This is a noteworthy provision stipulated in the Investment Law 2020, which was promulgated by the National Assembly on June 17, 2020, and replaced the Investment Law 2014.
Article table of contents
From January 1, 2021, investors will no longer receive guarantees from the Government of Vietnam (Illustration)
To be specific, in Chapter II of the Investment Law 2020, it is stipulated that investors will be assured of investment through the following provisions:
- Ensuring property ownership rights- Ensuring business investment activities- Ensuring the right to transfer assets of foreign investors abroad- Ensuring business investment in case of legal changes- Dispute resolution in business investment activities
However, according to the current regulations in the Investment Law 2014, investors are assured of investment through 6 provisions including:
- Ensuring property ownership rights- Ensuring business investment activities- Ensuring the transfer of assets of foreign investors abroad- Guarantees from the Government of Vietnam for some important projects- Ensuring business investment in case of legal changes- Dispute resolution in business investment activities
According to Article 12 of the Investment Law 2014, guarantees from the Government of Vietnam for some important projects are stipulated as follows: "The Prime Minister of the Government of Vietnam decides on guaranteeing the performance obligations of authorized state agencies or state enterprises participating in implementing investment projects under the jurisdiction of the National Assembly, the Prime Minister of the Government of Vietnam, and other important infrastructure development investment projects."
Thus, from January 1, 2021, investors will not receive guarantees from the Government of Vietnam for some important projects.
Aside from abolishing the guarantees from the Government of Vietnam for some important projects, the Investment Law 2020 also supplements the provision: "Foreign investors are allowed to apply market access conditions as stipulated for domestic investors." Regarding market access conditions for foreign investors stipulated in the List of sectors and trades with restricted market access for foreign investors, the following criteria are included:
- The capital ownership ratio of foreign investors in economic organizations;- Investment forms;- Scope of investment activities;- Investor capacity; partners participating in the implementation of investment activities;- Other conditions as stipulated in laws, resolutions of the National Assembly, ordinances, resolutions of the Standing Committee of the National Assembly, decrees of the Government of Vietnam, and international treaties to which the Socialist Republic of Vietnam is a member.
Details on each investment assurance provision can be found in the Investment Law 2020, effective from January 1, 2021.
Le Hai
