Cases in which the investment registration authority shall terminate an investment project in Vietnam

Cases in which the investment registration authority shall terminate an investment project in Vietnam (Internet image) 

Regarding this issue, LawNet would like to answer as follows:

1. What is investment registration authority?

According to Clause 2, Article 3 of the Law on Investment 2020, investment registration authority means a regulatory agency that issues, adjusts and revokes investment registration certificates.

2. Cases in which the investment registration authority shall terminate an investment project in Vietnam

The investment registration authority shall terminate an investment project in part or in full in the following cases:

- The investor fails to overcome the difficulties that lead to project suspension in the cases mentioned in Clause 2 and Clause 3 Article 47 of the Law on Investment 2020;

- The investor is no longer permitted to keep using the investment location and fails to complete the procedures for change of investment location within 06 months from the date on which the investor is no longer permitted to use the investment location, except for the case specified in Point d of Clause 2, Article 48 of the Law on Investment 2020;

- The investment registration authority cannot contact the investor or the investor’s legal representative after 12 months from the date of suspension of the project;

- Land reserved for the investment project is expropriated by the State for the reason that the land is not used or the land use is delayed in accordance with regulations of law on land;

- The investor fails to pay the deposit or obtain a bank guarantee as prescribed by law if project execution security is required;

- The investor conducted the investment activities on the basis of a sham civil transaction in accordance with the civil law;

- The investment project is terminated according to a judgment or decision of a court or an arbitral award;

(Clause 2, Article 48 of the Law on Investment 2020)

3. Procedures for termination of investment projects in Vietnam

Specifically, in Clause 2, Article 57 of Decree 31/2021/ND-CP, the termination of investment project shall comply with the following procedures:

- If the investor decides to terminate the investment project himself/herself/itself as prescribed in Point a Clause 1 Article 48 of the Law on Investment 2020, such investor shall send the termination decision to the investment registration authority within 15 days from the date of making the decision together with the investment registration certificate (if any);

- If the investment project is terminated according to the conditions set out in the contract or enterprise's charter or upon the expiration of the project’s duration as specified in Points b and c Clause 1 Article 48 of the Law on Investment 2020, the investor shall notify and return the investment registration certificate (if any) to the investment registration authority within 15 days from the date of termination together with a copy of the document recording the termination.

The investment registration authority shall notify the project termination to relevant authorities;

- If the investment project is terminated according to Clause 2 Article 48 of the Law on Investment 2020, the investment registration authority shall decide to terminate the project and revoke the investment registration certificate in the case of the project issued with the investment registration certificate.

The investment registration certificate shall be invalidated from the effective date of the decision on project termination.

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