Vietnam: Conditions and procedures for shutting down an investment project

According to regulations, a project is shut down in the cases specified in Clause 1 Article 48 of the Law on Investment of Vietnam. According to Clause 2 Article 41 of Decree No. 118/2015/NĐ-CP of Vietnam’s Government, procedures for shutdown of a project are specified as follows:

- If the investor decides to shut down the project as set out in Point a Clause 1 Article 48 of the Law on Investment of Vietnam, the investor shall send the decision on project shutdown to the investment registration authority within 15 days from its issuance date together with the Investment Registration Certificate (if any);

- Where a project is shut down under the conditions of a contract, enterprise’s charter, or upon the expiration of its operating period specified in Point b and Point c Clause 1 Article 48 of the Law on Investment of Vietnam, the investor shall submit a notification and return the Investment Registration Certificate (if any) to the investment registration authority within 15 days from the date of shutdown of the project together with documents about the shutdown;

- In case of shut down of a project set out in Point d, dd, e, g, and h Clause 1 Article 48 of the Law on Investment of Vietnam, the investment registration authority shall issue a decision on project shutdown and revoke the Investment Registration Certificate (if the project has one). The Investment Registration Certificate is annulled from the effective date of the decision on project shutdown.

Some notes:

With regard to a project operating under an Investment Certificate (also the certificate of business registration) or Investment License, the investment registration authority shall issue a decision on project shutdown without revoking the Investment Certificate (also the certificate of business registration) or Investment License. In this case, the business registration information on the Investment Certificate (also the certificate of business registration) or Investment License is still effective.

In case of concurrent shutdown of a project and a business organization, the project shall be shutdown as set out in this Article and the investor shall follow procedures for shutting down the business organization according to relevant regulations of law.

Decree No. 118/2015/NĐ-CP stipulates that after the project is shut down, it shall be liquidated as follows:

- The investor liquidates the project in accordance with regulations of law on asset liquidation;

- With regard to a project that receives land, leases land from the State, or repurposes land, the right to use land and property on land shall comply with regulations of law on land;

- During the course of liquidation of a project, if the investor is a business organization that is dissolved or goes bankrupt, the project shall be liquidated in accordance with regulations of law on dissolution and bankruptcy of business organizations.

View full text at Decree No. 118/2015/NĐ-CP of Vietnam’s Government, effective from December 27, 2015.

Thu Ba

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