Report on initial assessment of foreign captial project in Vietnam

State agencies strictly stipulate investment supervision and assessment activities for investment activities using foreign capital. One of the reports that investors must make is the initial assessment report of the project using foreign capital. However, many investors are currently unclear about the implementation of this report. The following article will provide you with some information about  the initial assessment report of the foreign-invested project.

Legal basis

• Investment Law 2020;
• Law on Construction 2014, amended and supplemented in 2020.
• Decree 29/2021/ND-CP stipulating the order and procedures for appraisal of nationally important project and investment supervision and evaluation;
• Decree 122/2021/ND-CP on sanctioning administrative violations in the field of planning and investment;
• Circular 05/2023/TT-BKHDT stipulating the form of investment monitoring and evaluation report; online reporting regime and operation management of the information system on supervision and evaluation of investment in state-funded investment programs and project.

What is an investment project?

In terms of form: An investment project is a dossier that presents in detail and systematically the activities and costs according to a plan to achieve certain results and achieve certain goals in the future.

In terms of content, an investment project is a set of interrelated activities planned to achieve the set goals by producing concrete results in a certain time, through the use of defined resources.

From a management perspective, an investment project is a tool to manage the use of capital, materials and labor to produce financial, economic and social results over a long period of time. A project is a series of joint activities created to achieve certain results within a defined budget and time.

Legally, according to the Investment Law 2020, an investment project is an investment project that is a collection of proposals for medium-term or long-term capital expenditure to conduct business investment activities in specific areas, within a specified period of time.

Therefore, it can be understood that an investment project is a set of interrelated activities planned to help businesses achieve set goals by producing specific results in a certain time, through the use of defined resources. At the same time, investment project are also the basis for competent state agencies to take measures to manage and license investment. The investment project is also the basis for investors to carry out investment activities and evaluate the effectiveness of the project. And it is especially important in persuading the investor to decide on investment and credit institutions to finance the project.

What is an investment assessment?

Project evaluation is the process of collecting and analyzing information to understand the progress, effectiveness and success of a project. This is an important aspect of project management because it can facilitate project completion and make decisions about the future of the current project, as well as others. Investment project evaluation includes: initial assessment, mid-term or phase assessment, closing assessment, impact assessment and ad-hoc assessment.

The initial assessment is an assessment to check the preparation as well as any problems before putting the project into operation.

What is the initial assessment report of a foreign capital project?

Initial assessment is an assessment carried out immediately after the commencement of investment in a program or project in order to consider the actual situation of the program or project compared to the time of approval for appropriate handling measures.

The law of our country has promulgated the form of initial assessment report on investment project, which is an important form of the process of supervising and evaluating investment project.

Sample contents of initial assessment report of foreign capital project for public investment project in Vietnam

The obligation to report on the initial assessment of foreign capital project for public investment project is specified in Article 55 of Decree 29/2021/ND – CP stipulating the assessment of public investment project that group A project must carry out the initial assessment assessment.

The initial assessment report is only in the case of public investment project and non-public investment project. Therefore, in case the project uses foreign capital, such project must be in the case of using state capital to arise the obligation to prepare the initial assessment report. The Report Form is specified in Form No. 02 of the Appendix of Circular 05/2023/TT-BKHDT. Specifically, the content of the report will include:

Information about the project

First, the report should specify information about the project including the following data:

• Project name;
• Investor;
• Project planning consultancy organization;
• Objectives of the project;
• Scale, capacity;
• Main investment contents/main investment items;
• Project location;
• Land use area;
• Form of project management;
• Project timelines;
• Number and date of approval of investment decisions;
• Project duration: Start time and end time;
• Total investment;
• Investment capital;

Contents

The report focuses on the following:

• Firstly, the preparation, organization and mobilization of resources for the implementation of the project must ensure the approved objectives and progress.
• Secondly, new obstacles and problems appear compared to the time of project approval.
• Fourth, other relevant content (if any).

Petition

Propose measures to solve problems and arise in accordance with actual conditions.

The subject submitting the report, where the report is submitted

Subjects submitting reports: investors, economic organizations submitting reports.

Place of submission: Department of Planning and Investment where the investor’s head office is located.

Deadline for submitting reports in Vietnam

According to the provisions of Article 100 of Decree No. 29/2021/ND-CP, the deadline for submitting a report is:

• Submit a report 6 months before July 10 of the reporting year;
• Submit annual reports by February 10 of the following year;
• Submit a report before the project program adjuster.

Some related questions

Will company be sanctioned in case not to report  it?

Clause 1, Article 10 of Decree 122/2021/ND-CP stipulates penalties for administrative violations in the field of planning and investment, according to which a fine from VND 30,000,000 to VND 50,000,000 is imposed for failure to make reports on investment activities, monitoring reports and evaluation of investment project according to regulations.

Therefore, failure to report will be administratively sanctioned from VND 30,000,000 to VND 50,000,000.

How many investment monitoring and evaluation activities are there?

Investment supervision and evaluation activities include 2 activities including: Monitoring and evaluating investment project and monitoring and evaluating overall investment.

What is public investment project monitoring?

Public investment project means a project that uses all or part of public investment capital. Investment supervision is the activity of monitoring and examining investment. Investment supervision includes supervision of investment programs and project and overall supervision of investment.

Above are the advice of Viet An Law on  investment project evaluation reports, if you need to draft and submit investment project reports, please contact us for the best support!