In the course of project implementation, investors may need to change implementation partners such as contractors, consultants, or project management units due to operational, technical, or commercial reasons. However, Vietnamese law does not provide specific provisions directly governing the right or conditions for changing project implementation partners. Instead, such changes must be assessed based on general legal principles, contractual arrangements, and regulations on investment adjustment. This document analyzes the relevant legal framework, conditions, procedures, and potential legal implications associated with an investor’s request to change implementation partners.
1. What conditions must an investor satisfy to change an implementation partner?
Currently, Vietnamese law does not directly stipulate specific conditions under which an investor is entitled to change a project implementation partner (such as a construction contractor, consultant, or management entity). Therefore, such changes must be based on general legal and practical principles to ensure that the project continues to operate effectively and that the legitimate rights and interests of all parties are protected.
- The project has not been terminated: The change of an implementation partner may only be carried out if the project is still in operation and does not fall under cases of contract termination as prescribed in Article 422 of the Civil Code 2015 (such as completion of contractual obligations, contract cancellation, or impossibility of performance).
- The new partner satisfies implementation capacity requirements: The investor must select a new partner with adequate technical expertise and financial capacity suitable for the project’s requirements, ensuring the ability to fully perform contractual rights and obligations. For projects in specialized sectors (e.g., construction, energy, natural resource exploitation), the new partner must also satisfy sector-specific licensing and qualification requirements under applicable laws.
- Compliance with land law and sector-specific regulations (if any): Where the project involves land use rights or specialized permits, the change of partner must comply with legal procedures relating to the transfer or assumption of project-related rights and obligations.
- Completion of transfer procedures: The change of partner must be properly documented through legally valid instruments, such as a contract addendum or a new contract, to formally transfer rights and obligations from the former partner to the new one, thereby ensuring legal validity and preventing disputes.
Accordingly, an investor seeking to change an implementation partner must ensure that the project has not been terminated, the new partner has sufficient capacity, sector-specific legal requirements are complied with, and transfer procedures are properly documented in writing. If these conditions are satisfied, the change will be recognized by law, protecting the interests of all parties and minimizing legal risks.
2. How does the law regulate an investor’s right to change an implementation partner?
Current legislation does not expressly regulate an investor’s right to change a project implementation partner. Therefore, such a right primarily depends on contractual agreements, the nature of the project, and legal provisions governing contract amendment and transfer of rights and obligations.
- Based on contractual provisions: An investor may change an implementation partner if the project contract allows for amendment, supplementation, or transfer of implementation rights in response to changing circumstances.
- Based on the project stage: Where a project has been partially completed or has entered the operation phase, the contract may permit the assignment of implementation responsibilities to a new partner.
- Based on agreements among the parties: The change of partner may also be effected through a contract addendum or a new agreement entered into by the relevant parties.
- Supplementary legal basis: Provisions of the Civil Code 2015 on the transfer of rights and obligations provide a legal basis for contractual adjustments, allowing for partner changes within the limits permitted by law.
Accordingly, an investor’s right to change an implementation partner must be grounded in contractual agreements and mutual consent among the parties, while ensuring compliance with applicable laws and avoiding legal risks.
3. Is an investor required to obtain opinions or approval from competent authorities before changing an implementation partner?
In practice, although the law does not directly regulate the change of implementation partners (such as construction contractors or consultants), such changes may fall within cases involving adjustments to an investment project that has already received an investment policy approval. Therefore, it is necessary to determine whether approval from the competent project management authority is required.
Pursuant to Clause 3, Article 41 of the Law on Investment 2020, an investor must carry out procedures for approval of adjustment to the investment policy in cases involving:
- Changes to project objectives or addition of new project objectives;
- Changes in land use area exceeding 10% or more than 30 hectares, or changes to the investment location;
- Changes to total investment capital of 20% or more, resulting in changes to project scale;
- Extension of the project implementation schedule by more than 12 months compared to the approved schedule;
- Adjustment of the project’s operational duration;
- Changes to technology that has been appraised during the investment policy approval process;
- Changes to investors concurrently with investor approval prior to project exploitation or operation, or changes to investor-related conditions (if any).
In summary, a change of implementation partner may be carried out directly only if it does not affect the core elements of the project that have been approved. If the change affects the project’s schedule, technology, scale, objectives, or other approved contents under the Law on Investment 2020, the investor is required to obtain prior approval from the competent authority before implementation.
4. What legal procedures must an investor follow to lawfully change an implementation partner?
Although there is no direct statutory provision governing the change of implementation partners, where such a change affects an approved investment project or material contracts, the investor must follow appropriate legal procedures to ensure legality and mitigate dispute risks.
The required steps include:
- Assessing the impact of the partner change: Determining whether the change affects the project’s objectives, schedule, scale, total investment capital, or technology.
If so, the change may fall within the scope requiring approval of investment policy adjustment under Clause 3, Article 41 of the Law on Investment 2020. - Reviewing the existing contract with the former partner:
- Identifying provisions on contract termination and rights and obligations relating to partner changes;
- Negotiating or carrying out contract termination procedures if necessary, ensuring compliance with contractual terms and applicable laws.
- Preparing a dossier proposing the change of implementation partner:
- Drafting a written proposal specifying the reasons for the change, details of the new partner, expected effectiveness, and impact on the project;
- Attaching relevant documents such as the contract with the new partner, evidence of capacity and experience, and project implementation commitments.
- Obtaining opinions or approval from competent authorities: If the change affects an approved project, submitting the dossier to the project management authority or competent state authority for approval of adjustment.
- Executing a contract with the new partner: Entering into a contract with the new partner based on agreed terms, ensuring clear legal binding, defined responsibilities, and risk allocation.
- Updating and retaining project documentation: Updating project management files, contracts, and approval documents for inspection, audit, or future dispute resolution.
Full compliance with the above steps enables investors to lawfully change implementation partners, minimize legal risks, and ensure that the project continues to be implemented in accordance with approved schedules and quality standards.
In conclusion, although Vietnamese law does not expressly regulate the change of project implementation partners, such changes are legally permissible provided they are based on contractual agreements, comply with investment and sector-specific regulations, and do not materially affect approved project contents without prior approval. Investors should carefully assess legal impacts, complete necessary procedures, and properly document the transfer of rights and obligations to ensure legal compliance, safeguard their interests, and maintain project continuity and stability.
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Dinh Phuong Thao