PPP PROJECT CONTRACTS IN VIETNAM – KEY LEGAL CONSIDERATIONS FOR FOREIGN INVESTORS
A PPP project contract is a written agreement between a competent state authority and an investor and/or a PPP project company, under which the State grants the investor the right to implement a PPP project in accordance with the Law on Public–Private Partnership Investment (“PPP Law”).
This Legal Brief highlights key legal issues that foreign investors and PPP project companies should consider when structuring, negotiating, and implementing PPP project contracts in Vietnam.
1. Types of PPP Project Contracts
Under the PPP Law and Decree No. 243/2025/ND-CP, PPP project contracts include, among others:
- BOT, BTO, BOO;
- O&M;
- BTL, BLT;
- BT;
- Hybrid PPP contracts.
The selected contract type directly affects the payment mechanism, asset ownership, risk allocation, and the overall bankability of the project.
2. Model PPP Contracts and Contractual Flexibility
Decree 243 provides PPP model contracts on a guidance basis only, without detailed contractual provisions (except for transport BOT projects under Circular No. 09/2022/TT-BGTVT).
While this approach allows greater flexibility in investor-proposed PPP projects, it also creates legal and commercial risks for state-initiated PPP projects, due to:
- the absence of detailed benchmark contracts; and
- limited time for bid preparation.
3. Limitations on Contract Negotiation and Finalization
Once an investor is selected, negotiations on the PPP project contract are strictly constrained. In particular:
- material terms of the bidding dossier or proposal may not be amended; and
- the investor’s bid commitments must remain unchanged.
Accordingly, key bankability provisions (including risk allocation, revenue mechanisms, termination, compensation, governing law and dispute resolution) must be carefully assessed at the bidding stage.
4. Amendment of PPP Project Contracts
A PPP project contract may only be amended where:
- the right to amend is expressly provided for in the contract; and
- statutory conditions are satisfied, such as force majeure, fundamental change of circumstances, changes in laws or policies materially affecting the technical or financial model, changes to contracting parties, extension of the contract term, or other cases that do not alter the approved investment policy and enhance project efficiency.
5. Assignment and Exit Strategy
Vietnamese PPP regulations do not permit assignment of the PPP project contract itself. Instead, the law allows:
- transfer of shares or capital contributions in the PPP project company.
This framework has significant implications for exit strategies, M&A transactions, lender step-in rights, and project financing structures.
6. Early Termination and Compensation
Early termination of a PPP project contract is permitted only in limited statutory circumstances, including force majeure, national interest, insolvency, material breach, fundamental change of circumstances, or prolonged revenue shortfalls in innovation-driven PPP projects.
In such cases, investors may be entitled to partial compensation, primarily aimed at mitigating losses rather than guaranteeing expected returns.
Conclusion
For foreign investors, PPP project contracts in Vietnam require:
- early and thorough legal due diligence;
- bankability-focused contract structuring; and
- proactive risk management from the bidding stage onward.
Disclaimer
This Legal Brief is provided for general informational purposes only and does not constitute legal advice, a legal opinion, or a professional recommendation in respect of any specific transaction, project, or set of circumstances.
The application of the laws and regulations discussed herein may vary depending on the specific facts and context of each case. Readers should not act or refrain from acting based on the contents of this Legal Brief without seeking independent legal advice tailored to their particular situation.
BFSC Law LLC and the authors expressly disclaim any liability for any loss or damage arising from reliance upon or use of this Legal Brief.
Key contacts:
Mr. Phan Quang Chung
Founder & Managing Partner
BFSC Law LLC
Email: [email protected]
Ms. Duong Thi Vong
Partner
BFSC Law LLC
Email: [email protected]
BFSC Law LLC
PPP & Infrastructure Practice