What are advance funding and recovery of advance funding for outward investment projects using state budget fund in Vietnam?

1. What are advance funding and recovery of advance funding for outward investment projects using state budget fund in Vietnam?

In Article 20 of Decree 99/2021/ND-CP stipulating advance funding and recovery of advance funding, according to which:

1. Advance funding and recovery of advance funding for overseas public investment projects funded by the state budget shall be subject to Article 10 herein.

a) As regards construction contracts executed under the host country’s domestic law, if there is any conflict between foreign law and Vietnam’s law in terms of advance funding, recovery of advance funding and guarantee for advance on the contract sum, the ratified contract must apply.

b) In specific cases where projects of particular nature need an advance disbursement greater than the prescribed maximum limit, the regulatory payment body shall make the advance disbursement upon the managing agency’s request on condition that the amount of such advance disbursement is not greater than the authorized budget available for the project’s use in the year.

c) In specific cases where projects of particular nature need an advance disbursement, if evidencing documents on such advance disbursement are not sufficient as per the regulations of this Decree (under the host country's law), the managing agency shall send a written request to the Ministry of Finance for its consideration and possible actions.

2. Advance funding dossier:

a) Written request for advance on investments specific to jobs of the managing agency (specify advance amount, account and beneficiary);

b) Payment request (Form No. 04b.nn/TT).

2. What is payment for completed quantities for outward investment projects using state budget fund in Vietnam? 

According to Clause 1, Clause 2, Article 21 of Decree 99/2021/ND-CP stipulates as follows:

1. As for jobs executed through construction contracts, the settlement of contractual obligations must be relevant to contract types, values and contractual terms and conditions. The number of payment intervals, payment phases, points of time, documents and conditions must be clearly prescribed in each contract. Investors shall be responsible for complying with requirements for application of contract prices under applicable regulatory provisions.

As regards construction contracts executed under the host country’s domestic law, if there is any conflict between foreign law and Vietnam’s law, the payment for completed quantities shall be subject to the ratified contract.

2. When wishing to receive fund disbursements, investors may send managing agencies the following documents (where each disbursement occurs):

a) Regarding construction, reconstruction, renovation and expansion projects: Chart of completed quantities under the contract (Form No. 03.a/TT, or any other form used for determining quantities that is accepted for use in the contract having overseas validity); payment request (Form No. 04a.nn/TT); request form for recovery of advance disbursement (where relevant, using Form No. 04.b/TT); chart of off-contractual quantities that is required where relevant (Form No. 03.c/TT or any other form used for determining quantities that is accepted for use in the contract having overseas validity).

b) Documentation requirements for projects on purchase or rental of real property in the long term (above 30 years): If payment (including payment of deposits, if any) is made under the real property sale and rental contract, investors shall send the managing agencies the written request for fund disbursement (Form No. 04a.nn/TT).

c) Regarding mixed-purpose projects on purchase of land, houses, construction, reconstruction, renovation and expansion: The required dossier comprises the documents stated in point a and b of clause 2 of this Article.

Best Regards!