 37/2015/ND-CP dated April 22, 2015 of the Government prescribing in detail construction contracts, within that, the level of advance payment must not exceed 50% of the contract value.
In special cases, this level shall be permitted by the competent investment decider, or by the ministers, chairpersons of provincial-level People’s Committees; chairpersons of the Members’ Councils or of the Boards of Directors of groups or corporations in case the competent investment decider is the Prime Minister. The minimum level of advance payments for consultancy contracts are 15% and 20% of the contract price for a contract valued at over VND 10 billion and up to VND 10 billion. Similarly, the minimum level of advance payments for construction implementation contracts are 10%; 15% and 20% of the contract price for a contract valued at over VND 50 billion; between VND 10 and 50 billion and under VND 10 billion
The advanced amount to be gradually recovered via payments and the amount recovered upon each payment shall be agreed by the two parties in the contract, ensuring that the advanced amount is fully recovered when 80% of the signed contract price is paid.
On advance payment guarantee, the Decree prescribes that for a construction contract with an advance payment value exceeding one billion Vietnam dong, before the principal makes the advance payment, the contractor shall pay to the principal an advance payment guarantee with a value and currency equivalent to the advanced amount. Advance payment guarantee is not compulsory for construction contracts with an advance payment value of up to one billion Vietnam dong, and for construction contracts in the form of self-performance including contracts performed by the community under target programs.
This Decree takes effect on June 15, 2015.
Source: luatvietnam.vn
