04 regulations on guarantees for investment in Vietnam under Law on Investment

04 regulations on guarantees for investment in Vietnam under Law on Investment (Internet image)

1. Guarantees for asset ownership in Vietnam

Article 10 of the Law on Investment 2020 stipulates the guarantees for asset ownership as follows:

- Lawful assets of investors shall not be nationalized or confiscated by administrative measures.

- Where an asset is bought or requisitioned by the State for reasons of national defense and security, national interests, state of emergency or natural disaster management:

The investor shall be reimbursed or compensated in accordance with regulations of law on asset requisition and relevant regulations of law.

2. Guarantees for business investment activities in Vietnam

Article 11 of the Law on Investment 2020 stipulates the guarantees for business investment activities as follows:

- Investors are not required by the State to satisfy the following requirements:

= Give priority to purchase or use of domestic goods/services; or only purchase or use goods/services provided by domestic producers/service providers;

= Achieve a certain export target; restrict the quantity, value, types of goods/services that are exported or domestically produced/provided;

= Import a quantity/value of goods that is equivalent to the quantity/value of goods exported; or balance foreign currencies earned from export to meet import demands;

= Reach a certain rate of import substitution;

= Reach a certain level/value of domestic research and development;

= Provide goods/service at a particular location in Vietnam or overseas;

= Have the headquarters situated at a location requested by a competent authority.

- Depending on the socio-economic conditions and demands for investment attraction in each period, the Prime Minister shall decide to apply forms of guarantee of the State to execute investment projects subject to approval for their investment guidelines by the National Assembly, the Prime Minister, and other important investment projects on infrastructural development.

3. Guarantees for transfer of foreign investors’ assets overseas in Vietnam

Pursuant to Article 12 of the Law on Investment 2020, the guarantees for transfer of foreign investors’ assets overseas is as follows:

After all financial obligations to Vietnamese government are fulfilled, foreign investors are permitted to transfer the following assets overseas:

- Investment capital and proceeds from liquidation of its investment;

- Their income obtained from business investment activities;

- Money and other assets under the lawful ownership of the investors.

4. Guarantees for business investment upon changes of laws in Vietnam

Guarantees for business investment upon changes of laws specified in Article 13 of the Law on Investment 2020 is as follows:

-  Where a new law provides more favorable investment incentives:

The investors are entitled to enjoy the new incentives for the remaining period of the incentive enjoyment of the project, except for special investment incentives for the investment projects in the case specified in Point a Clause 5 Article 20 of the Law on Investment 2020.

- Where a new law that provides less favorable investment incentives than those previously enjoyed by investor is promulgated, investors shall keep enjoying the current incentives for the remaining period of the incentive enjoyment of the project.

- The regulations in Clause 2 of this Article do not apply if regulations of a legal document are changed for reasons of national defense and security, social order and security, social ethics, public health, or environmental protection.

- Where an investor is no longer eligible for investment incentives prescribed in Clause 3 of Article 13 of the Law on Investment 2020, one or more of the following solutions shall be adopted:

= Deduct the damage actually suffered by the investor from the investor's taxable income;

= Adjust the objectives of the investment project;

= Assist the investor in remedying damage.

- With regard to the investment guarantee measure in Clause 4 of Article 13 of the Law on Investment 2020, the investor shall make a written request within 03 years from the effective date of the new legal document.

Ngoc Nhi

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE