In accordance with the law in Vietnam, what are investment project, expansion project, new investment project, start-up project?

In accordance with the law in Vietnam, what are investment project, expansion project, new investment project, start-up project?

Pursuant to Article 3 of the Law on Investment in 2020 stipulating as follows:

- 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.

- Expansion project means an investment project on development of a running project by expanding the scale, improving the capacity, applying new technologies, reducing pollution or improving the environment.

- New investment project means a project that is executed for the first time or a project independent from any other running project.

- Start-up project means an investment project that implements ideas on the basis of exploiting intellectual property, technologies and new business models and is able to grow quickly.

What are the rules for execution of investment projects in Vietnam?

Pursuant to Article 42 of the Law on Investment in 2020 stipulating rules for execution of investment projects in Vietnam as follows:

- For a project subject to approval for its investment guidelines, the approval for investment guidelines shall be granted before the investor executes the investment project.

- For a project subject to issuance of an investment registration certificate, the investor shall follow the procedures for issuance of the investment registration certificate before executing the investment project.

- Investors shall comply with regulations of this Law and the laws on planning, land, environment, construction, labor and fire prevention and fighting; other relevant regulations of law, written approval for investment guidelines (if any) and the investment registration certificate (if any) during execution of their investment projects.

How to guarantee execution of investment projects in Vietnam?

- The investor shall pay a deposit or have a bank guarantee for investment project execution if the project uses land allocated or leased out by the State or is permitted by the State to repurpose land, except for the following cases:

+ The investor is the successful bidder for the right to use a land area that is allocated by the State for land levy or leased out by the State for a lump-sum rent;

+ The investor wins bidding for execution of an investment project using land;

+ The State allocates or leases out land to the investor on the basis of receipt of an investment project for which a deposit has already been paid or for which the capital has been fully contributed or raised following the schedule specified in the written approval for investment guidelines or the investment registration certificate;

+ The State allocates or leases out land to the investor for execution of an investment project on the basis of receipt of the land use right and assets on land from another land user.

- Based on the scale, nature and execution schedule of each investment project, the deposit for assurance of project execution is 01% - 03% of the investment capital of the project. If a project comprises multiple investment phases, the amount of deposit shall be paid and returned in each phase of execution of the investment project, except for the case in which the deposit is not returned.

- The Government shall elaborate this Article.

Best regards!