On December 10, 2025, the National Assembly passed the 2025 Law on Construction (as amended), replacing the 2014 Law on Construction. From an overall perspective, the 2025 Law on Construction is developed on the basis of selective inheritance, while significantly streamlining formalistic procedures, reducing overlaps with legislation on investment, housing, land, and PPP, and transferring many technical matters to be detailed by the Government. For investors, project developers, and construction contractors, the 2025 Law on Construction introduces many changes that directly affect the entire project implementation process, from pre-investment procedures, conditions for commencement of construction works, obligations to obtain construction permits, to the content and mechanisms for entering into and performing construction contracts. In general, while the new regulations aim to reduce administrative procedures and facilitate implementation, they also impose stricter obligations and enhance the responsibilities of individuals and enterprises in the course of their investment and construction activities.
Within the scope of this bulletin, ATA Legal Services (“ATA”) will focus on clarifying four key new points of the new Law on Construction that investors, project developers, and construction contractors should pay close attention to.
1. Not mandatory to prepare a Pre-Feasibility Study Report in all cases
The 2014 Law on Construction provided that nationally important projects, Group A projects using public investment capital; PPP projects in accordance with the law on investment under the public–private partnership model; projects subject to the authority of the National Assembly or the Prime Minister to approve investment policy under the Law on Investment; and power projects selecting investors through bidding in accordance with the Law on Electricity were required to both prepare and have appraised a pre-feasibility study report for construction investment and prepare and obtain approval of the investment policy under relevant laws. In substance, the pre-feasibility study report and the investment policy approval decision contain many overlapping contents and have similar legal value. Therefore, having to carry out two parallel procedures resulted in significant time and resource costs for investors.
The 2025 Law on Construction fundamentally changes this approach by stipulating the principle that a pre-feasibility study report is only required to be prepared and approved where relevant laws so require. In other cases, the decision on or approval of the investment policy may be carried out on the basis of an Investment Policy Proposal Report or a Project Proposal, without repeating the pre-feasibility study procedure.
2. Abolition of appraisal and approval of construction designs implemented after the basic design
The 2014 Law on Construction stipulated that designs implemented after the basic design include: overall technical design; technical design, construction drawing design, and other designs (if any) in accordance with international practice. Accordingly, the 2014 Law required investors to organize the appraisal of such designs (including overall technical design; technical design, construction drawing design, and other designs (if any) in accordance with international practice), regardless of project type or source of funding.
The 2025 Law on Construction no longer provides for the system of designs implemented after the basic design and abolishes the requirement for appraisal of construction designs at this stage. In addition, the 2025 Law on Construction also provides transitional provisions whereby construction works whose designs implemented after the basic design have already been appraised by competent construction authorities under the 2014 Law on Construction will not be required to re-carry out appraisal procedures with construction authorities when the designs are adjusted.
The abolition of this appraisal procedure helps investors save time by eliminating unnecessary procedures.
3. Significant expansion of cases eligible for exemption from construction permits
The 2025 Law on Construction inherits the provisions of the 2014 Law on Construction regarding cases exempted from construction permits for works that have already been controlled through other appraisal processes, but significantly expands the scope of application, specifically as follows:
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Construction works belonging to construction investment projects that have had their Feasibility Study Reports or adjusted Feasibility Study Reports appraised and approved by competent construction authorities are exempt from construction permits. Accordingly, instead of having to complete the appraisal of construction designs implemented after the basic design and satisfy conditions for construction permits as before, investors only need the Feasibility Study Report to be approved in order to commence construction. This provision helps investors save time and accelerate construction progress.
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The 2014 Law on Construction provided that only individual houses in rural areas with a scale of fewer than 07 floors and located in areas without urban planning, functional area planning, or detailed construction planning were exempt from construction permits (in principle, individual houses in urban areas were required to obtain construction permits). Meanwhile, the 2025 Law on Construction expands this by providing that both individual houses in rural areas and individual houses in urban areas, provided that such houses have a scale of fewer than 07 floors, a total floor area of less than 500 m², and are not located in functional areas or certain designated functional areas, may be exempt from construction permits.
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The 2025 Law on Construction also expands the types of works exempt from construction permits to include offshore structures belonging to offshore construction investment projects that have been allocated sea areas by competent authorities for project implementation (previously, the 2014 Law on Construction limited this exemption to offshore structures of offshore wind power projects).
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In addition, the 2025 Law on Construction also reduces investors’ obligations regarding notification of construction commencement prior to construction. Specifically:
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Individual housing works are not required to notify commencement of construction prior to building.
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Works belonging to public investment projects or linear construction works only need to submit a commencement notification without enclosing construction dossiers.
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4. Adjustment of mechanisms for entering into and performing construction contracts toward greater flexibility and closer alignment with practice
The 2025 Law on Construction introduces many important amendments related to construction contracts, clearly reflecting a trend toward more flexible risk allocation among parties, specifically:
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Supplementing provisions that allow the use of assets or escrow accounts as security measures for performance of contractual obligations instead of being limited solely to bank guarantees as before, while granting the employer the right to handle secured assets in accordance with contractual agreements.
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The 2025 Law on Construction also grants investors the right to amend construction contracts in cases of force majeure or fundamental changes in circumstances, allowing investors to consider and decide on contract amendments.
For public investment projects and PPP projects, investors are permitted to decide on and implement contract amendments that change the contract performance period without exceeding the approved project implementation period, or exceed the approved bid package price without exceeding the approved total investment, and to change other contents (contract type, contract price form, price adjustment method, data sources for price adjustment, and other related contents) in cases of force majeure or fundamental changes in circumstances, provided that the principles of not changing project objectives or investment scale, not exceeding the approved total investment, ensuring investment efficiency, and avoiding losses and waste are complied with.
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With respect to contract suspension, the 2025 Law on Construction imposes stricter requirements, under which only suspensions that have been clearly agreed in the contract regarding conditions, duration, and procedures will have legal effect.
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Regarding construction insurance during the construction period, the new Law maintains the principle that responsibility lies with the investor, but officially recognizes the right to assign the procurement of insurance to the contractor, in line with commonly applied practices in reality.
In general, it can be affirmed that the 2025 Law on Construction introduces many reforms of foundational significance to construction investment activities, contributing to improvements in the business environment, enhanced efficiency in the use of investment capital, and acceleration of project implementation progress. However, accompanying the reduction of administrative procedures is a significant increase in legal responsibilities for investors, contractors, and consulting entities. Therefore, during the period prior to the Law’s effective date, enterprises should proactively review internal procedures, standard contracts, and project implementation plans to ensure effective control of arising legal risks.
The 2025 Law on Construction takes effect from July 1, 2026.
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