How to handle the project has been adjusted to the maximum schedule of 24 months, is not subject to force majeure but still fails to comply with the extended time limit?
- Documentation and procedures for application for appraisal of approval for adjustments to investment guidelines of projects?
- When shall the investor follow procedures for approving the adjustment to the investment guidelines?
- How to deal with a project that has been adjusted to the maximum schedule of 24 months as prescribed in Clause 4 Article 41 of the Law on Investment 2020, which is not subject to force majeure but still fails to comply with the extended time limit?
Documentation and procedures for application for appraisal of approval for adjustments to investment guidelines of projects?
According to Article 31 of Decree 29/2021/ND-CP of Vietnam on documentation and procedures for application for appraisal of approval for adjustments to investment guidelines of projects:
“Article 31. Documentation and procedures for application for appraisal of approval for adjustments to investment guidelines of projects
1. Documentation submitted by the investor to apply for appraisal includes:
a) An application form for approval for adjustments to investment guidelines, which specifies the adjustments and reason for adjustment;
b) Adjusted proposal for the investment project or adjusted pre-feasibility study report or adjusted feasibility study report;
c) The documents in Points b, c, dd, e, g and h Clause 1 Article 33 of the Law on Investment related to the adjustments.
d) Other relevant documents (if any).
2. The investor shall submit 20 sets of documents as referred to in Clause 1 of this Article to the Ministry of Planning and Investment.
3. Within 15 days from the receipt of all valid documents, the Ministry of Planning and Investment shall request the Prime Minister to establish a Council as prescribed in Article 4 hereof.
4. The Council shall appraise approval for adjustments to investment guidelines within 90 days from the date of establishment. If an inspection consultant is hired, the time limit for appraisal by the Council begins from the date on which the consultant hiring contract is signed.
5. Documentation submitted by the Council to the Government includes:
a) The documents specified in Clause 1 of this Article;
b) An appraisal report prepared by the Council;
c) Other relevant documents (if any).
6. The Government shall consider and give its opinions on approval for adjustments to investment guidelines of PNS in accordance with the Government’s working regulations.
7. Documentation submitted by the Government to the National Assembly includes:
a) An application form prepared by the Government;
b) The documents specified in Clause 5 of this Article;
c) Other relevant documents (if any).”
How to handle the project has been adjusted to the maximum schedule of 24 months, is not subject to force majeure but still fails to comply with the extended time limit?
When shall the investor follow procedures for approving the adjustment to the investment guidelines?
Pursuant to Clause 3 Article 41 of the Law on Investment 2020 of Vietnam, the investor that has an investment project whose investment guidelines have been approved shall follow procedures for approving the adjustment to the investment guidelines in one of the following cases:
- Any objective specified in the written approval for investment guidelines is changed; any objective that is subject to approval for investment guidelines is added;
- The land area is increased or reduced by 10% or more than 30 hectares or the investment location is changed;
- The total investment capital is increased or reduced by 20% or more, thereby changing the scale of the investment project;
- Extension of the project execution schedule results in total duration of the project being extended by more than 12 months compared to that stated in the first written approval for investment guidelines;
- The duration of the investment project is adjusted;
- Any technology that has been appraised or about which opinions have been collected during the process of approving the investment guidelines is changed;
- There is a change of the investor in the investment project whose investment guidelines are approved together with approval for the investor before the exploitation or operation of the project or there is a change of conditions (if any) applicable to the investor.
How to deal with a project that has been adjusted to the maximum schedule of 24 months as prescribed in Clause 4 Article 41 of the Law on Investment 2020, which is not subject to force majeure but still fails to comply with the extended time limit?
Based on the reply of the Prime Minister's Special Working Group in Official Dispatch 2541/CV-TCT of Vietnam dated April 18, 2022 on guiding a number of contents on the deployment and implementation of business investment projects. According to the law, the above issues are answered as follows:
- According to the provisions at Points a, b, c, d, dd and e Clause 4 Article 41 of the Law on Investment: “With respect to the investment project whose investment guidelines are approved, the investor is not allowed to extend the investment execution schedule by more than 24 months compared to that stated in the first written approval for investment guidelines, except for one of the following cases:
+ It is necessary to remedy the consequences of an event of force majeure in accordance with the civil law and the land law;
+ The project execution schedule is adjusted because the State delays allocating or leasing out land to the investor or allowing the investor to repurpose land.
+ The project execution schedule is adjusted at the request of a regulatory agency or the regulatory agency delays in performing administrative procedures;
+ The investment project is adjusted because the regulatory agency changes the planning;
+ Any objective specified in the written approval for investment guidelines is changed; any objective that is subject to approval for investment guidelines is added;
+ The total investment capital is increased or reduced by 20% or more, thereby changing the scale of the investment project.”
- Pursuant to the above provisions, in addition to adjusting the schedule in case of force majeure, the investor may adjust the project schedule beyond 24 months in other cases because the State delays allocating or leasing out land to the investor or allowing the investor to repurpose land; The project execution schedule is adjusted at the request of a regulatory agency or the regulatory agency delays in performing administrative procedures; The investment project is adjusted because the regulatory agency changes the planning, etc. However, this regulation only applies to projects subject to approval of investment guidelines.
Therefore, it is recommended to review the causes of the project's delay to consider the cases where the investor is allowed to adjust the schedule beyond 24 months according to the above regulations.
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