When a project combines Vietnamese State capital with a foreign investor’s capital, the procedural puzzle is no longer ordinary investment procedure plus one more partner. State capital brings its own rule system: investor selection may have to go through bidding, the capital representative must act within the State capital management mechanism, and the project faces extra layers of supervision and audit that a purely private project does not. A foreign investor entering such a structure must understand these layers before negotiating.
This article analyses the procedural particularities of mixed State–foreign capital projects: when investor selection by bidding is required, who signs the dossier for the State capital portion, and what additional control mechanisms the parties should anticipate in their cooperation agreement.
Legal basis: where investment law, bidding law and State capital rules meet
The project’s general investment procedure still follows the Law on Investment No. 143/2025/QH15 and Decree No. 96/2026/ND-CP, including investment policy approval and Investment Registration Certificate (IRC) issuance where applicable. But where the project is tied to land, assets or exploitation rights managed by the State and falls into a case requiring investor selection, the Law on Bidding No. 22/2023/QH15 governs bidding to select investors for land-using projects and other projects subject to bidding under sectoral laws.
State capital participating through a State-owned enterprise or a capital-managing body is further governed by the law on management and use of State capital invested in production and business at enterprises. The practical consequence is that decisions on contributing capital, appointing capital representatives and making material commitments on the State side must follow the internal authority of the owner’s representative agency and the State enterprise, rather than the flexibility of a private partner. These three legal layers run in parallel, and the foreign investor should test all three when designing the project structure.
Particularities throughout a mixed-capital project
Particularity 1: The investor selection route
If the project falls into a case requiring investor selection by bidding — typically a land-using project managed by the State where the law requires bidding — a consortium including a foreign party must join the bidding process like any other investor, instead of being designated because a State partner sits inside the consortium. The bidding result is the basis for the next steps of the investment procedure. If the project is not bidding-subject, the parties run ordinary policy approval and IRC procedures, but must still handle the State side’s internal procedural layer.
Particularity 2: Who signs for the State capital portion
Project dossiers on the State side are signed by the representative of the State capital portion or the legal representative of the participating State-owned enterprise, within the authority approved by the owner’s representative agency. The foreign investor should verify this authority through the written approval of the capital contribution and the representative appointment, because a signature exceeding authority on the partner’s side can cause the whole arrangement to be revisited when the owner agency or auditors review it.
Particularity 3: Internal approval chains lengthen preparation
State-side decisions on contributing capital, participation ratios and appointing managers often pass several approval levels and may involve valuation of contributed assets as prescribed. The project schedule must add time for these approval rounds and for the possibility that agreement contents are adjusted per the owner agency’s comments. Building the partner’s approval milestones into the master schedule from the start avoids being caught off guard.
Particularity 4: Supervision, audit and disclosure after licensing
A project with State capital faces additional supervision by the owner’s representative agency, State audit over the State capital portion as prescribed, and reporting duties on capital use efficiency. The parties’ agreement should regulate the State side’s information and books access rights and the coordination mechanism when inspection or audit teams arrive, so these duties do not become a source of operational conflict.
| Aspect | Project with State capital | Purely private project |
|---|---|---|
| Investor selection | May require bidding under the Law on Bidding No. 22/2023 | Direct agreement between the parties |
| Partner signatory | Capital representative within approved authority | The enterprise’s legal representative |
| Supervision | Extra owner supervision and State audit of the State portion | Ordinary investment and tax supervision |
Common risks when partnering with the State capital side
Negotiating fully before learning the project needs bidding
Many consortiums form on the assumption of direct implementation, then discover the project is subject to investor selection bidding. The entire negotiated structure must then reopen within the bidding dossier framework. The first task is to determine the project’s investor selection route before spending on detailed negotiation.
Not verifying the State signatory’s authority
Trusting the counterpart’s title without requesting the capital contribution approval and representative appointment documents is a serious risk. If a commitment is signed beyond authority, the consequences include not only contract disputes but also liability handling over State capital, dragging the project into lengthy review processes.
A shareholders’ agreement silent on audit mechanisms
When State auditors or the owner agency request documents about the State capital portion, the project must comply by law regardless of confidentiality arrangements between the parties. The cooperation agreement should pre-regulate how information is provided and its scope, instead of letting this legal duty collide with confidentiality commitments after the event has occurred.
A project with state capital participation stands at the intersection of two regulatory systems: investment law of general application and the rules on management and use of state capital — and both systems have seen their own changes in recent years. Applying experience from a purely foreign project to this kind of project usually goes wrong right at the decision-authority step: there are matters a private partner decides in one meeting, while the state side must go through a mandatory internal sequence. At the start of the project, identify clearly which instruments currently govern the state capital portion and how the contributing party makes its decisions, instead of assuming everything works like an ordinary private transaction.
In a project with state capital participation, the timeline does not rest solely with the investment registration authority: every document must also pass through the internal process of the state capital contributor, with its own meeting rhythm and appraisal sequence. The same supplement request that a purely private project can answer within days may take a project with a state party a full internal approval cycle to respond to. When scheduling this kind of project, factor in the state partner’s internal processing time and agree the coordination contacts between the parties early, instead of looking only at the processing time stated for the procedure.
In short, a project with State capital alongside a foreign investor sits under three overlapping control layers: the general investment procedure, investor selection bidding where applicable, and the State capital management mechanism on the partner’s side. The foreign investor should determine the investor selection route at the outset, verify the State side’s signing authority in writing, and write supervision and audit duties into the cooperation agreement. Prepared this way, the mixed-capital structure becomes a resource advantage rather than a source of procedural risk.
Frequently Asked Questions
What is special about procedures for a project with both State capital and foreign capital?
The special features lie in three layers of rules running in parallel: investment procedures under the Law on Investment No. 143/2025/QH15 still apply; the project may have to select its investor by bidding under the Law on Bidding No. 22/2023/QH15; and the State-capital side must follow approval and capital-representative appointment mechanisms under State capital management law. The project is also subject to owner-representative supervision and State audit over the State capital portion.
If State capital participates, must the investor be selected by bidding?
Not in every case. The duty to select an investor by bidding arises when the project falls within the cases the law prescribes for bidding, typically projects using land in the situations required by the Law on Bidding No. 22/2023/QH15 and sectoral laws. A project outside those cases follows ordinary investment procedures. The first step is therefore to determine whether the specific project is bidding-subject, rather than inferring it from the presence of State capital alone.
Who signs the dossier on behalf of the State capital portion?
The signatory is the representative of the State capital portion in the enterprise or the legal representative of the participating State-owned enterprise, acting within the authority approved by the owner’s representative agency. The foreign partner should ask to see the approval for the capital contribution and the representative appointment before signing material agreements, ensuring the signature is effective and the project will not be re-examined over authority issues.
This article has been quality-reviewed by the FLAW AI Legal Council
