A contract price fixed in US dollars but payable only in Vietnamese dong can turn a profitable project into a loss, or leave a lender unable to confirm what its borrower will receive. The currency foreign exchange construction contract Vietnam question is therefore a pricing, financing and compliance issue at once. This article explains what Vietnamese law fixes, what it leaves to the parties, and how the FIDIC 1999 edition handles the same problem.
The Vietnamese sources used here are the Construction Law 135/2025/QH15 and Decree 210/2026/ND-CP on construction contracts, both effective from 1 July 2026. The foreign-exchange legislation itself and the State Bank regulations are not analysed in detail, and points that depend on them are stated in general terms. The issue arises on every type of project, from an airport terminal to a hotel fit-out, but the commercial answer differs by sector.
The default rule: payment in Vietnamese dong
Article 87(2)(c) of the Construction Law states that the currency of payment under a construction contract is Vietnamese dong. Where foreign currency is used, the parties must comply with the law on foreign-exchange management. That sentence frames every currency clause in a Vietnamese-law construction contract.
Three consequences follow for investors and contractors:
- Dong is the starting point. A clause requiring payment in a foreign currency is an exception that must fit within foreign-exchange rules, not a freedom the parties may assume.
- The rule is general. It applies to private as well as public projects; the public-investment and PPP rules in Decree 210 add detail but do not create the principle.
- Pricing in one currency and paying in another is a separate question. Whether a price may be expressed in dollars and settled in dong, or the reverse, depends on foreign-exchange law and the nature of the project.
Currency foreign exchange construction contract Vietnam: the practical options
In practice, contracts for Vietnamese projects use one of four structures. The table below summarises them. The legal acceptability of each should be confirmed against current foreign-exchange rules and the project’s funding source before signature.
| Structure | How it works | Main advantage | Main exposure |
|---|---|---|---|
| A. Dong price, dong payment | Price and payment both in VND | Simplest compliance position | Foreign contractor bears exchange-rate risk and convertibility risk on imported content |
| B. Dong payment with indexation | VND payment, price adjusted by a currency or price index | Shares exchange-rate movement between the parties | Needs a clear index source and formula; disputes over adjustment triggers |
| C. Split currency price | Part in VND (local costs), part in foreign currency (imported plant, foreign services) | Matches currency of cost to currency of price | Foreign-currency element must fit foreign-exchange law |
| D. Treaty or loan-driven currency | Currency set by the financing instrument | Aligns with lender requirements | Applies only where the treaty or loan terms govern payment |
A hypothetical illustration (figures are invented for the example): a contractor prices a plant package at the equivalent of 100 units, of which 60 are imported equipment bought in foreign currency and 40 are local labour and materials.
If the whole price is fixed in dong and the dong weakens by 5% before the equipment is paid for, the contractor loses roughly 3 units of margin, which may be most of its profit. A split-currency or indexed structure moves that exposure to where it belongs. This is why every currency foreign exchange construction contract Vietnam negotiation should begin with a cost-currency map.
Decree 210 supports the split-currency model in principle: where a contract is priced in several currencies, the contract must state the part of the price in each currency, consistent with the tender documents and negotiation minutes (Article 28(2)). For public-investment and PPP projects only, payments under ODA or foreign loans follow the relevant international treaty (Article 28(4)(m)).
Drafting or reviewing the currency and payment clauses of a Vietnam construction contract? IVLF Advisors invites you to request a confidential preliminary review under an NDA. Any conclusions depend on the contract, funding structure and current regulations.
How Decree 210 treats exchange-rate and price risk
Price form and risk allocation
Decree 210 requires the parties to agree who manages foreseeable risks, including price fluctuation, and who manages unforeseeable ones (Article 18(1)). A lump-sum price stays fixed except for force majeure, fundamental change of circumstances, a change of scope or agreement (Article 6). A fixed-unit-rate price is similarly fixed, apart from the listed exceptions. Neither form says anything about foreign exchange, so the currency mechanism must be written in.
For public-investment and PPP contracts only, Decree 210 sets rules on adjusting unit prices, including price-index sources: where the Ministry of Construction or provincial sources are unsuitable, the employer determines the source, and for costs incurred abroad foreign sources may be used (Article 24(2)(e)). Private contracts agree their own formulas, and the decree allows the parties to use formulas widely applied in international practice (Article 22(3)). For a broader view of adjustment mechanics, see our guide to price adjustment in construction contracts in Vietnam.
When a currency event becomes a legal event
An ordinary exchange-rate movement is seldom a force majeure or fundamental-change event on its own. The Construction Law lists State changes of policy or law, and unforeseeable abnormal ground conditions, as fundamental changes of circumstances (Article 13(2)), and the Civil Code 2015 conditions still apply (Article 13(3), Articles 156 and 420). A new foreign-exchange restriction that directly affects performance is a better candidate than a market move; it may also allow the parties to modify the contract under Article 84(2) of the Construction Law.
Decree 210 Article 18(3) adds a process for abnormal price volatility beyond forecasting that causes serious loss: the parties assess impact against the position at signing, compare the losses of continuing and terminating, test the result against Article 13, and share risk through an amendment. That is a negotiation framework, not an automatic right to compensation.
Public-investment, PPP and ODA projects: what changes
The rules in this section apply only to public-investment and PPP projects. For them, an advance payment above VND 1 billion must be backed by an advance payment guarantee in the same value and the same currency as the advance (Decree 210 Article 12(3)(c)). Unit-price adjustment follows the rules in Article 24(2), and payments funded by ODA or foreign loans follow the relevant treaty (Article 28(4)(m)). A private project is free to agree different advance and guarantee terms (Article 12(2)), but a lender will usually insist on equivalent protection.
Where a foreign-currency advance is paid, check that the guarantee, the repayment mechanism and the recovery schedule are all stated in the same currency. Otherwise a currency gap can arise between what was advanced and what the guarantee covers.
Late payment, interest and currency of the interest
The employer must pay in full and on time after deducting advances and agreed retentions (Construction Law Article 87(2)(b)). Under Decree 210 Article 28(5), a late payer owes interest on the overdue sum at the agreed rate, or if none is agreed at the overdue lending rate published by the contractor’s commercial bank. The contract should state the currency of that interest and the bank account it is computed against.
For public-investment and PPP contracts only, payment must be made within 14 working days of receiving a valid file (Article 28(4)(l)), and the contractor may suspend work if a payment stage remains unpaid more than 28 days after it falls due (Article 26(2)(a)). Private contracts follow party agreement, so the contract needs its own payment period and suspension right.
The FIDIC 1999 approach to currency
The FIDIC 1999 edition, which many foreign-funded projects still use, treats currency in a self-contained set of provisions. The Silver Book (EPC and turnkey) is a convenient reference, because its text is widely used by foreign investors, but the Red and Yellow Books handle currency in a comparable way (market practice).
- Sub-Clause 1.1.4 definitions: “Local Currency” is the currency of the Country; “Foreign Currency” is any other currency in which part of the price is payable.
- Sub-Clause 14.15 (Currencies of Payment): the price is paid in the currencies named in the Contract Agreement. If the price was expressed in Local Currency only, the Contract Agreement fixes the foreign and local proportions and the exchange rates, unless the parties agree otherwise. If no rates are stated, the rates are those prevailing on the Base Date as determined by the central bank of the Country.
- Sub-Clause 13.4 (Payment in Applicable Currencies): when a variation is agreed or determined, the amount payable in each currency is specified by reference to the currency proportions of the varied work.
- Sub-Clause 14.7: payment of each currency goes into the bank account nominated by the contractor, in the payment country specified for that currency.
- Sub-Clause 14.8: delayed payment carries financing charges, compounded monthly, at three percentage points above the central bank discount rate of the country of the currency of payment, paid in that currency, unless the Particular Conditions say otherwise.
- Sub-Clause 13.7: the price is adjusted for increases or decreases in cost resulting from a change in the laws of the Country made after the Base Date, which may include new foreign-exchange restrictions.
Two limits matter. First, FIDIC fixes rates at the Base Date unless the contract says otherwise, so the FIDIC default does not protect either side against later movement. Second, FIDIC cannot override Vietnamese mandatory rules: a payment country and currency stated in the Contract Agreement still have to be permissible under Vietnamese foreign-exchange law. The FIDIC website publishes the standard forms and guidance.
Foreign investors, lenders and cash flow
For a lender, currency drafting is a security issue. The questions are practical: in which currency does the borrower receive payment, into which account, and can the borrower service foreign-currency debt from it?
Foreign-invested companies commonly route capital through a direct investment capital account. According to the secondary analysis of DEDICA Law, Circular 06/2019/TT-NHNN (Articles 5 and 9) governs foreign-currency direct investment capital accounts. We have not read those provisions, so lenders and borrowers should confirm which flows may pass through which accounts, and the conditions on converting and remitting funds.
A foreign contractor working through a licence or joint venture should also check:
- whether the portion of the price allocated to the Vietnamese partner or subcontractor is payable in dong only;
- how tax is withheld on payments abroad (tax is not analysed here); and
- whether the employer can give a payment security. Under Article 83(3) of the Construction Law, the contractor may require proof of the employer’s financial capacity or payment security, except in public-investment contracts.
For the wider payment cycle, our note on payment and final account in Vietnamese construction contracts covers certification, final account and termination steps.
Drafting checklist for the currency clause
Currency foreign exchange construction contract Vietnam: core terms
- State the price currency and the payment currency separately, and give the legal basis for any foreign-currency element.
- Where there are several currencies, list the share of the price in each (Decree 210 Article 28(2)).
- Name the exchange-rate source, the date of conversion and the party bearing the spread.
- Define how variations, provisional sums and claims are priced in each currency (FIDIC Sub-Clause 13.4 is a model).
- Set the late-payment interest rate and its currency.
Risk and change terms
- Choose between fixed rates and an indexation formula, and name the data source.
- Define a change-of-law clause that expressly covers foreign-exchange regulation (FIDIC Sub-Clause 13.7 is a model; Construction Law Article 84(2)(a) supports modification).
- Provide for a contractual negotiation step before suspension or termination.
- State the governing law of the currency clause, and the court or arbitral forum.
Keep currency terms consistent across the main contract, subcontracts, guarantees and financing documents. A mismatch in currency or account between the guarantee and the contract is a frequent cause of failed drawdowns (market practice).
Claims, damages and awards in foreign currency
Disputes add a second currency question: in which currency are damages, delay compensation or a final account expressed, and how is an award converted and paid in Vietnam? The contract can state the currency of claims and the conversion date, which reduces argument later. Whether and how a foreign-currency judgment or arbitral award may be paid out of Vietnam is governed by enforcement and foreign-exchange rules that we have not analysed. Build that into the dispute clause rather than leaving it to the enforcement stage.
The same discipline applies to the currency foreign exchange construction contract Vietnam parties sign with subcontractors: pay-when-paid or back-to-back terms only work if the currency and the exchange-rate date match the main contract.
How the Currency Foreign Exchange Construction Contract Vietnam Rules Apply Across Project Types: Infrastructure, Industry, Energy and Real Estate
Article 87(2)(c) of the Law on Construction starts from payment in Vietnamese dong and allows foreign currency only within foreign-exchange law. How that plays out depends on who the employer is, where the money comes from and what is imported.
Infrastructure and transport
State-owned airport terminals, expressways, ports and high-speed rail stations are often funded by public money, ODA or loans, and public-investment and PPP rules in Decree 210 may apply. For the Long Thanh airport, phase 1 commercial operation is expected from 24 December 2026 per press reports; terminal equipment is the type of package where foreign-sourced items sit alongside dong-denominated civil works.
The North-South high-speed railway, reported at roughly 1,541 km with a design speed of 350 km/h (VietNamNet, 9 October 2026), would involve a mix of local and imported content; the currency split in any package must be set out in the contract and comply with foreign-exchange rules.
Heavy industry and FDI factories
Steel, petrochemical and cement plants are import-heavy: the equipment is priced in a foreign currency and the civil works in dong. A split-currency price schedule with clear payment channels is the practical solution, and an FDI owner should align the schedule with its own capital and repatriation arrangements.
Renewable energy and power
Solar, wind, grid and LNG or gas-to-power projects often have revenue in dong under a power-purchase arrangement, while equipment and debt are in foreign currency. The mismatch is the lender’s concern; whether the arrangement allows indexation depends on the PPA and electricity-law rules. Foreign-exchange cover or adjustment mechanisms in the construction contract should reflect that.
Real estate and tourism
Resorts, hotels and urban projects earn in dong but may import design services and fit-out. A hypothetical example: a resort developer pays a foreign interior contractor partly in dollars; the dollar element must have a lawful basis under foreign-exchange rules, which should be confirmed with the bank.
| Sector | Typical currency feature | What to check |
|---|---|---|
| Transport infrastructure | Public funding, ODA, imported systems | Funding-source rules, split-currency schedule |
| Heavy industry | Imported plant, dong civil works | Split pricing, remittance channels |
| Energy and power | Dong revenue, foreign debt | Indexation, lender cover, PPA link |
| Real estate | Dong revenue, imported fit-out | Lawful basis for foreign-currency items |
Conclusion
Vietnamese law starts from dong payment and permits foreign currency only within foreign-exchange rules, while Decree 210 and FIDIC supply mechanisms for multi-currency pricing, price adjustment and late payment. The commercial answer is to write the currency, rate source, indexation and change-of-law terms explicitly. Your next step: map every payment flow in the project against its currency and legal basis, and close any unsupported foreign-currency element before signing.
Frequently Asked Questions
Can a construction contract in Vietnam be paid in US dollars?
The Construction Law sets Vietnamese dong as the payment currency and allows foreign currency only in compliance with foreign-exchange law. Whether dollar payment is available depends on that law and the project.
Does Decree 210 give protection against exchange-rate loss?
Not automatically. It requires the parties to allocate price-fluctuation risk and sets a negotiation framework for abnormal volatility. Protection must be written into the contract through indexation or a change-of-law clause.
Do the 14-working-day payment and 28-day suspension rules apply to private contracts?
No. Those figures apply only to public-investment and PPP contracts. Private contracts follow the parties’ agreement, so the payment period and suspension right must be written in.
What does FIDIC 1999 say about exchange rates?
FIDIC Sub-Clause 14.15 uses the rates in the Contract Agreement or, if none, the Base Date rates set by the central bank of the Country. It does not protect against later movement.
Is exchange-rate movement a fundamental change of circumstances?
Seldom on its own. A new foreign-exchange restriction by the State is a stronger candidate, but the Civil Code conditions for hardship must still be met.
Disclaimer: this article is general information, not legal advice for a specific matter. It reflects the law as of 22 October 2026. Please obtain advice on your own facts before acting.
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