Guidance on procedures for shutting down an investment project in Vietnam

Along with the opening to attract foreign investment; There are more and more investment projects in Vietnam. However, due to the impact of the epidemic; many projects facing difficulties are forced to transfer investment projects or stop operating investment projects. So, is the procedure for decommissioning an investment project complicated or not? To better understand this, today, LSX Lawfirm will give you an article about “Guidance on procedures for shutting down an investment project in Vietnam”, as follows:

Legal grounds

• Investment Law 2020

In which cases is it allowed to stop the operation of an investment project?

An investment project may be completely or partially stopped operating in the following specific cases:

State agencies decide to stop the operation of investment projects

In some cases, state agencies will issue decisions to stop all or part of an investment project, in order to:

Implement measures to ensure occupational safety at the request of the State body in charge of labor.

According to the judgment, the decision of the Court, arbitral award.

Protect relics, relics, antiquities, and national treasures in accordance with the Law on Cultural Heritage then.

Overcome violations of the law on environmental protection at the request of the state management agency in charge of the environment.

Because the investor does not comply with the content of approving the investment policy; the Investment certificate has been sanctioned for administrative violations but continues to violate.

If falling into one of these cases, the investment project is forced to stop operating; if they do not stop operating under the decision of the State, it will be fined according to the provisions of law.

The Prime Minister decided to suspend the operation of investment projects

The Prime Minister also has the authority to issue a decision to stop altogether or stop part of the operation of the investment project when the implementation of the investment project causes damage or is at risk of harming national defense and security at the request of the MPI.

The investor decides to stop operating the investment project

The shutdown of investment projects; Investors can also decide to stop operating on their own.

In case of shutdown due to force majeure, the investor is exempted from land rent by the State; reduce the land use fee during the shutdown period to overcome the consequences caused by force majeure.

When shutting down investment projects; investors prepare all documents and dossiers in accordance with the provisions of the Law on Investment 2020 and carry out the procedure for decommissioning the project.

Investment project characteristics

Firstly, An investment project during construction can be a short-term or long-term project.

And whether the execution time is long or short, they are finite. More specific:

The duration of operation of an investment project in an economic zone must not exceed 70 years.

The duration of operation of an investment project outside an economic zone must not exceed 50 years. Investment projects implemented in areas with difficult socio-economic conditions, areas with extremely difficult socio-economic conditions, or projects with large investment capital but slow capital recovery, longer but not more than 70 years.

Secondly, investment projects always have clear goals

No matter what field of investment project you build, how long it will take, how much it will cost, etc., it must have a clear purpose and specific goals.

The investment objective also one of the important contents shown in the investment project proposal submitted together with the application for a decision on investment policy. Therefore, in order to be approved for the project, the person who prepares the budget, the human resource team, and the investor must set specific goals in accordance with the project implementation process.

an investment project has a finite life

Thirdly, the investment project is transferable

An investor has the right to transfer all or part of an investment project to another investor when it meets the conditions specified in Article 45 of the Law on Investment 2014. Including:

– Not falling into one of the cases of termination of operation;

• Satisfy the investment conditions applicable to foreign investors in case the foreign investor receives the transfer of a project in a conditional investment industry or trade applicable to the foreign investor;
• Comply with the conditions prescribed by the law on land, the law on real estate business in case the project transfer associated with the transfer of land use rights;

– Conditions specified in the Investment Registration Certificate or other relevant laws (if any)

Procedures for decommissioning of investment projects

The specific steps are as follows:

Step 1: The investor shall notify in writing the Department of Planning and Investment of the shutdown of the investment project.

Then Step 2: Prepare documents and submit them to the Center for Public Administration to transfer to the Department of Planning and Investment.

Step 3: The Department of Planning and Investment receives the investor’s notice of shutdown of the investment project; and records the operational status of the investment project then.

Dossier of decommissioning of investment projects

The application for decommissioning an investment project is quite simple with the following documents:

Notice of decommissioning of investment projects (according to to form).

Authorization to suspend the operation of investment projects (if not self-implemented).

Minutes of the meeting decided to stop the operation of the investment project then.

What is the maximum duration of the investment project?

The operational duration of an investment project determined as follows:
Investment projects allocated or leased land by the State, but investors delayed in handing over land; the period of delay in handing over land by the State shall not included in the operation period; progress of investment projects.
The operation term of an investment project in an economic zone shall not exceed 70 years. Investment projects outside economic zones must not exceed 50 years. Investment projects in areas with difficult socio-economic conditions; areas with extremely difficult socio-economic conditions; or investment projects with large investment capital but slow capital recovery; the term of operation may be longer but not exceed 70 years.

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