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SUMMARY OF LEGAL REGULATIONS ON INVESTMENT PROCEDURES

04-05-2018 08:35:59

SUMMARY OF LEGAL REGULATIONS ON INVESTMENT PROCEDURES

CATEGORY

  1. Cases in which Investment Registration Certificate is required
  2. Investment registration authorities
  3. Procedures for issuance of Investment Registration Certificate to an investment project that does not require investment approval
  4. Authority to approve investment projects of the People’s Committees of provinces
  5. Procedures of registration of investment project that requires investment approval of People’s Committees of provinces  
  6. Authority to approve investment projects of the Prime Minister
  7. Procedures of registration of investment project that requires investment approval of the Prime Minister
  8. Authority to approve investment projects of  the National Assembly
  9. Procedures of registration of investment project that requires investment approval of the National Assembly
  10. Adjustment of Investment Registration Certificate
  11. Adjustment of investment approval for investment project that does not requires Investment Registration Certificate.
  12. Extension of project schedule
  13. Project suspension
  14. Project termination

1. Cases in which Investment Registration Certificate is required

A.  The Investment Registration Certificate is required in the following cases:

1) Investment projects of foreign investors;

2) Investment projects of business organizations in which foreign investors have dominant capital, including:   

a) 51% of charter capital or more is held by foreign investors, or the majority of the general partners are foreigners if the business organization is a partnership;

b) 51% of charter capital or more is held by the business organizations mentioned in Point a of this Clause;

c) 51% of charter capital or more is held by foreign investors and the business organizations mentioned in Point a of this Clause

B. The investment registration Certificate is not required in the following cases:

  • Investment projects of Vietnamese investors;
  • Investment projects of the business organizations in which foreign investors do not have dominant capital (except cases specified in Clause 2 of Article A above)
  • Investment is made by contributing capital, buying shares, or buying capital contributions of business organizations
  • If the above cases require investment approval, the investors must acquire investment approval prior to implementing investment project.

C. If the project falls into cases that do not require Investment Registration Certificate, but the investor still need to get Investment Registration Certificate, the investor may follow the procedure to get Investment Registration Certificate according to laws.

2. Investment registration authorities

A. The Department of Planning and Investment of each province shall receive applications, issue, adjust, and revoke Investment Registration Certificates of:

a) Investment projects outside industrial parks, export-processing zones, hi-tech zones, and economic zones;

b) Investment project of development of infrastructure of industrial parks, export-processing zones, hi-tech zones, and investment projects in industrial parks, export-processing zones, and hi-tech zones in provinces that do not have authority of industrial parks, export-processing zones, and hi-tech zones.

B. Authority of industrial parks, export-processing zones, hi-tech zones, and economic zones shall receive applications, issue, adjust, revoke Investment Registration Certificates of investment projects therein, including:

a) Projects of investment in development of infrastructure of industrial parks, export-processing zones, and hi-tech zones;

b) Investment projects executed within industrial parks, export-processing zones, hi-tech zones, and economic zones.

 C. The Department of Planning and Investment of the province in which the investor’s head quarter or executive office is located or intended to be located shall receive applications, issue, adjust, revoke Investment Registration Certificates of: 

a) Investment projects executed in more than one province;

b) Investment projects executed both inside and outside an industrial park, export-processing zone, hi-tech zone, or economic zone.

3. Procedures for issuance of Investment Registration Certificate to an investment project that does not require an investment approval

(1) The investor shall submit application to investment registration authority, including the following documents:

a) A written request for execution of invesment project;

b) Copies of documents to certify legal status of the Investor;

c) An investment proposal that specifies: investor(s) in the project, investment objectives, investment scale, investment capital, method of capital rising, location and duration of investment, labor demand, requests for investment incentives, assessment of socio-economic effects of the project;

d) Copies of any of the following documents: financial statements of the last two years of the investor; commitment of the parent company to provide financial support; commitment of a financial institution to provide financial support; guarantee for investor’s financial capacity; description of investor’s financial capacity;

đ) Demand for land use; if the project does not use land allocated, leased out by the State, or is not permitted by the State to change land purposes, then a copy of the lease agreement or other documents certifying that the investor has the right to use the premises to execute the project shall be submitted;

e) Explanation for application of technologies to the project using technologies on the List of technologies restricted from transfer , which specifies: names of technologies, origins, technology process diagram, primary specifications, conditions of machinery, equipment and primary technological line

(2) The investment registration authority shall issue the Investment Registration Certificate within 15 days from the receipt of the valid application as set out in Clause 1 of this Article if the conditions below are satisfied:

a) The project does not involve the business lines banned from investment;

b) The project satisfied conditions applied to foreign investors.

4.  Authority to approve investment projects of People’s Committees of provinces

A. People’s Committees of provinces shall issue decisions on investment approval of the following projects:

a) Projects that use land allocated or leased out by the State without auction or bidding or transfer; projects that require changes of land purposes;

b) Projects that use technologies on the List of technologies restricted from transfer prescribed by laws on technology transfers.

 B. Investment projects in Point a of this clause executed in industrial parks, export-processing zones, hi-tech zones, and economic zones in conformity with planning approved by competent authorities shall not need to get approval of the People’s Committees of provinces

5. Procedures of registration of investment projects that require investment approval of People’s Committees of provinces

A. Investment project application documents include:

a) A written request for execution of invesment project;

b) Copies of documents to certify legal status of the Investor;

c) An investment proposal that specifies: investor(s) in the project, investment objectives, investment scale, investment capital, method of capital rising, location and duration of investment, labor demand, requests for investment incentives, assessment of socio-economic effects of the project;

d) Copies of any of the following documents: financial statements of the last two years of the investor; commitment of the parent company to provide financial support; commitment of a financial institutions to provide financial support; guarantee for investor’s financial capacity; description of investor’s financial capacity;

e) Demand for land use; if the project does not use land allocated, leased out by the State, or is not permitted by the State to change land purposes, then a copy of the lease agreement or other documents certifying that the investor has the right to use the premises to execute the project shall be submitted;

f) Explanation for application of technologies to the project using technologies on the List of technologies restricted from transfer , which specifies: names of technologies, origins, technology process diagram, primary specifications, conditions of machinery, equipment and primary technological line

g) The business cooperation contract (if the project is executed under a business cooperation contract).

B. Procedures of Registration of investment projects that require Investment approval of People’s Committees of provinces:

  1. The investor submits application documents;
  2. Investment registration authority shall get opinion of relevant state authorities   (regarding master plan, land, investment conditions of foreign investor, investment incentives, technology)
  3. The relevant state authorities shall appraise and send opinion to investment registration authority
  4. Investment registration authority shall make and submit appraisal report to the People’s Committee of the province
  5. The People’s Committee of the province shall issue the decision on investment approval. In case of rejection, a written response providing explanation shall be made.
  6. In case the project requires Investment Registration Certificate, investment registration authority shall issue Investment Registration Certificate after getting investment approval. 

C.  With regard to a project that receives land or leases land from the State without bidding, receives a land use right or property on land, or requires land repurposing and is executed in an industrial park, export-processing zone, hi-tech zone, or economic zone in conformity with the planning approved by a competent authority, the investment registration authority shall consult with relevant authorities in order to issue the Investment Registration Certificate without having to request the People’s Committee of the province to issue a decision in investment approval.

6. Authority to approve investment projects of the Prime Minister.

The following investment projects must get approval of the Prime Minister:

A. The following projects regardless of capital sources:

a) Projects that require relocation of 10,000 people or more in highlands; 20,000 people or more in other areas;

b) Construction and operation of airports; air transport;

c) Construction and operation of national seaports;

d) Petroleum exploration, extraction, and refinery;

dd) Betting and casino services;

e) Cigarette production;

g) Development of infrastructure of industrial parks, export-processing zones, and specialized sectors in economic zone;

h) Construction and operation of golf courses;

 B.  Projects not mentioned in Clause A in which investment capital is VND 5,000 billion or above;

C.  Projects of investment of foreign investors in sea transport, provision of telecommunications services with network infrastructure; afforestation, publishing, journalism, establishment of wholly foreign-invested science and technology organizations or science and technology companies;

D. Other projects subject to approval authority of the Prime Minister as prescribed by law.

7. Procedures of Registration of investment projects that require investment approval of the Prime Minister:

  1. The investor submits application documents to investment registration authority in the province where the investment project shall be excuted
  2. The investment registration authority send application documents to Ministry of Planning and Investment and send request for opinion of relevant state authorities
  3. The Ministry of Planning and Investment shall make and submit a review report to the Prime Minister for issuance of a decision on investment approval.
  4. In case the project requires Investment registration certificate, investment registration authority shall issue Investment registration certificate after getting investment approval
  5. With regard to an investment project whose capital is VND 5,000 billion or over (except the cases in Clause 1 Article 31 of the Law on Investment) and is conformable with planning approved by a competent authority, the investment registration authority shall only consult with the Ministry of Planning and Investment and relevant state authorities in order to issue the Investment Registration Certificate.

8. Authority to approve investment projects of  the National Assembly

The following investment projects must get approval of the National Assembly:

1. Projects that have significant effects on the environment or potentially have seriously affect the environment, including:

a) Nuclear power plants;

b) Projects that change purposes of land in national parks, wildlife sanctuaries, landscape sanctuaries, experimental forests of 50 hectares or larger; headwaters protective forests of 50 hectares or larger; protection forests meant for protection against wind, sand, waves, land reclamation, environmental protection of 500 hectares or larger, production forests of 1,000 hectares or above;

2. Projects that change purposes of land meant for rice cultivation with two or more crops of 500 hectares or larger;

3. Projects that require relocation of 20,000 people or more in highlands; 50,000 people or more in other areas;

4. Projects that require special policies decided by the National Assembly.

9. Procedures of registration of investment project that requires Investment approval of the National Assembly

 Procedures of Registration of investment project that requires investment approval of the National Assembly

  1. The investor submits application documents to investment registration authority in the province where the investment project shall be excuted
  2. The investment registration authority sends application documents to Ministry of Planning and Investment. Ministry of Planning and Investment shall send a report to the Prime Minister and request an establishment of an Appraisal Council.
  3. the Appraisal Council shall appraise the project dossier and make a report, then submit it to the Prime Minister
  4. At least 60 days before the opening of the General Meeting of the National Assembly, the Government shall submit the decision on investment policies to the agency in charge of appraisal of the National Assembly
  5. The Government and relevant entities are responsible for providing sufficient information and documents serving the appraisal; provide explanation for the project contents at the request of the agency in charge of appraisal of the National Assembly.
  6. The National Assembly shall consider passing a Resolution on investment approval or reject
  7. In case the project requires Investment registration certificate, investment registration authority shall issue Investment registration certificate after getting investment approval

10. Adjustment of Investment registration certificate

A. An application for adjustment to the Investment Registration Certificate consists of:

a) A written request for adjustment to the Investment Registration Certificate;

b) A report on project execution up to the date of project adjustment;

c) An investor’s decision on adjustments to the investment project;

d) Other documents including: Copies of documents to certify legal status of the Investor;  proposal to adjusting investment project:; document certify financial status of the investor, demand for land use; explanation for application of technologies to the project use technologies on the List of technologies restricted from transfer 

B. After get sufficient documents, the investment registration authority shall adjust the Investment Registration Certificate. In case of rejection, the investor must be notified in writing and provided with explanation

C. If the project must get investment approval, if the adjustments are pertaining to the objectives, targets, primary technologies of the project, increase or decrease of capital investment by more than 10%, project duration, changes of investors or conditions applied to investors (if any), the investment registration authority must shall follow the procedures to get investment approval before adjusting the investment registration Certificate.

 D.  If the adjustment to the Investment Registration Certificate makes the project falls into the scope of project that must get investment approval, the investment registration authority shall follow the procedures to get investment approval before adjusting the Investment Registration Certificate

11. Procedures for adjusting investment approval for investment projects that are not required to have Investment Registration Certificates

 A. The investor must follow procedure for adjusting investment approval for investment projects in the following cases:

a) The project’s target, location, primary technology is changed;

b) An increase or decrease in total capital by over 10% changes the project’s target, scale, and capacity;

c) The project’s execution period or conditions to be fulfilled by the investor are changed (if any).

B.  With regard to a project that receives land or leases land form the State without bidding, receives a land use right or property on land, or requires land repurposing is executed in an industrial park, export-processing zone, hi-tech zone, or economic zone in conformity with the planning approved by a competent authority, the registration authority shall get opinion of relevant authorities before issuing decision on adjusting investment approval.

C. With regard to projects whose capital is 5000 billions or more, and not fall into Clause 1 of Article 31 of Investment Law, in conformity with the planning approved by a competent authority registration authority shall get opinion of Ministry of Planning and Investment and relevant authorities before issuing decision on adjusting investment approval.

12. Investment extension

A. If the investment registration Certificate or decision on investment approval has been issued, the investor shall submit written proposals to the investment registration certificate when extending the capital contribution schedule, construction schedule, and inauguration schedule (if any); schedule for target achievements.

2. Contents of the proposal:

a) The progress of the project and fulfillment of financial obligation to the State since the issuance of the investment registration Certificate or decision on investment approval up to the extension date;

b) Explanation and length of extension;

c) Plan for carrying on the project, including capital contribution plan, infrastructural development schedule, and inauguration schedule;

d) The investor’s commitment to carry on the project.

C. The extension shall not exceed 24 months. In force majeure events, the time for recovery shall not be included in the extension.

D. After receiving the proposal, the investment registration authority shall offer its opinions in writing.

13. Investment Project suspension

A. When suspending the project, the investor must notify the investment registration authority in writing. If the project has to be suspended in a force majeure event, the investor shall be exempt from paying land rents for the suspension period, which is necessary for recovery from the event.

B. The investment authority shall decide to suspend part or whole of the project in the following cases:

a) For protection of historical remains, relics, antiques, national treasures according to the Law on Cultural heritage;

b) For environmental recovery at the request of a environment authority;

c) For implementation of occupational safety measures at the request of an labor authority;

d) The project is suspended under the decision or judgment of the court or arbitral tribunal;

dd) The investor fails to adhere to the Certificate of investment registration and recommits administrative violations after incurring penalties.

 C. The Prime Minister shall decide to suspend part or all of a project if the project execution threatens to affect national security at the request of the Ministry of Planning and Investment.

14. Project termination

A. A project shall be terminated in the following cases:

a) The investor decides to terminate the project;

b) The project has to be terminated according to the regulations of the contract or company’s charter;

c) The project duration is over;

d) The investor fails to overcome the difficulties that lead to project suspension by the decision of competent authority;

đ) The land of the project is withdrawn by the State, or the investor is  not permitted to keep using the premises and fails to complete procedures for change of project location within 06 months from the day on which the decision on land/premises withdrawal is issued;

e) The investment registration authority cannot contact the investor or the investor’s legal representative after 12 months from the date of suspension of the project;

g) The investor fails to execute or is not able to execute the project after 12 months according to the schedule registered with the investment registration authority and is not permitted to extend the project execution schedule;

h) The project is terminated under a decision of the Court or arbitral tribunal

B. The investment registration authority shall decide project termination in the cases mentioned in Points d, đ, e, g và h above.

C. The investor shall liquidate the project in accordance with regulations of law on asset liquidation when terminating the project.

D. In case the project land is withdrawn by the State but the investor fails to liquidate assets on land within 12 months from the withdrawal date, the authority that issues the decision on land withdrawal shall liquidate such assets.

* Disclaimer:
This article is for reference only. In case you need to carry out investment activities, please contact a legal consultant for timely updating.

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