1. What is an Investment Project?
Pursuant to Clause 4, Article 3 of the Law on Investment 2020, an investment project means a set of proposals for medium-term or long-term capital contribution in order to carry out investment and business activities within a specified geographical area and for a definite duration.
Under Clauses 5, 6 and 7, Article 3 of the Law on Investment 2020, investment projects are classified as follows:
- An expansion investment project means an investment project for the development of an ongoing investment project through expansion of scale, increase in capacity, technological innovation, reduction of pollution, or environmental improvement.
- A new investment project means an investment project implemented for the first time or an investment project independent from an ongoing investment project.
- An innovative start-up investment project means an investment project implementing an idea on the basis of exploiting intellectual property, technology, or new business models, and having rapid growth potential.
2. Operational Term of an Investment Project
Pursuant to Article 44 of the Law on Investment 2020, the operational term of an investment project is as follows:
- The operational term of an investment project located in an economic zone shall not exceed 70 years.
- The operational term of an investment project located outside an economic zone shall not exceed 50 years.
For investment projects implemented in areas with difficult socio-economic conditions or areas with exceptionally difficult socio-economic conditions, or projects with large investment capital and slow capital recovery, the operational term may be longer but shall not exceed 70 years.
- For an investment project for which the State allocates or leases land but the investor is delayed in receiving the land handover, the period of delay in land handover by the State shall not be included in the operational term or the implementation schedule of the investment project.
- Upon expiry of the operational term, where the investor wishes to continue implementing the investment project and satisfies the statutory conditions, an extension of the operational term may be considered but shall not exceed the maximum term prescribed by law, except for the following investment projects:
- Investment projects using outdated technology, potentially causing environmental pollution, or being resource-intensive;
- Investment projects in which the investor is required to transfer assets without compensation to the Vietnamese State or the Vietnamese party.
3. Suspension of an Investment Project
The suspension of operation of an investment project pursuant to Article 47 of the Law on Investment 2020 is provided as follows:
(1) An investor suspending the operation of an investment project must notify the investment registration authority in writing.
In case of suspension due to force majeure, the investor shall be entitled to exemption from land rent or reduction of land use levy during the suspension period in order to remedy consequences caused by such force majeure event.
(2) The state investment management authority shall decide on the suspension, in whole or in part, of the operation of an investment project in the following cases:
- For the protection of relics, antiquities, artifacts, and national treasures in accordance with the Law on Cultural Heritage;
- For remediation of violations of environmental protection legislation at the request of the state authority in charge of environmental management;
- For the implementation of occupational safety assurance measures at the request of the state authority in charge of labor management;
- Pursuant to a legally effective judgment or decision of a Court, or an arbitral award;
- Where the investor fails to comply with the contents of the approved investment policy decision or the Investment Registration Certificate and, having been administratively sanctioned, continues to commit violations.
(3) The Prime Minister shall decide on the suspension, in whole or in part, of the operation of an investment project where the implementation thereof causes harm or poses a risk of harm to national defense or national security at the request of the Ministry of Planning and Investment.
4. Termination of Operation of an Investment Project
Pursuant to Article 48 of the Law on Investment 2020, termination of operation of an investment project is provided as follows:
– An investor shall terminate investment activities or the investment project in the following cases:
- The investor decides to terminate the operation of the investment project;
- In accordance with termination conditions stipulated in the contract or the enterprise charter;
- Upon expiry of the operational term of the investment project.
– The investment registration authority shall terminate, in whole or in part, the operation of an investment project in the following cases:
- The investment project falls under one of the cases specified in items (2) and (3), Section 3 above, and the investor is unable to remedy the conditions for suspension;
- The investor is no longer permitted to use the investment location and fails to carry out procedures for adjustment of the investment location within 06 months from the date on which it is no longer permitted to use such location;
Except where land is recovered due to failure to put land into use or delay in putting land into use.
- The investment project has been suspended and, upon expiry of 12 months from the date of suspension, the investment registration authority is unable to contact the investor or its lawful representative;
- The investment project is subject to land recovery due to failure to put land into use or delay in putting land into use in accordance with land legislation;
- The investor fails to make a security deposit or provide a guarantee for the security deposit obligation as prescribed by law for investment projects subject to project performance security requirements;
- The investor carries out investment activities on the basis of a sham civil transaction in accordance with civil legislation;
- Pursuant to a legally effective judgment or decision of a Court, or an arbitral award.
- For investment projects subject to investment policy approval, the investment registration authority shall terminate the operation of the investment project after obtaining the opinion of the authority granting such investment policy approval.
- The investor shall conduct liquidation of the investment project in accordance with the laws on asset liquidation upon termination of the investment project, except for the handling of land use rights and land-attached assets upon termination.
- The handling of land use rights and land-attached assets upon termination of operation of the investment project shall comply with land legislation and other relevant laws.
- The investment registration authority shall decide on the revocation of the Investment Registration Certificate in cases where the investment project is terminated in accordance with regulations, except in cases of partial termination of the investment project.
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