Approval for investment guidelines according to Viet Nam Law on Investment

In many cases, the investment project and the investor implementing the project must be approved by the competent state agency. This helps to ensure that investment activities are implemented effectively in accordance with the policy of socio-economic development of the state. Let’s join Lawyer X to find out about this issue through the following situation: “Hello, lawyer! My company has a large investment project that requires approval from competent agency. I would like to find out about the current regulations on approval for investment guidelines? How are dossiers, procedures regulated? Thanks for your advice! “

Legal grounds

2020 Law on Investment

What is approval for investment guidelines?

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.

“Approval for investment guidelines” means a competent authority approving the objectives, location, scale, schedule and duration of a project; investor or form of selection of investor and special mechanisms or special policies (if any) to execute an investment project.

Selecting investors to execute investment projects

– The investor selection shall be carried out by:

+ holding land use right auction in accordance with regulations of law on land; or

+ bidding to select an investor in accordance with regulations of law on bidding; or

+ approving an investor as prescribed in Clauses 3 and 4 of Article 29 Law on Investment

– The method of investor selection mentioned in Points a and b Clause 1 of Article 29 Law on Investment shall be adopted after the approval for investment guidelines is granted, excepts for the investment projects not subject to approval for investment guidelines.

– If a land use right auction is held but only one person register for participation in the auction or the auction is unsuccessful in accordance with regulations of law on land or if bidding is conducted to select investors but only one investor registers for participation in the bidding in accordance with regulations of law on bidding, the competent authority shall carry out the procedures for approving an investor if the investor satisfies the conditions prescribed by relevant law.

– For an investment project subject to approval for its investment guidelines, the competent authority shall grant approval for both investment guidelines and investor without holding a land use right auction or bidding to select investor in the following cases:

+ The investor has the land use rights, except for the case where the State expropriates land for national defense and security purposes or for socio-economic development in the national or public interest in accordance with the law on land;

+ The investor receives the agricultural land use rights, receives the agricultural land use rights as stakes or leases the agricultural land use rights to execute an investment project on non-agricultural production or business and the land is not subject to land expropriation by the State in accordance with the law on land;

+ The investor executes the investment project in an industrial park or hi-tech zone;

+ Other cases not subject to an auction or bidding in accordance with law.

The National Assembly’s power to approve investment guidelines

The National Assembly shall grant approval for investment guidelines of the following investment projects:

– Investment projects that exert great effects or potentially serious effects on the environment, including:

+ Nuclear power plants;

+ Projects that require repurposing of special-use forests, headwater protection forests or border protection forests of at least 50 hectares; of sand-fixing and windbreak coastal forests or protection forests for wave prevention of at least 500 hectares; or production forests of at least 1,000 hectares;

– Investment projects that require repurposing of land meant for wet rice cultivation during with 02 or more crops of at least 500 hectares;

– Investment projects that require relocation of 20,000 people or more in mountainous areas or 50,000 people or more in other areas;

– Investment projects that require application of a special mechanism or policy that needs to be decided by the National Assembly.

The Prime Minister’s power to approve investment guidelines

Except for the investment projects mentioned in Article 30 of Law on Investment, the Prime Minister shall grant approval for investment guidelines of the following investment projects:

– Investment projects regardless of capital sources in any one of the following cases:

+ Investment projects that require relocation of 10,000 people or more in mountainous areas or 20,000 people or more in other areas;

+ Investment projects on construction of: airports and aerodromes; runways of airports and aerodromes; international passenger terminals; cargo terminals of airports and aerodromes with a capacity of at least 1 million tonnes per year;

+ New investment projects on passenger air transport business;

+ Investment projects on construction of ports and wharves of special seaports; ports and wharves in which investment is at least VND 2,300 billion within the category of Class I seaports;

+ Investment projects on petroleum processing;

+ Investment projects which involve betting and casino services, excluding business in prize-winning electronic games for foreigners;

+ Projects on construction of residential housing (for sale, lease or lease purchase) and urban areas that use at least 50 hectares of land or less than 50 hectares of land but with a population of at least 15,000 people in an urban area; or that use at least 100 hectares of land or less than 100 hectares of land but with a population of at least 10,000 people in a non-urban area; or investment projects regardless of the area of land used or population within the safety perimeter of relics recognized by the competent authority as the national and special national relics;

+ Investment projects on construction and operation of infrastructure in industrial zones and export processing zones.

– Investment projects of foreign investors in the following fields: provision of telecommunications services with network infrastructure; afforestation; publication, press;

– Investment projects which at the same time fall within the power of at least two provincial People’s Committees to grant approval for investment guidelines;

– Other investment projects subject to approval for their investment guidelines or subject to issuance of decisions on investment guidelines by the Prime Minister as prescribed by law.

The power of provincial People’s Committees to approve investment guidelines

– Except for the investment projects set out in Articles 30 and 31 of Law on Investment, the provincial People’s Committees shall grant approval for investment guidelines of the following investment projects:

+ Investment projects that request the State to allocate or lease out land without auction or bidding for or receipt of land use rights, and investment projects that request permission to repurpose land, except for cases of land allocation, land lease or permission for land repurposing by family households or individuals not subject to the written approval by the provincial People’s Committee as prescribed in the law on land;

+ Projects on construction of residential housing (for sale, lease or lease purchase) and urban areas that use at least 50 hectares of land or less than 50 hectares of land but with a population of at least 15,000 people in an urban area; or that use at least 100 hectares of land or less than 100 hectares of land but with a population of at least 10,000 people in a non-urban area; or investment projects regardless of the area of land used or population within a restricted development area or within an historic inner area (determined in accordance with urban area planning projects) of a special urban area;

+ Investment projects on construction and operation of golf courses;

+ Investment projects of foreign investors and foreign-invested business entities executed on islands or in border or coastal communes; in other areas affecting national defense and security.

– The investment guidelines of the investment projects in Points a, b and d Clause 1 of this Article executed in industrial parks, export-processing zones, hi-tech zones and economic zones in conformity with planning approved by competent authorities shall be approved by management boards of such industrial parks, export-processing zones, hi-tech zones and economic zones.

Applications for and contents of appraisal of requests for investment guideline approval

– An application for approval for investment guidelines of an investment project proposed by an investor includes:

+ An application form for execution of the investment project, including a commitment to incur all costs and risks if the project is not approved;

+ A document concerning the legal status of the investor;

+ Document(s) proving the financial capacity of the investor including at least one of the following documents: the investor’s financial statements for the last two years; commitment of a parent company to provide financial support; commitment of a financial institution to provide financial support; guarantee for the investor’s financial capacity; other document proving the investor’s financial capacity;

+ Proposal for the investment project including the following main contents: investor or method of investor selection, investment objectives, investment scale, investment capital and plan for raising capital, location, duration and schedule of the investment project, information about the current use of land in the location of the project and proposed demand for land use (if any), demand for labor, proposal for investment incentives, impact and socio – economic efficiency of the project and preliminary assessment of environmental impact (if any) in accordance with the law on environment protection.

If the law on construction requires formulation of a pre-feasibility study report, the investor is entitled to submit the pre-feasibility study report instead of a proposal for the investment project;

+ If the project does not require the State to allocate or lease out land or to permit land repurposing, a copy of the document regarding the land use rights or other document identifying the right to use the location for execution of the investment project is required to be submitted;

+ Contents of the explanation for the technology to be used in the investment project if the project requires appraisal and collection of opinions on the technology in accordance with the Law on Technology Transfer;

+ The business cooperation contract if the investment project is executed under a business cooperation contract;

+ Other documents relating to the investment project, and requirements on the eligibility and capacity of the investor in accordance with law (if any).

– An application for approval for investment guidelines of an investment project prepared by a competent authority includes:

+ An application for approval for investment guidelines;

+ Proposal for the investment project including the following main contents: investment objectives, investment scale, investment capital and plan for raising capital, location, duration and schedule of the investment project; information about the current use of land in the location of the project, conditions for land expropriation if the project is subject to land expropriation, expected demand for land use (if any); preliminary assessment of environmental impact (if any) in accordance with the law on protection of the environment protection; expected method of investor selection and conditions applicable to the investor (if any); and special regimes and policies (if any).

If the law on construction requires formulation of a pre-feasibility study report, the competent authority is entitled to submit the pre-feasibility study report instead of a proposal for the investment project.

– Contents of appraisal of the request for investment guideline approval include:

+ Assessment of the conformity of the investment project with national planning, regional planning, provincial planning, urban planning and special economic – administrative unit planning (if any);

+ Assessment of the demand for land use;

+ Preliminary assessment of the socio-economic efficiency of the project; and preliminary assessment of environmental impact (if any) in accordance with the law on environment protection;

+ Assessment of investment incentives and conditions for enjoying investment incentives (if any);

+ Assessment of the technology to be used in the investment project if the project requires appraisal and collection of opinions on the technology in accordance with the Law on Technology Transfer;

+ Assessment of conformity of the investment project with the objectives and orientation for urban development, and residential housing development programs and plans; preliminary plan for phasing of investment with a view to synchronism assurance; preliminary structure of residential housing products and provision of land for social residential housing development; preliminary plan for investment in construction and management of urban infrastructure inside and outside the project in the case of a project on construction of residential houses and urban areas.

– Contents of appraisal of the request for both investment guideline approval and investor approval:

+ The contents specified in Clause 3 of Article 33 Law on Investment

+ The ability to satisfy the conditions for land allocation or land lease in the case of land allocation or land lease without auction of the land use right or bidding for investor selection; the ability to satisfy the conditions for land repurposing if the project requires land repurposing;

+ Assessment of satisfaction of market access conditions applied to foreign investors (if any);

+ Other conditions applicable to the investor in accordance with relevant regulations of law.

Procedures for investment guideline approval by the National Assembly

– The application specified in Clauses 1 and 2 Article 33 of Law on Investment shall be submitted to the Ministry of Planning and Investment.

– Within 15 days from the date on which the sufficient application is received, the Ministry of Planning and Investment shall submit a report to the Prime Minister and request establishment of a State Appraisal Council.

– Within 90 days from the date of its establishment, the State Appraisal Council shall organize appraisal of the application and prepare an appraisal report including the contents set out in Article 33 of Law on Investment, then submit it to the Government.

– At least 60 days before the opening of the meeting of the National Assembly, the Government shall prepare an application for investment guideline approval and submit it to the National Assembly’s agency presiding over validation.

– The application for investment guideline approval includes:

+ The Government’s application form;

+ The application mentioned in Clause 1 of 34 Law on Investment

+ The State appraisal council’s appraisal report;

+ Other relevant documents.

– Contents of validation of the request for investment guideline approval include:

+ Fulfillment of the criteria for determining that the investment project is subject to approval for its investment guidelines by the National Assembly;

+ Necessity of executing the investment project;

+ Conformity of the investment project with national planning, regional planning, provincial planning, urban planning and special economic – administrative unit planning (if any);

+ Objectives, scale, location, duration, execution schedule of the investment project, demand for land use, land clearance and relocation plan, options to select primary technologies, and solutions for environmental protection;

+ Capital investment and capital sources;

+ Assessment of socio-economic efficiency, national defense, security assurance and sustainable development of the investment project;

+ Special policies and mechanisms; investment incentives, investment assistance and conditions for application thereof (if any).

– The Government and relevant organizations or individuals shall provide sufficient information and documents serving validation; provide explanation for the project contents at the request of the National Assembly’s agency in charge of validation.

– The National Assembly shall consider passing a Resolution on approval for investment guidelines, which consists of the contents prescribed in Clause 1 Article 3 of Law on Investment.

– The Government shall elaborate on the procedures for appraisal by the State Appraisal Council.

Procedures for investment guideline approval by the Prime Minister

– The application specified in Clauses 1 and 2 Article 33 of Law on Investment shall be submitted to the Ministry of Planning and Investment.

– Within 03 working days from the date on which the sufficient application is received, the Ministry of Planning and Investment shall request relevant regulatory agencies in writing to give their opinions about the contents specified in Article 33 of Law on Investment.

– Within 15 days from receipt of the written request for opinions, the requested agencies shall send their appraisal opinions on the contents under their management to the Ministry of Planning and Investment.

– Within 40 days from the receipt of the application, the Ministry of Planning and Investment shall appraise it and prepare an appraisal report including the contents specified in Article 33 of Law on Investment, and then submit it to the Prime Minister for investment guidelines approval.

– The Prime Minister shall consider granting investment guideline approval comprising the contents set out in Clause 1 Article 3 of Law on Investment.

– Regarding the investment project specified in Clause 3 Article 31 of Law on Investment, the Prime Minister shall appoint an investment registration authority of a province or central-affiliated city to issue an investment registration certificate to the entire project.

– The Government shall elaborate procedures for appraising the investment projects whose investment guidelines are approved by the Prime Minister.

Procedures for investment guideline approval by provincial People’s Committees

– The application specified in Clauses 1 and 2 Article 33 of Law on Investment shall be submitted to the investment registration authority.

Within 35 days from the receipt of the application, the investment registration authority shall notify results to the investor.

– Within 03 working days from the date on which the sufficient application is received, the investment registration authority shall request relevant regulatory agencies in writing to give their opinions about the contents specified in Article 33 of Law on Investment to.

– Within 15 days from receipt of the written request for opinions, the requested agencies shall send their appraisal opinions on the contents under their management to the investment registration authority.

– Within 25 days from the receipt of the application, the investment registration authority shall prepare an appraisal report with the contents prescribed in Article 33 of Law on Investment and submit it to the provincial People’s Committee.

– Within 07 working days from the receipt of the application and the appraisal report, the provincial People’s Committee shall grant the investment guideline approval, and provide a written explanation in the case of refusal.

– The provincial People’s Committee shall consider granting investment guideline approval comprising the contents set out in Clause 1 Article 3 of Law on Investment.

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