Conditions and procedures for termination of investment projects in Vietnam

Conditions and procedures for termination of investment projects in Vietnam (Internet image)

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

1. Conditions and procedures for termination of investment projects in Vietnam

Conditions and procedures for termination of investment projects according to Article 57 of Decree 31/2021/ND-CP are as follows:

- An investment project shall be terminated in the cases specified in Clauses 1 and 2 Article 48 of the Law on Investment 2020.

- Termination procedures are as follows:

+ 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.

- For an investment project operating under an investment certificate (also the business registration certificate) or investment license, the investment registration authority shall issue a decision on project termination without revoking the investment certificate (also the business registration certificate) or investment license.

In this case, the business registration contents on the investment certificate (also the business registration certificate) or investment license is still effective.

Where an enterprise has its business registration certificate revoked in accordance with regulations of law on enterprises, the business registration authority shall follow procedures for revoking the business registration contents on the investment certificate (also the business registration certificate); contents of the investment project remain effective.

- If the investor fails to follow the termination procedures specified in Point b Clause 2 of Article 57 of Decree 31/2021/ND-CP, the investment registration authority shall follow the termination procedures specified in Point c Clause 2 of Article 57 of Decree 31/2021/ND-CP.

- If the investment project is terminated as prescribed in Points a, b and dd Clause 2 Article 48 of the Law on Investment 2020, the investment registration authority shall make a record prior to making a decision on termination.

If the investment project is terminated as prescribed in Point d Clause 2 Article 48 of the Law on Investment 2020, the investment registration authority shall decide to terminate the project after the land expropriation decision is issued.

- If the investor or investment registration authority decide to terminate part of the investment project as prescribed in Clauses 1 and 2 Article 48 of the Law on Investment 2020, the investor is entitled to continue to execute part of the project that is not terminated and concurrently follow the procedures for project adjustment in accordance with the corresponding regulations in Articles 44, 45, 46 and 47 of Decree 31/2021/ND-CP.

- If the investment project is terminated together with the shutdown of the business organization, the project shall be terminated as prescribed in this Article and the investor shall follow procedures for shutdown of the business organization in accordance with regulations of law corresponding to each type of the business organization.

- After the investment project is terminated, the liquidation thereof shall be carried out as follows:

+ The investor shall liquidate the project himself/herself/itself in accordance with regulations of law on asset liquidation;

+ For the project which uses land allocated or leased out by the State or is permitted by the State to repurpose land, the handling of the rights to use land and property on land shall comply with regulations of law on land and relevant regulations of law;

+ During the project liquidation, if the investor being a business organization is dissolved or on the verge of bankruptcy, the project liquidation shall comply with regulations of law on dissolution and bankruptcy.

2. Regulations on termination of an investment project in case the investment registration authority cannot contact the investor in Vietnam

Regulations on termination of an investment project in case the investment registration authority cannot contact the investor according to Article 58 of Decree 31/2021/ND-CP are as follows:

- Where a project is terminated and the investment registration authority cannot contact the investor or the investor’s legal representative, the investment registration authority shall follow the procedures below:

+ Make a record on suspension of the investment project and failure to contact the investor;

+ Send a document to the address registered by the investor with the investment registration authority to request the investor contact to the investment registration authority to settle the project termination. If the investor fails to contact within 30 days from the day on which the document is sent, the investment registration authority shall follow the procedures mentioned in Point c of Clause 1 of Article 58 of Decree 31/2021/ND-CP;

+ Send a written request for assistance in contacting the investor to the People’s Committee of the commune where the investor resides (in the case of domestic individual investors) or to the diplomatic mission in Vietnam of the country of the investor’s nationality (in the case of foreign investors), and publish a notice requesting the investor to contact the investment registration authority within 90 days on the National Investment Portal for settling of the project termination.

- After all measures specified in Clause 1 of this Article are taken and the investor or the investor’s legal representative cannot be contacted after 12 months from the date of termination of the project, the investment registration authority shall issue a decision on project termination.

- After the investment registration authority issues such decision, assets of the project shall be managed in accordance with regulations of the civil law on management of property of persons who are absent from their place of residence.

- The competent authority shall, within its jurisdiction, perform the following tasks:

+ The investment registration authority shall appoint a person to supervise the management of assets of the project terminated as prescribed in Article 58 of Decree 31/2021/ND-CP at the request of the competent authority or a person having relevant rights or benefits, unless otherwise prescribed by law;

+ The tax authority and customs authority shall take the measures prescribed by regulations of law on tax administration and relevant regulations of law to collect tax debts and other financial obligations (if any) of the investor to the State;

+ The land authority shall expropriate land and settle property on land if the project is subject to land expropriation as prescribed by regulations of law on land;

+ The labor authority shall assist workers who lose their jobs and provide relevant benefits in accordance with regulations of law on labor;

+ Other competent authorities shall perform state management of the investment project within their jurisdiction as prescribed by law.

- Every request or dispute between the investor and other entities over rights and obligations relevant to the investment project shall be settled by a court or arbitration body as agreed upon by the parties and in accordance with Vietnam’s law.

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE