Vietnam: What is the duration of an investment project on salt production in an area with difficult socio-economic conditions?
What is an investment project in Vietnam?
According to Article 3 of the Investment Law 2020, investment projects and investors are regulated as follows:
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4. “investment project” means a collection of proposals for the expenditure of mid-term or long-term capital to carry out investment activities in a particular administrative division over a certain period of time.
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18. “investor” means an organization or individual that carries out business investment activities. Investors include domestic investors, foreign investors and foreign-invested business organizations.
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What are the regulations on the duration of an investment project in Vietnam?
According to Article 27 of Decree 31/2021/ND-CP, the duration of an investment project is prescribed as follows:
Duration of investment projects
1. The duration of an investment project specified in Clauses 1 and 2 Article 44 of the Law on Investment begins from the date on which the investor is issued with the decision on investor approval, decision on approval for both investment guidelines and investor or the investment registration certificate for the first time. For the investment project which uses land allocated or leased out by the State or is permitted by the State to repurpose land, its duration begins from the date on which the investor is issued with the decision on land allocation, decision on land lease or decision on land repurposing. If the investor has obtained the decision on land allocation, decision on land lease or decision on land repurposing but the transfer of land is delayed, the duration of the investment project begins from the date on which land is transferred on site.
2. During the execution of the investment project, the investor is entitled to extend or shorten its duration. The adjusted duration shall not exceed the duration specified in Clauses 1 and 2 Article 44 of the Law on Investment.
3. According to the objectives, scale, location and operating requirements of the investment project, the authority that has the power to approve investment guidelines and the investment registration authority shall consider and decide the duration, and adjust duration of the investment project as prescribed in Clauses 1 and 2 of this Article.
4. Except for the regulations in Points a and b Clause 4 Article 44 of the Law on Investment, upon expiry of the duration of an investment project, the authority that has the power to approve investment guidelines and the investment registration authority will consider and decide to extend duration of such project if the investor wishes to keep executing the investment project and satisfies the following conditions:
a) The project conforms to the national planning, regional planning, provincial planning, urban planning and special administrative-economic unit planning (if any); conforms to the objectives and orientations for urban development or residential housing development plans and programs (with respect to projects on investment in residential housing and urban area construction);
b) The conditions for land allocation or land lease prescribed by the law on land are met (in the case of applying for extension of land use term).
5. The period of extension of duration of the project specified in Clause 4 of this Article shall be considered on the basis of objectives, scale, location and operating requirement of the project and shall not exceed the maximum duration mentioned in Clauses 1 and 2 Article 44 of the Law on Investment.
6. If the investment project satisfies the condition prescribed in Point b Clause 4 of this Article but fails to satisfy the condition prescribed in Point a Clause 4 of this Article, the authority that has the power to approve investment guidelines and the investment registration authority shall consider extending its duration on a year-by-year basis until the district’s annual land use plan is available in accordance with regulations of law on land. The investor shall only follow procedures for extending the duration for the first year of extension.
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What is the duration of an investment project in an area with difficult socio-economic conditions of Vietnam?
According to Appendix III of Decree 31/2021/ND-CP, Ham Tan district of Binh Thuan province is an area with difficult socio-economic conditions.
According to Article 44 of the Investment Law 2020, the duration of an investment project is prescribed as follows:
Duration of investment projects
1. The duration of an investment project inside an economic zone shall not exceed 70 years.
2. The duration of an investment project outside an economic zone shall not exceed 50 years. The duration of an investment project in a disadvantaged area or extremely disadvantaged area or a project with large investment capital but with slow rate of capital recovery may be longer but shall not exceed 70 years.
3. If an investment project uses land allocated or leased out by the State, but the transfer of land is delayed, the delay shall not be included in the project duration or execution schedule.
4. Upon expiry of the duration of an investment project, if the investor wishes to keep executing the investment project and satisfies the conditions as prescribed by law, the duration of the investment project may be extended but shall not exceed the maximum prescribed in Clauses 1 and 2 of this Article, except for the following investment projects:
a) Investment projects using obsolete, environment threatening or resource-intensive technologies;
b) Investment projects in which the investor must transfer assets without reimbursement to the State of Vietnam or the Vietnamese side.
5. The Government shall elaborate this Article.
Accordingly, the duration of an investment project outside an economic zone shall not exceed 50 years. The duration of an investment project in an area with difficult socio-economic conditions shall not exceed 70 years. Thus, in case you invest in a salt production and refining project in Ham Tan district, Binh Thuan province, which is an area with difficult socio-economic conditions, the duration of the project shall not exceed 70 years.
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