For the Guarantee for execution of investment projects in Vietnam, LSX Lawfirm will give you an article related to this issue, as follows:
Legal grounds
Law on investment 2020
Decree No. 31/2021/ND-CP
What does investment project means?
Accordingly, from a management perspective, an investment project is a tool to manage the use of capital, materials and labor to create financial, economic and social results in a long time. A project is a series of linked activities designed to achieve certain results within a defined budget and time.
Related article: What is an investment certificate?
Adjustment to the investment project in Vietnam
Rules for execution of investment projects in Vietnam
Guarantee for execution of investment projects in Vietnam
Firstly
The investor shall pay a deposit or have a bank guarantee for investment project execution if the project uses land allocated or leased out by the State or the State permitted to repurpose land, except for the following cases:
- The investor is the successful bidder for the right to use a land area that the State allocated for land levy or leased out by the State for a lump-sum rent.
- They 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.
Then noted
Except for the case specified in the above 4 cases, the investor must deposit or have a guarantee from a credit institution or foreign bank branch established under Vietnamese law (hereinafter collectively referred to as the foreign bank branch) credit on the escrow obligation to secure the implementation of an investment project allocated or leased land by the State or permitted to change the land use purpose.
In case of issuing a guarantee, the credit institution shall pay the deposit payable by the investor in the case specified as follows:
The guarantee amount that is yet to be refunded shall be paid to the state budget as prescribed by law in the following cases:
a) They do not put into operation the project on the schedule specified in the decision on approval for investment guidelines or investment registration certificate without the competent authority’s permission for adjusting the schedule as prescribed in the Law on Investment and Decree No. 31/2021/ND-CP.
b) The project terminated as prescribed in Clause 2 Article 48 of the Law on Investment, except for the case mentioned in Point a Clause 2 Article 47 of the Law on Investment.
In addition, the contract of guarantee for deposit payment obligation between the credit institution and the investor shall signed and executed pursuant to regulations of law on civil matters; credit; bank guarantee and relevant regulations of law.
Secondly
We 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; they shall pay amount of deposit and returned in each phase of execution of the investment project; except for the case in which they do not return the deposit.
Related questions about “Guarantee for execution of investment projects in Vietnam”
Are there any restrictions for foreign investors when investing in Vietnam?
Then, investors meet the investment conditions of WTO commitment; international treaties on investment that Vietnam has signed or acceded to and domestic laws.
Who do regard to the investment projects located therein?
Then, management boards of industrial parks, export-processing zones, hi-tech zones and economic zone shall issue; adjust and revoke investment registration certificates with regard to the investment projects located therein
Are foreign investors’ nationality restricted when contributing capital in Vietnamese companies?
Currently, investor nationality no longer restricted from receiving investment; except for a few nationalities who are not receive investment because it affects national defense; security; politics and social order, etc.
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