Adjusting the target object for FDI company policy approval in Vietnam

The operation and business activities of FDI companies are constantly fluctuating and changing with the aim of expanding or contracting their production and business operations. This leads to changes in the content of the initial investment project objectives of the enterprise. For projects subject to investment policy approval, when adjusting objectives, procedures must be carried out by legal regulations. Hereinafter, Viet An Law Firm would like to provide clients with information related to adjusting the target object for FDI company policy approval in Vietnam.

When should investment project objectives be adjusted?

The modification of investment project objectives is implemented in the following cases:

• The company initiates new production and business activities associated with the implementation of an investment project;
• The company alters the business content within the registered investment project objectives;
• The company modifies the project objectives as required by relevant parties by legal provisions.

What procedures must be followed to adjust the target object for FDI company policy approval in Vietnam?

Case of an FDI company with an investment project that has already received investment policy approval

Under point a, clause 3, Article 41 of the Investment Law 2020, and clause 2, Article 43 of Decree 32/2021/ND-CP, for FDI companies with investment projects that have already received investment policy approval, when changing objectives stipulated in the investment policy approval document or supplementing objectives subject to investment policy approval, they must carry out procedures to amend the investment policy approval decision.

Based on the Decision approving the adjustment of investment policy, the investor shall carry out procedures to amend the Decision approving the investor (if any) or the Investment Registration Certificate (if any).

Case of requesting adjustment to an investment project leading to the project becoming subject to investment policy approval

Under clause 7, Article 41 of the Investment Law 2020, and clause 4, Article 43 of Decree 32/2021/ND-CP, in cases where the request to adjust investment project objectives that were not previously subject to investment policy approval leads to the investment project becoming subject to investment policy approval, the FDI company must carry out procedures for investment policy approval before adjusting the investment project. In this case, the authority approving the investment policy shall consider the adjusted contents to approve the investment policy.

Procedures for amending the investment policy approval decision

Competent authorities for amending the investment policy approval decision

• The authority competent to approve the investment policy shall have the authority to approve amendments to the investment policy;
• In cases where the proposed adjustment to the investment project leads to the project falling under the approval authority of a higher level, that level shall have the authority to approve amendments to the investment policy.

Receiving agency for applications

• For investment projects under the authority of the Prime Minister to approve investment policies, the FDI company shall submit 08 sets of documents to the Ministry of Planning and Investment.
• For investment projects under the authority of the Provincial People’s Committee to approve investment policies, the FDI company shall submit 04 sets of documents to the Investment Registration Agency.
• For investment projects under the authority of the Management Board of Industrial Parks, export processing zones, high-tech parks, and economic zones to approve investment policies, the FDI company shall submit 04 sets of documents to the Management Board of Industrial Parks, export processing zones, high-tech parks, and economic zones.

Documents for investment project adjustment

Under clause 1, Article 44 of Decree 31/2021/ND-CP, the dossier includes:

• Written request for investment project adjustment according to Form A.I.11.h issued with Circular 25/2023/TT-BKHDT;
• Report on the implementation status of the investment project up to the time of adjustment according to Form A.I.12 issued with Circular 03/2021/TT-BKHDT;
• Minutes of the meeting and decision of the investor regarding the adjustment of investment project objectives;
• Copy of the enterprise registration certificate;
• Financial statements for the last 02 years of the investor; financial support commitment from the parent company; financial support commitment from financial institutions; guarantee of the investor’s financial capacity; other documents proving the investor’s financial capacity;
• Investment project proposal including the following main contents: investor or form of investor selection, investment objectives, investment scale, etc.
• Proposal for land use needs; in case the project does not request the State to allocate land, lease land, or permit change of land use purpose, submit a copy of the site lease agreement or other documents confirming the investor’s right to use the site to implement the investment project;
• Explanation of technology use for projects using technologies on the List of technologies restricted from transfer;
• BCC contract for investment projects in the form of BCC contracts;
• Authorization document in case of authorizing other organizations or individuals to carry out procedures.

Application processing procedure

For investment projects under the authority of the Prime Minister to approve investment policies:

• Within 03 working days from the date of receiving a valid dossier, the Ministry of Planning and Investment shall send the dossier to competent state agencies to seek opinions on the contents of the investment project adjustment;
• Within 15 days from the date of receiving a valid dossier, the consulted agencies shall provide opinions on the contents of the project adjustment within their state management scope;
• Within 35 days from the date of receiving a valid dossier, the Ministry of Planning and Investment shall prepare an appraisal report on the contents of the investment project adjustment to submit to the Prime Minister;
• Within 05 working days from the date of receiving the appraisal report from the Ministry of Planning and Investment, the Prime Minister shall decide on approving the adjustment of the investment policy.

For investment projects under the authority of the Provincial People’s Committee to approve investment policies:

• Within 03 working days from the date of receiving a valid dossier, the Investment Registration Agency shall send the dossier to competent state agencies to seek opinions on the contents of the investment project adjustment;
• Within 15 days from the date of receiving a valid dossier, the consulted agencies shall provide opinions on the contents of the project adjustment within their state management scope;
• Within 25 days from the date of receiving a valid dossier, the Investment Registration Agency shall prepare an appraisal report on the contents of the investment project adjustment to submit to the Provincial People’s Committee;
• Within 07 working days from the date of receiving the dossier and appraisal report from the Investment Registration Agency, the Provincial People’s Committee shall decide on approving the adjustment of the investment policy.

For investment projects under the authority of the Management Board of industrial parks, export processing zones, high-tech parks, and economic zones to approve investment policies:

• Within 03 working days from the date of receiving a valid dossier, the Management Board of industrial parks, export processing zones, high-tech parks, and economic zones shall send the dossier to competent state agencies to seek opinions on the contents of the investment project adjustment;
• Within 15 days from the date of receiving a valid dossier, the consulted agencies shall provide opinions on the contents of the project adjustment within their state management scope;
• Within 25 days from the date of receiving a valid dossier, the Management Board of industrial parks, export processing zones, high-tech parks, and economic zones shall decide on approving the adjustment of the investment policy.

Some notes when adjusting the target object for FDI company policy approval in Vietnam

• FDI companies need to determine whether adjusting objectives and scale will affect the investment capital. As the initial investment capital will be used to lease the project site, construct facilities, and implement registered objectives, adding or removing investment objectives will affect the total investment capital;
• For manufacturing projects, when adding objectives, FDI companies must also consider whether the current project site ensures sufficient space and area to implement additional objectives and new production scale, as in many cases, additional workshops and facilities may need to be constructed, which relates to explaining the capital source and project implementation site;
• Adjusting objectives may also lead to adjustments in the project implementation schedule, as according to regulations, the project implementation schedule content includes the schedule for putting objectives into operation. Therefore, FDI companies must anticipate these schedules.

For detailed consultation on adjusting the target object for FDI company policy approval in Vietnam, please contact Viet An Law Firm for the best support!