Project Implementation in Vietnam

Implementation of new investment projects

1.  Implementation of projects with lease and assignment of land

For investment projects requiring the use of land, investors shall contact competent land management agencies of the localities where projects are to be executed in order to carry out land assignment or land lease procedures. The process and procedures for land assignment and land lease shall comply with the provisions of land law.

Where investors have been handed over the land but fail to proceed with the projects within the prescribed time limit or use land for improper purposes, they shall have the land recovered under the provisions of the Land Law and have their investment certificates withdrawn.

2.  Implement projects with ground preparation for construction sites

In case of the State’s land recovery under the provisions of land law, competent state agencies shall be in charge of land recovery, compensation and ground clearance before assigning or leasing and to investors. The recovery of land, payment of compensations and ground clearance shall comply with the provisions of land law.

If the investors re-rent land from land users that have been assigned or leased land by the State, they shall have to organize the compensation and ground clearance by themselves.

Where investors have reached agreement with land users on compensation and ground clearance but the latter have not yet fulfilled their obligations as agreed upon, the competent People’s Committees of the localities where investment projects are to be executed shall have to organize ground clearance before handing over the sites to investors in accordance with the provisions of law.

For investment projects compatible with the land use planning already approved by competent state agencies, investors may be transferred with or rent land use rights, receive capital contributed with land use rights by economic organizations, households or individuals in accordance with the provisions of land law without having to fill in land-recovery procedures.

3.  Execution of investment projects involving the exploitation and use of natural resources and minerals

Investment projects involving the exploitation and use of natural resources and minerals shall have to comply with the provisions of law on natural resources and minerals. Investors have to apply for a certificate of resource exploration if required.

4.  Execution of investment projects involving construction

For investment projects involving construction, the formulation, evaluation and approval of technical designs, cost estimates and total cost estimates shall comply with the provisions of construction law. Investors shall take responsibility for the work quality and environmental protection.

5.  Hire of management service

Investors are entitled to hire individuals, organizations to manage their investment and investment activities as required through signing contracts between investors and individuals or organizations. Management fees are agreed and decided by the involved parties and calculated as management fees of enterprises.

6.  Sale of products in the Vietnamese market

Investors may directly or through agents sell their products in Vietnam without being subject to any restriction on geographical areas; may act as sale agents for other organizations or individuals that have similar products made in Vietnam. Investors shall themselves decide on the selling prices of products they make or services they provide; for products and services subject to price control by the State, their selling prices shall comply with the price frame promulgated by competent state agencies.

7. Open a bank account

Investors may open foreign-currency accounts and Vietnam dong accounts at banks licensed to operate in Vietnam. Where it is approved by the State Bank of Vietnam, investors may open accounts at foreign banks. The opening, use and closure of accounts at domestic and foreign banks shall comply with regulations of the State Bank of Vietnam.

8.  Insurance

Investors shall get property insurance and other kinds of insurance on the basis of insurance policies signed with insurance business enterprises operating in Vietnam in accordance with the provisions of insurance law.

Amendment to the investment projects

When there is a need to adjust investment projects regarding their objectives, scales, locations, forms, capital and duration of project implementation, the investors proceed necessary procedures for the amendment of investment certificate.

Projects which are not required to proceed procedures for registration of necessary amendments or evaluation of amendments are as follows

• Projects without amendments to objectives, scales, locations, capital, approaches and duration

• Domestic invested projects which have investment capital of less than 15 billion Vietnam dong after the adjustment and which do not belong to categories of investment with conditions.

• Domestic invested projects which have investment capital of less than 300 billion Vietnamese dong  after the amendments and which do not have any changes in objectives and locations.

2.  Projects which are required for investment project amendment are as follows:

Projects after the amendment to objectives, locations, capital, approaches and duration having the following features:

• Foreign invested projects which have investment capital of less than 300 billion Vietnamese dong after the amendment and which do not belong to the investment categories with conditions

• Domestic invested projects which do not belong to categories of investment with conditions or which belong to the categories of investment with conditions without any changes in objectives and still meet demands of investment conditions applied to these projects.

The application for project amendments includes:

• Registration document with verification of amendment contents to investment projects;

• Copy of the investment certificate;

• Amendments or modifiations of joint venture contracts or cooperative agreement or charters of enterprises (for foreign invested projects)

State management agencies in charge of investment certificate granting shall issue the investment certificate (for cases which have not received investment certificate) or adjust the investment certificate within 15 working days after receiving complete and valid dossiers.

3.  For projects which require evaluation of the required amendment to investment projects

Projects which belong to the following categories after having amendments to objectives, scales, locations, capital, approaches and duration:

• Foreign invested projects belong to the categories of requiring an evaluation for granting an investment certificate after the amendment

• Domestic invested projects belong to categories of investment with conditions after the amendment, excepts for cases belonging to categories of registration for investment amendment

The application of amendment evaluation includes:

• A written request for amendment to the investment projects;

• Reasons to amendments;

• Changes compared to the current projects;

• Report on status of projects at the time of requiring for an amendment;

• A copy of investment certificates;

• Amendments or modifications of joint venture contracts or business cooperation contracts (for projects with foreign capital)

State management agencies in charge of investment certificate granting shall grant a certificate for evaluation of amendment contents and issue the investment certificate (for cases which have not received investment certificate) or adjust the investment certificate within 30 working days after receiving complete and valid dossiers.

Project transfer

Investors have rights to transfer their projects to other investors with the following conditions:

• Ensure all requirements as promulgated in the Business law and other associated legal documents

• Ensure appropriate ration and conditions in line with international treaties which Vietnam is a member to

• Transfer of capital in kind of lands must be in line with the state regulation on land usage and other associated legal documents.

In cases of transferring projects owned by economic actors which is not relating to the business termination of transferors, the transfer of projects shall comply with conditions and procedures of capital transfer as mentioned above.

In cases of transferring projects which is relating to termination of investment activities of economic actors, the transfer shall comply with regulations on conditions and procedures of merging or purchasing enterprises or business from the prior investors.

In cases of transferring projects which is relating to termination of investment activities of economic actors (transferring parties) and the receiving parties will establish new business in order to implement projects, the transferring procedures are undertaken following the state regulations.

The application for project transfer includes:

• A written document registered for project transfer;

• Project transfercontracts ;

• Written documents on legal status of the receiving party;

• A report on status of project implementation.

Within 10 working days after receiving full valid dossiers, the competent investing granting office shall grant new certificate (for cases which have not had investment certificate) or adjust the investment certificate.

Temporary cancellation, cessation of projects, withdrawal of investment certificates

When temporarily ceasing their investment projects or spacing the project implementation speed influences the project timeline, investors must notify in writing such to state agencies in charge of investment in terms of reasons and duration for temporary cease of projects within 15 working days before the temporary cancellation or cease of projects. Investors are entitled to consideration for exemption or reduction of land rental fees during the project cease.  When the investors re-start their operations, they shall notify the competent state agencies in writing.

In cases of the state office for granting investment certificate do not approve the cease or spacing duration of the projects, investors shall be replied in writing within 15 working days since the receipt of notification of investors.

The investment certificates shall be withdrawn if after 12 months receiving investment certificate, the investors do not implement or are not able to implement the projects following the agreed timeline and fail to provide appropriate reasons to this delay.

Termination of activities and project liquidation

Termination of operation of investment projects shall occur in the following cases

• Upon the expiration of the operation duration stated in the investment certificate;

• According to the conditions for termination of operation stipulated in the contract, the enterprise’s charter or the investor’s agreement or commitment on the project-execution schedule.

• The investor shall decide on termination of operation of the project.

• Under decision of the state agency in charge of investment or under court judgments or decisions or arbitral awards, in case of violation of law.

The state agencies of investment certificate grant shall have rights to terminate operation of projects in the following cases

• Projects granted with investment certificate can not implement activities after 12 months of being granted with certificate or are slow in implementation for 12 months compared with the project implementation timeline as regulated in the investment certificate, except for cases of being approved for temporary cease or spacing the project timeline

• Projects which seriously violate regulations which require termination of operations.

In cases of following arbitral awards or decisions made by courts or arbitrators to terminate of project operation since the project seriously violate regulations or laws, the state agencies of investment certificate grant shall terminate the project operations based on decisions made by courts or arbitrators.

Decisions on termination of investment shall be sent to investors and filed in the state office of investment certificate grant. The state office of investment certificate grant based on the decision on project termination to withdraw the investment certificate and notify associated agencies.

If investment project is terminated, investors shall notify state office of granting investment certificate to require for project liquidation procedures and return investment certificate as specified as follows:

• In cases of project liquidation without closing the business of investors, the liquidation shall be carried out following regulation or law on asset and contracts liquidations.

• In cases of project liquidation together with closing of business of investors, investors shall process liquidation procedures as regulated by law on enterprises and other associated regulations.

Duration for project liquidation shall be not beyond 6 months since the date of termination of investment project. In cases of being approved by the state competent agencies, investors can lengthen timeline of project liquidation to 12 months at maximum. After the project liquidation, investors shall notify the state office of granting investment certificate and return investment certificate. During process of project liquidation, if business or enterprises are not able to pay all debts, project liquidation shall be processed following regulations and laws on bankruptcy.

Tags: Vietnam investment consulting, Vietnam investment process