For investment capital of 300 billion VND, how is guarantee rate is expressed as a percentage of the investment capital of the investment project calculated in Vietnam?

For investment capital of 300 billion VND, how is guarantee rate is expressed as a percentage of the investment capital of the investment project calculated in Vietnam?

Pursuant to Clause 2, Article 26 of Decree No. 31/2021/ND-CP stipulating the guarantee rate is expressed as a percentage of the investment capital of the investment project on the progressive principle. To be specific:

a) For a capital portion of up to VND 300 billion, the guarantee rate is 3%;

b) For a capital portion of over VND 300 billion to VND 1,000 billion, the guarantee rate is 2%;

c) For a capital portion of over VND 1,000 billion, the guarantee rate is 1%.

Thus, the level to ensure the implementation of investment projects allocated by the State with an investment capital of 300 billion VND is 3% (equivalent to 9 billion VND) calculated according to the above regulations in Vietnam.

What is determination of project’s investment capital in Vietnam allocated by the State?

According to Clause 3 of Article 26 of Decree No. 31/2021/ND-CP, there are provisions as follows:

3. The project’s investment capital determined as the basis for calculation of the guarantee rate prescribed in Clause 2 of this Article does not include land levy or land rent payable to the State and costs of construction of the investment project’s works (if any) which the investor is obliged to transfer to the State for management after completion.  If the costs of construction of works to be transferred to the State have yet to be accurately determined at the time of signing the project execution guarantee agreement, the investment registration authority shall determine the guarantee amount according to the cost estimate specified in the project proposal prepared by the investor.

Best Regards!