What are details of Decree 132/2024/ND-CP stipulating regulations on outward investment in petroleum activities in Vietnam?
What are details of Decree 132/2024/ND-CP stipulating regulations on outward investment in petroleum activities in Vietnam?
On October 15, 2024, the Government of Vietnam issued Decree 132/2024/ND-CP detailing outward investment in the following forms to engage in petroleum activities and overseas petroleum projects (hereinafter referred to as outward investment in petroleum activities):
- Establishing economic organizations in accordance with the law of the host country
- Investing in the form of contracts overseas
- Contributing capital, purchasing shares, buying capital contributions of economic organizations overseas to participate in managing such organizations
- Other investment forms in accordance with the law of the host country
Decree 132/2024/ND-CP takes effect in Vietnam from December 5, 2024.
What are details of Decree 132/2024/ND-CP stipulating regulations on outward investment in petroleum activities in Vietnam? (Image from Internet)
What does outward investment capital in petroleum activities include?
Pursuant to Article 4 of Decree 132/2024/ND-CP, outward investment capital in petroleum activities includes:
Article 4. Outward investment capital in petroleum activities
- Sources of outward investment capital in petroleum activities consist of money and other lawful assets of investors, including equity capital, loans in Vietnam transferred abroad, recovery costs, profits, and shares from overseas petroleum projects retained for reinvestment overseas.
- Money and other lawful assets as mentioned in clause 1 of this Article include: a) Foreign currency in accounts at authorized credit institutions or purchased at authorized credit institutions as prescribed by law;
b) Vietnamese currency in compliance with Vietnam's foreign exchange management laws; c) Machinery, equipment, materials, raw materials, fuel, finished goods, semi-finished goods;
[...]
Thus, the sources of outward investment capital in petroleum activities include money and other lawful assets of investors, comprising equity capital, loans in Vietnam transferred abroad, recovery costs, profits, and shares from overseas petroleum projects retained for reinvestment overseas.
Money and lawful assets include:
- Foreign currency in accounts at authorized credit institutions or purchased at authorized credit institutions as prescribed by law
- Vietnamese currency in compliance with Vietnam's foreign exchange management laws
- Machinery, equipment, materials, raw materials, fuel, finished goods, semi-finished goods
- Intellectual property, technology, brand value, asset rights- Shares, capital contributions, projects of investors exchanged at economic organizations in Vietnam and overseas economic organizations as prescribed
- Other lawful assets as prescribed by civil law in Vietnam.
What are conditions for issuance of outward investment registration certificate in Vietnam?
Based on Article 60 of the Investment Law 2020, which stipulates the conditions for issuance of outward investment registration certificate in Vietnam:
Article 60. Conditions for issuance of outward investment registration certificate in Vietnam
- outward investment activities comply with the principles specified in Article 51 of this Law.
- Not within sectors and trades banned from outward investment specified in Article 53 of this Law and fulfill the conditions for outward investment for conditional outward investment sectors and trades as stated in Article 54 of this Law.
- The investor has a commitment to self-arrange foreign currency or a commitment for foreign currency arrangement to conduct outward investment activities through authorized credit institutions.
- A decision for outward investment as stipulated in Article 59 of this Law.
- A document from the tax authority confirming the fulfillment of tax obligations by the investor. The confirmation from the tax authority should not be more than 3 months until the date of submission of the investment project dossier.
Therefore, an investment project is granted a outward investment registration certificate when it meets the following conditions:
(1) outward investment activities comply with the following principles:
- The State encourages outward investment to:
+ Exploit, develop, and expand markets;
+ Increase the export of goods, services, and foreign currency earnings;
+ Access modern technology, enhance management capability, and add resources for the socio-economic development of the country.
- Investors conducting outward investment activities must comply with legal provisions.
- Have sole responsibility for the effectiveness of outward investment activities.
(2) Not within sectors and trades banned from outward investment, including:
- Trading narcotics as prescribed.
- Trading specific chemicals, minerals as prescribed.
- Trading specimens of wild fauna and flora species originating from natural harvest.
- Prostitution business;
- Trading in humans, tissues, human cadavers, human organs, human fetuses;
- Business activities related to human cloning;
- Explosive business;
- Debt collection services.
- Sectors and trades with technology, products subject to export prohibition as prescribed by foreign trade management laws.
- Sectors, trades prohibited by the laws of the host investment reception country.
(3) The investor has a commitment to self-arrange foreign currency or a commitment for foreign currency arrangement to conduct outward investment activities through authorized credit institutions.
(4) A decision for outward investment according to regulations.
(5) A document from the tax authority confirming the fulfillment of tax obligations by the investor.
