After implementing the necessary investment procedures, the actual execution of investment project in accordance with what has been committed is an important step for a successful investment project and brings profits for investors as well as value to society. Viet Nam Law on Investment has regulations on execution of investment projects. Let’s join Lawyer X to find out about this issue through the following article: “Hello, lawyer! The project of my company has completed the necessary investment procedures, now it is in the stage of execution in reality. I want to ask about legal regulations related to execution of investment projects? Is there anything to be considered? Thanks for your advice! “
Legal grounds
Law on Investment
What is execution of investment projects?
Business investment means the use of investment capital by investors to carry out business activities. Investor means an organization or individual carrying out business investment activities. Investors include domestic investors, foreign investors and foreign-invested economic organizations.
The implementation of an investment project can be understood as the investor, after completing the investment procedures, will carry out the necessary work as well as other legal procedures in accordance with the objectives. content, committed schedule for the investment project to be implemented in practice.
Rules for execution of investment projects
– For a project subject to approval for its investment guidelines, the approval for investment guidelines shall be granted before the investor executes the investment project.
– For a project subject to issuance of an investment registration certificate, the investor shall follow the procedures for issuance of the investment registration certificate before executing the investment project.
– Investors shall comply with regulations of Law on Investment and the laws on planning, land, environment, construction, labor and fire prevention and fighting; other relevant regulations of law, written approval for investment guidelines (if any) and the investment registration certificate (if any) during execution of their investment projects.
Guarantee for execution of investment projects
– The investor shall pay a deposit or have a bank guarantee for assurance of investment project execution if the project uses land allocated or leased out by the State to allocate or lease out land or is permitted by the State to repurpose land, except for the following cases:
+ The investor is the successful bidder for the right to use a land area that is allocated by the State for land levy or leased out by the State for a lump-sum rent;
+ The investor wins bidding for execution of an investment project using land;
+ The State allocates or leases out land to the investor on the basis of receipt of an investment project for which a deposit has already been paid or for which the capital has been fully contributed or raised following the schedule specified in the written approval for investment guidelines or the investment registration certificate;
+ The State allocates or leases out land to the investor for execution of an investment project on the basis of receipt of the land use right and assets on land from another land user.
– Based on the scale, nature and execution schedule of each investment project, the deposit for assurance of project execution is 01% – 03% of the investment capital of the project. If a project comprises multiple investment phases, the amount of deposit shall be paid and returned in each phase of execution of the investment project, except for the case in which the deposit is not returned.
Duration of investment projects
– The duration of an investment project inside an economic zone shall not exceed 70 years.
– The duration of an investment project outside an economic zone shall not exceed 50 years. The duration of a project in an disadvantaged area or extremely disadvantaged area or a project with large investment capital but with slow rate of capital recovery may be longer but shall not exceed 70 years.
– If a project uses land allocated or leased by the State, but the transfer of land is delayed, the delay shall not be included in the project duration or execution schedule.
– Upon expiry of the duration of an investment project, if the investor wishes to keep executing the investment project and satisfies the conditions as prescribed by law, the duration of the investment project may be extended but shall not exceed the maximum prescribed in Clauses 1 and 2 of Article 44 Law on Investment, except for the following investment projects:
+ Investment projects using obsolete technology, potentially causing environmental pollution or natural-resource intensive projects;
+ Investment projects in which the investor must transfer assets without refund to the State of Vietnam or the Vietnamese side.
Determination of value of investment capital; assessment of value of investment capital; assessment of machinery, equipment and technological lines
– Every investor shall ensure the quality of machinery, equipment and technological lines for execution of investment projects in accordance with regulations of law.
– The investor shall self-determine the value of the investment capital of the investment project after the project is put into operation.
– Where necessary, to ensure state management of science and technology or to form a basis for tax calculation, the competent authority has the power to require independent assessment of the value of the investment capital, quality and value of machinery, equipment and technological lines after the investment project is put into operation.
– The investor must bear any expenses for assessment if the assessment results lead to an increase in the tax obligations discharged to the State.
Transfer of investment projects
– The investor is entitled to transfer part or whole of the investment project to another investor when the following conditions are satisfied:
+ The investment project or the part of the investment project which is transferred has not been terminated in accordance with Clauses 1 and 2 Article 48 of Law on Investment;
+ The foreign investor receiving the investment project or part of the investment project must satisfy the conditions set out in Clause 2 Article 24 of Law on Investment;
+ The conditions set forth the law on land are complied with if the transfer of an investment project is associated with transfer of the land use rights/assets on land;
+ The conditions set forth in the laws on residential housing and on real estate business are complied with in the case of transfer of a residential housing construction project or real estate project are complied with;
+ The conditions set forth in the written approval for investment guidelines or the investment registration certificate or in accordance with other relevant regulations of law (if any) are complied with;
+ Upon transfer of an investment project, in addition to compliance with this Article, the state-owned enterprise shall comply with the Law on Management and Use of State Capital Invested in Manufacturing and Business Activities of Enterprises before making any adjustment to the investment project.
– If the conditions for transfer set forth in Clause 1 of Article 47 are satisfied, the investor shall follow the procedures for transferring the entire investment project in part or in full as follows:
+ In the case of an investment project in which the investor has been approved in accordance with Article 29 of Law on Investment and the investment project has been issued with an investment registration certificate, the investor shall follow procedures for adjusting the investment project as prescribed in Article 41 of Law on Investment;
+ For an investment project other than that prescribed in Point a of this Clause, the transfer of the investment project or transfer of asset ownership to the investor receiving the investment project shall be carried out in accordance with the civil law, the law on enterprises, the law on real estate business and other regulations of law.
Suspension of investment projects
– When suspending an investment project, the investor must notify the investment registration authority in writing If the project has to be suspended in a force majeure event, the State shall allow the investor to be exempt from paying land rents or reduce land levies for the suspension period with a view to remedy consequences caused by the force majeure event.
– The investment authority shall decide to suspend an investment project in part or in full in the following cases:
+ To protect sites/monuments, relics, antiques or national treasures in accordance with the Law on Cultural Heritage;
+ To rectify a violation of the law on environmental protection at the request of the environment authority;
+ To take measures to ensure occupational safety at the request of the labor authority;
+ Pursuant to a judgment or decision of a court or an arbitral award;
+ The investor fails to adhere to the written approval for investment guidelines or the investment registration certificate and recommits administrative violations after incurring penalties.
– The Prime Minister shall decide to suspend a project in part or in full if the project execution is detrimental or potentially detrimental to national defense and security at the request of the Ministry of Planning and Investment.
Termination of investment projects
– An investor shall terminate its/his/her investment activities and/or investment project in the following cases:
+ The investor decides to terminate the project;
+ The project has to be terminated according to the conditions set out in the contract or charter of the enterprise;
+ The project duration is over.
– The investment registration authority shall terminate an investment project in part or in full in the following cases:
+ The investor fails to overcome the difficulties that lead to project suspension in the cases mentioned in Clause 2 and Clause 3 Article 47 of Law on Investment;
+ The investor is no longer permitted to keep using the investment location and fails to complete the procedures for change of investment location within 06 months from the date on which the investor is no longer permitted to use the investment location, except for the case specified in Point d of this Clause;
+ 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;
+ Land reserved for the investment project is expropriated by the State for the reason that the land is not used or the land use is delayed in accordance with the law on land;
+ The investor fails to pay the deposit or obtain a bank guarantee as prescribed by law if project execution security is required;
+ The investor conducted the investment activities on the basis of a sham civil transaction in accordance with the civil law;
+ Pursuant to a judgment or decision of a court or an arbitral award;
– Regarding a project subject to approval for its investment guidelines, the investment registration authority shall terminate the investment project after obtaining the opinion of the authority granting approval for investment guidelines.
– The investor shall itself liquidate the investment project in accordance with the law on liquidation of assets upon termination of the investment project, except for the case specified in Clause 5 of Article 48 Law on Investment
– The handling of the land use rights and assets on the land upon termination of the investment project shall comply with the law on land and other relevant regulations of law.
– The investment registration authority shall decide to revoke the investment registration certificate if the investment project is terminated in accordance with Clause 2 of Article 48 Law on Investment, except for the case of termination of part of the investment project.
Establishment of operating office of foreign investor to business cooperation contract
– A foreign investor to a business cooperation contract may establish an operating office in Vietnam to execute the contract. The location of the operating office shall be decided by the foreign investor depending on the requirements for contract execution.
– The operating office of a foreign investor to a business cooperation contract has its own seal; the foreign investor may open an account, hire employees, sign contracts and carry out business activities under the business cooperation contract and Certificate of registration of operating office.
– The foreign investor to the business cooperation contract shall submit the application for registration of operating office to the investment registration authority of the area where the operating office is intended to be located.
– An application consists of:
+ An application form which specifies the name and address of the representative office in Vietnam (if any) of the foreign investor to the business cooperation contract; name and address of the operating office; contents, duration, and operating scope of the operating office; full name, residence, ID Card or Citizen ID Card number or passport number of the head of the operating office;
+ The decision of the foreign investor to the business cooperation contract on establishment of an operating office;
+ A copy of the decision to appoint the head of the operating office;
+ A copy of the business cooperation contract.
– Within 15 working days from the receipt of the application prescribed in Clause 4 of Article 49 Law on Investment, the investment registration authority shall issue the Certificate of registration of operating office to the foreign investor to the business cooperation contract.
Shutdown of operating office of foreign investor to business cooperation contract
– Within 07 working days from the day on which the decision to shut down the operating office is issued, the foreign investor shall send a folder to the investment registration authority of the area where the operating office is located.
– The folder consists of:
+ A decision to shut down the operating office in the case of shutdown of the operating office ahead of schedule;
+ A list of creditors and amount of debts which have been paid;
+ A list of employers and their benefits provided;
+ A tax authority’s certification of fulfillment of tax liability;
+ A social security authority’s certification of fulfillment of social insurance obligations;
+ The certificate of operating office registration;
+ A copy of the investment registration certificate;
+ A copy of the business cooperation contract.
– Within 15 working days from the receipt of the application prescribed in Clause 2 of Article 49 Law on Investment, the investment registration authority shall issue the decision to shut down the operating office.
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Frequently asked questions
For a project subject to approval for its investment guidelines, the approval for investment guidelines shall be granted before the investor executes the investment project.
For a project subject to issuance of an investment registration certificate, the investor shall follow the procedures for issuance of the investment registration certificate before executing the investment project.
The investor shall pay a deposit or have a bank guarantee for assurance of investment project execution if the project uses land allocated or leased out by the State to allocate or lease out land or is permitted by the State to repurpose land
Conclusion: So the above is Execution of investment projects according to Viet Nam Law on Investment. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com
