Forms of selecting investors to execute investment projects in Vietnam

Forms of selecting investors to execute investment projects in Vietnam (Internet image)

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

1. Forms of selecting investors to execute investment projects in Vietnam

According to Clause 1, Article 29 of the Law on Investment 2020, the investor selection shall be carried out by:

- Holding land use right auction in accordance with regulations of law on land; or

- Bidding to select an investor in accordance with regulations of law on bidding; or

- Approving an investor as prescribed in Clauses 3 and 4 of Article 29 of the Law on Investment 2020.

+ If a land use right auction is held but only one person registers for participation in the auction or the auction is unsuccessful in accordance with regulations of law on land or if bidding is conducted to select investors but only one investor registers for participation in the bidding in accordance with regulations of law on bidding, the competent authority shall carry out the procedures for approving an investor if the investor satisfies the conditions prescribed by relevant law.

+ For an investment project subject to approval for its investment guidelines, the competent authority shall grant approval for both investment guidelines and investor without holding a land use right auction or bidding to select investor in the following cases:

++ The investor has the land use rights, except for the case where the State expropriates land for national defense and security purposes or for socio-economic development in the national or public interest in accordance with regulations of law on land;

++ The investor receives the agricultural land use rights, receives the agricultural land use rights as contributed capital or leases the agricultural land use rights to execute an investment project on non-agricultural production or business and the land is not subject to land expropriation by the State in accordance with regulations of law on land;

++ The investor executes the investment project in an industrial park or hi-tech zone;

++ Other cases not subject to an auction or bidding in accordance with regulations of law.

2. Regulations on adjusting the investment project in Vietnam

Regulations on adjusting the investment project in Vietnam under Article 41 of the Law on Investment 2020 are as follows:

- During execution of an investment project, the investor is entitled to adjust its objectives, transfer the project in part or in full, merge projects or fully divide or partially divide a project into multiple projects or exercise the rights to use land and property on land which is part of the investment project to contribute capital to establish an enterprise, carry out business cooperation or carry out other activities, and the aforementioned activities shall comply with regulations of law.

- The investor shall follow procedures for adjusting the investment registration certificate if the adjustment to the investment project changes any content of the investment registration certificate.

- The investor that has an investment project whose investment guidelines have been approved shall follow procedures for approving the adjustment to the investment guidelines in one of the following cases:

+ Any objective specified in the written approval for investment guidelines is changed; any objective that is subject to approval for investment guidelines is added;

+ The land area is increased or reduced by 10% or more than 30 hectares or the investment location is changed;

+ The total investment capital is increased or reduced by 20% or more, thereby changing the scale of the investment project;

+ Extension of the project execution schedule results in total duration of the project being extended by more than 12 months compared to that stated in the first written approval for investment guidelines;

+ The duration of the investment project is adjusted;

+ Any technology that has been appraised or about which opinions have been collected during the process of approving the investment guidelines is changed;

+ There is a change of the investor in the investment project whose investment guidelines are approved together with approval for the investor before the exploitation or operation of the project or there is a change of conditions (if any) applicable to the investor.

- With respect to the investment project whose investment guidelines are approved, the investor is not allowed to extend the investment execution schedule by more than 24 months compared to that stated in the first written approval for investment guidelines, except for one of the following cases:

+ It is necessary to remedy the consequences of an event of force majeure in accordance with the civil law and the land law;

+ The project execution schedule is adjusted because the State delays allocating or leasing out land to the investor or allowing the investor to repurpose land.

+ The project execution schedule is adjusted at the request of a regulatory agency or the regulatory agency delays in performing administrative procedures;

+ The investment project is adjusted because the regulatory agency changes the planning;

+ Any objective specified in the written approval for investment guidelines is changed; any objective that is subject to approval for investment guidelines is added;

+ The total investment capital is increased or reduced by 20% or more, thereby changing the scale of the investment project.

- The regulatory agency that has the power to approve investment guidelines also has the power to approve the adjustment to investment guidelines.

If a request for adjustment of an investment project results in the project being subject to approval for its investment guidelines by an authority at a higher level, such authority will have the power to approve the adjustment to investment guidelines as prescribed in this Article.

- Procedures for adjusting investment guidelines are specified in Articles 34, 35 and 36 of the Law on Investment 2020.

- If a request for adjustment of an investment project results in the project being subject to approval for its investment guidelines, the investor has to apply for approval for investment guidelines before adjusting the investment project.

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