Latest regulations on duration of investment projects in Vietnam

Latest regulations on duration of investment projects in Vietnam (Internet image) 

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

1. Duration of investment projects in Vietnam

Duration of investment projects under Article 44 of the Law on Investment 2020 is as follows:

- The duration of an investment project inside an economic zone shall not exceed 70 years.

- The duration of an investment project outside an economic zone shall not exceed 50 years. The duration of an investment project in a disadvantaged area or extremely disadvantaged area or a project with large investment capital but with slow rate of capital recovery may be longer but shall not exceed 70 years.

- If an investment project uses land allocated or leased out by the State, but the transfer of land is delayed, the delay shall not be included in the project duration or execution schedule.

- Upon expiry of the duration of an investment project, if the investor wishes to keep executing the investment project and satisfies the conditions as prescribed by law, the duration of the investment project may be extended but shall not exceed the maximum prescribed in Clauses 1 and 2 of Article 44 of the Law on Investment 2020, except for the following investment projects:

+ Investment projects using obsolete, environment threatening or resource-intensive technologies;

+ Investment projects in which the investor must transfer assets without reimbursement to the State of Vietnam or the Vietnamese side.

2. Regulations on suspension of investment projects in Vietnam

Regulations on suspension of investment projects under Article 47 of the Law on Investment 2020 are as follows:

- When suspending an investment project, the investor must notify the investment registration authority in writing. If the project has to be suspended in a force majeure event, the State shall allow the investor to be exempt from paying land rents or reduce land levies for the suspension period with a view to remedying consequences caused by the force majeure event.

+ The investment authority shall decide to suspend an investment project in part or in full in the following cases:

+ To protect sites/monuments, relics, antiques or national treasures in accordance with the Law on Cultural Heritage;

+ To rectify a violation of the law on environmental protection at the request of the environment authority;

+ To take measures to ensure occupational safety at the request of the labor authority;

+ Pursuant to a judgment or decision of a court or an arbitral award;

+ The investor fails to adhere to the written approval for investment guidelines or the investment registration certificate and recommits administrative violations after incurring penalties.

- The Prime Minister shall decide to suspend a project in part or in full if the project execution is detrimental or potentially detrimental to national defense and security at the request of the Ministry of Planning and Investment.

3. Regulations on guarantee for execution of investment projects in Vietnam

Regulations on guarantee for execution of investment projects under Article 43 of the Law on Investment 2020 are as follows:

- The investor shall pay a deposit or have a bank guarantee for investment project execution if the project uses land allocated or leased out by the State or is permitted by the State to repurpose land, except for the following cases:

+ The investor is the successful bidder for the right to use a land area that is allocated by the State for land levy or leased out by the State for a lump-sum rent;

+ The investor wins bidding for execution of an investment project using land;

+ The State allocates or leases out land to the investor on the basis of receipt of an investment project for which a deposit has already been paid or for which the capital has been fully contributed or raised following the schedule specified in the written approval for investment guidelines or the investment registration certificate;

+ The State allocates or leases out land to the investor for execution of an investment project on the basis of receipt of the land use right and assets on land from another land user.

- Based on the scale, nature and execution schedule of each investment project, the deposit for assurance of project execution is 01% - 03% of the investment capital of the project.

If a project comprises multiple investment phases, the amount of deposit shall be paid and returned in each phase of execution of the investment project, except for the case in which the deposit is not returned.

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