Power to approve investment guidelines in Vietnam

Power to approve investment guidelines in Vietnam (Internet image)

1. What is approval for investment guidelines?

According to Clause 1, Article 3 of the Law on Investment 2020 (amended in 2022), approval for investment guidelines means a competent authority approving the objectives, location, scale, schedule and duration of a project; investor or form of selection of investor and special mechanisms or special policies (if any) to execute an investment project.

2. Power to approve investment guidelines in Vietnam

2.1 The National Assembly’s power to approve investment guidelines in Vietnam

According to Article 30 of the Law on Investment 2020 (amended in 2022), the National Assembly shall grant approval for investment guidelines of the following investment projects:

- Investment projects that exert great effects or potentially serious effects on the environment, including:

+ Nuclear power plants;

+ Projects that require repurposing of land of special-use forests, headwater protection forests or border protection forest of at least 50 hectares; of sand-fixing and windbreak coastal forests or protection forests for wave prevention of at least 500 hectares; of production forests of at least 1,000 hectares;

- Investment projects that require repurposing of land meant for wet rice cultivation during with 02 or more crops of at least 500 hectares;

- Investment projects that require relocation of 20,000 people or more in mountainous areas or 50,000 people or more in other areas;

- Investment projects that require application of a special mechanism or policy that needs to be decided by the National Assembly.

2.2 The Prime Minister’s power to approve investment guidelines in Vietnam

Except for the investment projects specified in Section 2.1 above, the Prime Minister shall grant approval for investment guidelines of the following investment projects:

- Investment projects regardless of capital sources in any one of the following cases:

+ Investment projects that require relocation of 10,000 people or more in mountainous areas or 20,000 people or more in other areas;

+ Investment projects on construction of: airports and aerodromes; runways of airports and aerodromes; international passenger terminals; cargo terminals of airports and aerodromes with a capacity of at least 1 million tonnes per year;

+ New investment projects on passenger air transport business;

+ Investment projects on construction of ports and wharves of special seaports; ports and wharves in which investment is at least VND 2,300 billion within the category of Class I seaports;

+ Investment projects on petroleum processing;

+ Investment projects which involve betting and casino services, excluding business in prize-winning electronic games for foreigners;

+ Investment projects on construction of residential housing (for sale, lease or lease purchase) and urban areas that use at least 300 hectares of land or with a population of at least 50,000 people;

+ Investment projects regardless of the area of land used or population within the safety perimeter of relics of level I recognized by the competent authority as the national and special national relics; or within the safety perimeter of relics of level II recognized by the competent authority as the special national relics under the World Heritage List;

+ Investment projects on construction and operation of infrastructure in industrial zones and export processing zones.

- Foreign investors’ investment projects in the following fields: provision of telecommunications services with network infrastructure; afforestation; publication, press;

- Investment projects which at the same time fall within the power of at least two provincial People's Committees to grant approval for investment guidelines;

- Other investment projects subject to approval for their investment guidelines or subject to investment decision by the Prime Minister as prescribed by law.

(Article 31 of the Law on Investment 2020 (amended in 2022))

2.3 The power of provincial People’s Committees to approve investment guidelines in Vietnam

According to Article 32 of the Law on Investment 2020 (amended in 2022), except for the investment projects set out in Section 2.1 and 2.2, the provincial People’s Committees shall grant approval for investment guidelines of the following investment projects:

(1) Investment projects that request the State to allocate or lease out land without auction or bidding for or receipt of land use rights, and investment projects that request permission to repurpose land, except for cases of allocation, lease or permission for repurposing of land of households or individuals not subject to the written approval by the provincial People's Committee in accordance with regulations of law on land;

(2) Investment projects on construction of residential housing (for sale, lease or lease purchase) and urban areas that use less than 300 hectares of land or with a population of less than 50,000 people;

(3) Investment projects regardless of the area of land used or population within the safety perimeter of relics of level II recognized by the competent authority as the national and special national relics; except for the special national relics under the World Heritage List; investment projects regardless of the area of land used or population within a restricted development area or within an historic inner area (determined in accordance with urban area planning projects) of a special urban area;

(3) Projects on construction of residential housing (for sale, lease or lease purchase) and urban areas that use at least 50 hectares of land or less than 50 hectares of land but with a population of at least 15,000 people in an urban area; or that use at least 100 hectares of land or less than 100 hectares of land but with a population of at least 10,000 people in a non-urban area; or investment projects regardless of the area of land used or population within a restricted development area or within an historic inner area (determined in accordance with urban area planning projects) of a special urban area;

(4) Projects on investment in golf course construction and business;

(5) Investment projects of foreign investors and foreign-invested business organizations executed on islands or in border or coastal communes; in other areas affecting national defense and security.

Note: The investment guidelines of the investment projects in item (1), (2), (5) executed in industrial parks, export-processing zones, hi-tech zones and economic zones in conformity with planning approved by competent authorities shall be approved by management boards of such industrial parks, export-processing zones, hi-tech zones and economic zones.

Van Trong

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