Investment guarantees granted to investors and PPP project enterprises in Vietnam from 2021

Investment guarantees granted to investors and PPP project enterprises in Vietnam from 2021 (Illustration)

Under the Law on Public-Private Partnership Investment (PPP) 2020, investors and PPP project enterprises in Vietnam shall be entitled to tax, land use, land rental and other incentives in accordance with the law on taxes, land, investment and other provisions of relevant laws. In addition, investors and PPP project enterprises in Vietnam are also entitled to investment guarantees as prescribed in Article 80 as follows:

1. Guarantee for the right to access land, rights to use land and other public property shall be prescribed as follows:

- PPP project enterprises shall be assigned land or leased land by the State or permitted to use other public assets for the performance of PPP contracts in accordance with the law on land and the law on management and use of public assets;

- The purpose of using land shall be protected from against any change that may arise during the entire contract term, even if the lender exercises their rights prescribed in Article 53 of this Law.

2. Guarantee for provision of public services shall be regulated as follows:

- PPP project enterprises may use public works and other auxiliary ones for the purposes of implementation of projects in accordance with laws;

- In case where there is any scarcity of public services or any limitation of users of public facilities, PPP project enterprises shall be given priority to provide public services or shall be preferred to have the right to use public works for the project implementation purpose;

- The competent authority shall be responsible for assisting PPP project enterprises in carrying out the necessary procedures so that these enterprises can be prioritized to have access to public services and public works.

3. Guarantee for the right to mortgage property, the right to commercially operate construction works and infrastructure systems shall be subject to the following regulations:

- PPP project enterprises in Vietnam may provide their assets, their rights to use land and their rights to commercially operate construction works and infrastructure systems as a mortgage provided to lenders in accordance with land and civil law. The mortgage period must not exceed the contract term, unless otherwise agreed in the contract;

- A mortgage agreement on the property, the right to operate infrastructure work or system must be made in writing between the lender and the contracting party;

- Mortgaging assets or the rights to commercially operate construction works or infrastructure systems must not affect the objectives, scale, technical standards, project implementation schedule, other terms and conditions as agreed upon in the contract.

Note: The contract signing agency and competent authority are responsible for cooperating with local authorities where the PPP project is implemented to ensure security, order, and safety for humans and assets of the PPP project company and contractors during the implementation of the PPP project.

More details mya be found in the Law on Public-Private Partnership Investment (PPP) 2020 effective from January 01, 2021.

Ty Na

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