After 20 months without investment project implementation, will outward investment registration certificate be invalidated in Vietnam?

After 20 months without investment project implementation, will outward investment registration certificate be invalidated in Vietnam?

Pursuant to Clause 1, Article 64 of the Investment Law 2020, invalidation of outward investment registration certificate as follows:

1. The outward investment registration certificate shall be invalidated in the following cases:

a) The investor decides to terminate the investment project;

b) The investment project duration is over in accordance with regulations of law of the host country;

c) The investment project has to be terminated according to the conditions set out in the contract or charter of the enterprise;

d) The investor transfers all outward investment capital to a foreign investor;

dd) The investor fails to execute or is unable to execute the investment project in line with the schedule registered with the regulatory agency within 24 months from the date of issuance of the outward investment registration certificate and fails to follow the procedures for adjusting the execution schedule of the investment project;

e) The foreign business organization is dissolved or goes bankrupt in accordance with the law of the host country;

g) Pursuant to a judgment or decision of a court or an arbitral award;

Thus, according to the above provisions in Vietnam, if after 24 months from the date of issuance of the outward investment registration certificate, the investor fails to execute or is unable to execute the investment project in line with the schedule registered with the regulatory agency and fails to follow the procedures for adjusting the execution schedule of the investment project, the Certificate will be invalidated.

In case your company has not had enough time as prescribed, the outward investment registration certificate is still valid.

If outward investment registration certificate is invalid but still execute the investment project in Vietnam, how much is fine for this act?

Violations against regulations on outward investment procedures are specified in Clause 2, Article 21 of Decree 122/2021/ND-CP as follows:

2. A fine ranging from VND 50,000,000 to VND 70,000,000 shall be imposed:

a) for making an unlawful, untruthful, inaccurate application to obtain the outward investment registration certificate; or

b) for using the profits from an outward investment project to execute another outward investment project without following procedures for obtaining the outward investment registration certificate for such project; or

c) in case a Vietnamese investor uses their shares, stakes or investment project in Vietnam to pay for or swap the purchase of shares, stakes or investment project of a foreign business organization but fails to follow procedures for obtaining the outward investment registration certificate as prescribed; or

d) for failure to follow procedures for adjusting the outward investment registration certificate where the adjustment is required by law; or

dd) for failure to follow procedures for invalidating the outward investment registration certificate where the invalidation is required by law; or

e) in case a Vietnamese investor follows procedures for obtaining the outward investment registration certificate after the foreign investor follows procedures for making investment in Vietnam where the Vietnamese investor uses their shares, stakes or investment project in Vietnam to pay for or swap the purchase of shares, stakes or investment project of a foreign business organization.

Thus, according to the above provisions in Vietnam, in case the outward investment registration certificate has expired without carrying out the procedures for invalidation, a fine of between VND 50,000,000 and VND 70,000,000 may be imposed. In addition, will be forced to terminate the validity of the outward investment registration certificate.

Best Regards!