During the implementation of an investment project, investors have the right to adjust the project objectives, assign part or the entirety of the investment project, merge projects, or divide a project into multiple projects. They may also use land use rights and assets on land associated with the investment project to contribute capital to establish enterprises, engage in business cooperation, or other relevant activities, following legal provisions. So, what is the procedure to adjust investment projects in Vietnam? Viet An Law Firm will now clarify this matter for our clients.
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What procedures are required for adjusting an investment project?
According to Article 41 of the Law on Investment 2020, when adjusting an investment project, investors should take note of the following procedures:
Procedure for adjusting Investment Registration Certificate in Vietnam
Investors must follow the procedure for amending the Investment Registration Certificate in cases where the project adjustment results in changes to the contents of the Investment Registration Certificate. The following project changes necessitate such amendments:
The name of the investment project.
The investor.
The location of the investment project, and the land area used.
The objectives and scale of the investment project.
The investment capital of the project (including both investor contributions and mobilized capital).
The duration of the project.
The implementation schedule of the project, which includes:
The schedule for capital contribution and mobilization;
The schedule for meeting the project’s primary objectives, and, in cases where the project is divided into phases, the schedule for each phase.
Procedure for approving adjustments to the investment policy
Investors whose projects have been approved for investment policy must complete the procedure for approving adjustments to the investment policy if they fall under one of the following circumstances:
Changes to the objectives specified in the initial investment policy approval document or the addition of objectives subject to investment policy approval;
Changes to the scale of the land area by more than 10% or 30 hectares, or changes to the project location;
Changes to the total investment capital by 20% or more, affecting the scale of the project;
Extension of the project’s implementation schedule, where the total project time exceeds 12 months beyond the originally approved schedule;
Adjustments to the project’s operational duration;
Changes to the technology that was assessed or reviewed during the investment policy approval process;
Changes to the investor, provided that the project has already been approved for investment policy and before the project’s operation or changes to the conditions for investors (if applicable).
Procedure for approving investment policy
In cases where an adjustment to the investment project results in the project falling under the scope of investment policy approval, the investor must complete the procedure for investment policy approval before adjusting the project.
Adjust investment projects in Vietnam procedure
In this article, Viet An Law Firm will focus on the procedure for amending the Investment Registration Certificate.
Accordingly, investors should follow these steps:
Step 1: Preparation of the application for amending the investment registration certificate
Investors should prepare the necessary documentation to amend the project. Investors can contact Viet An Law Firm for guidance on how to quickly and accurately prepare the required documents.
The typical documentation for amending the Investment Registration Certificate includes:
A written request for amendment of the Investment Registration Certificate, using Form A.I.11.h as prescribed in Circular No. 25/2023/TT-BKHĐT.
A report on the status of project implementation up to the time of the amendment;
A resolution and a certified copy of the minutes of the meeting of the Members’ Council/General Meeting of Shareholders/Owner of the economic organization executing the investment project regarding the amendment of the investment project;
An explanation for the proposed amendment of the investment project;
A certified copy of the Decision on approval (or adjustment) of the investment policy or Decision on approval (or adjustment) of the investor or Decision on approval (or adjustment) of the investment policy along with the approval of the investor, or the Investment Registration Certificate/Investment Certificate/Investment License/Business License.
An explanation or provision of related documents concerning the amendment.
Step 2: Submission of the application for project amendment
Investors must apply for amendment via the National Foreign Investment Information System (www.fdi.gov.vn) before submitting the physical application.
The investor can apply to amend the investment project to the Investment Registration Authority through one of the following methods: in person, online, or via postal services.
Step 3: Processing of the Application by the Investment Registration Authority
The timeline for the Investment Registration Authority to process the application for project amendment is as follows:
For amendments related to changes in the project name or investor’s name on the Investment Registration Certificate: Within 03 working days from the date of receiving the request for amendment, the Investment Registration Authority shall amend the Investment Registration Certificate.
For amendments to other contents, excluding the project name and investor’s name: Within 10 days from the receipt of the valid application, the Investment Registration Authority shall amend the Investment Registration Certificate.
Step 4: Receiving the result
Investors will receive the results directly from the Investment Registration Authority.
The result will be an amended Investment Registration Certificate, reflecting the updated contents of the project.
According to the Law on Investment 2020, the following authorities are competent to amend the Investment Registration Certificate:
The Management Board of Industrial Parks, Export Processing Zones, High-Tech Parks, and Economic Zones shall amend the Investment Registration Certificate for investment projects within these areas.
The Department of Planning and Investment where the investor is based or where the investor plans to establish its head office or executive office to carry out the investment project shall amend the Investment Registration Certificate.
Note: In cases where an investment project is implemented in two or more provincial-level administrative units, the investor must submit the application to the Department of Planning and Investment of one province or centrally governed city where the investor is implementing the project or intends to establish its executive office, to request the amendment of the Investment Registration Certificate for the project.
What are the penalties for failing to adjust investment projects in Vietnam?
Investors must carry out the procedure to amend the Investment Registration Certificate if the amendment of the investment project results in changes to the contents of the Investment Registration Certificate.
According to Point b, Clause 2, Article 17 of Decree No. 122/2021/ND-CP:
If investors fail to amend the Investment Registration Certificate in cases where the investment project amendment results in changes to its contents, they shall be fined from VND 70,000,000 to VND 100,000,000 (the penalty for organizations).
In addition, investors will be required to carry out the procedure for amending the Investment Registration Certificate as a corrective measure.
How long do investors have to apply for project amendment after a change occurs?
The Law on Investment 2020 and its guiding documents do not specify a timeframe for carrying out the procedure to amend the Investment Registration Certificate from the time the change occurs. However, businesses should complete the procedure promptly to avoid issues during inspections by state authorities where the project’s content may no longer match the information recorded in the Investment Registration Certificate.
Important notes when adjust investment projects in Vietnam
Amending an investment project in case of partial or full assignment of the investment project
Investors have the right to assign part or the entirety of their investment project to another investor, provided that the conditions under Clause 1, Article 46 of the 2020 Investment Law are met.
The assignee of the investment project inherits the rights and obligations to implement the investment project from the assignor. If the assignment results in income, the assignor must fulfill financial obligations to the State following the law.
Adjusting an investment project in case of division, separation, or merger of investment projects
Investors are entitled to amend their investment projects through the following forms:
Divide or separate the investment project they are currently implementing (hereinafter referred to as the “divided or separated project”) into two or several projects;
Merge one or several of their investment projects (hereinafter referred to as the “merged project”) into another investment project they are implementing (hereinafter referred to as the “receiving project”).
Amending an investment project when using land use rights and assets attached to the land as a capital contribution to an enterprise
Investors may use land use rights and assets attached to the land within their investment project as capital contributions to establish an economic organization or contribute capital to an enterprise under the laws on land and enterprises.
The capital contribution must comply with the following conditions:
Conditions under the land law regarding the rights and obligations of land users and owners of assets attached to the land, as well as the rights and obligations of the recipient of capital contributions via land use rights and attached assets;
Conditions under the laws on construction, housing, and real estate business (if applicable);
Conditions stipulated in the investment policy approval decision, the investor approval decision, the investment registration certificate, and agreements between the competent authorities and the investor (if any);
Conditions for capital contribution and receipt by state-owned enterprises holding 100% charter capital as prescribed by the laws on the management and use of state capital invested in production and business, the management and use of public assets, and related legislation.
Other important notes when amending an investment project
When an enterprise undertakes the procedures for amending its Investment Registration Certificate, it must also amend the relevant content in its Enterprise Registration Certificate and Business License (if any);
For enterprises with an Investment License or Investment Certificate issued before July 1, 2015, it is necessary to convert these documents into an Investment Registration Certificate;
If an enterprise changes to include new capital-contributing investors, the new investors must make capital contributions to the enterprise’s direct investment capital account and contribute according to the agreed timeline set out in the amended Investment Registration Certificate. If the investor fails to contribute capital within the agreed timeline, the enterprise must apply for an extension and may face penalties as prescribed by law.
Viet An Law advises clients on conditions, documents, and procedures for amending investment projects;
Draft legal documents for enterprises based on the information provided and in compliance with the law;
Act as an authorized representative to carry out procedures for amending the investment project at competent state agencies;
Monitor the progress of the dossier processing by state agencies and provide explanations to state authorities on relevant matters to facilitate the amendment of the investment project;
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