Conditions and procedure for extension of investment project

Conditions and procedure for extension of investment project

In order for clients to better understand the process and procedures for adjusting the duration of investment project, Siglaw would like to advise as follows:

1. The maximum duration of investment projects in Vietnam

According to the provisions of Article 44 of the Investment Law 2020, effective from January 1, 2021, the maximum operation duration of investment projects in Vietnam is as follows: no more than 70 years for projects in economic zones; 50 years for projects outside economic zones; 70 years for projects outside economic zones in areas with difficult or extremely difficult socio-economic conditions or investment projects with large investment capital but slow capital recovery.

If a project uses land allocated or leased 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 in the provisions mentioned above.

2. Investment projects are not allowed to be extended

Also according to the provisions of Article 44 of the Law on Investment 2020 effective from January 1, 2021, there are two cases where an investment project is not allowed to be extended, including:

• a) Investment projects using obsolete technology, potentially causing environmental pollution or natural-resource intensive projects.

• b) Investment projects in which the investor must transfer assets without refund to the State of Vietnam or the Vietnamese side.

3. Components of dossiers and order and procedure for extension of investment projects

Step 1: Prepare applications for the adjustment registration

In order to extend the investment project, the investor must submit 01 application for adjustment of the Investment Registration Certificate to the agency that has issued the Certificate to the investor. An application file for adjustment of the Investment Registration Certificate includes the following documents:

• Written request for adjustment of investment project.

• Report on project implementation and report on investment project implementation up to the time of request for adjustment of investment project.

• The decision of the investor on adjustment of investment project (Decision and valid copy of meeting minutes of Members' Council/General meeting of shareholders/general partner/owner of economic organization) implementation of investment projects on adjustment of investment projects or other legal documents as prescribed by law).

• Certified copy of the audited financial statements closest to the adjusted date.

• Information for making project proposals: Number of foreign workers, number of Vietnamese workers; Phone number, investor email, Company phone number in Vietnam, Head office area.

• Copies of issued Investment Registration Certificates/Investment Certificates/Investment Licenses/Business Licenses (for projects not subject to investment policy decisions); Or a copy of the Decision on Investment Policy and the Investment Registration Certificate/ Investment Certificate/ Investment License/ Granted Business License (if any) (In case the investment project belongs to investment policy decision-making authority).

• Copy of Tax Registration Certificate (In case the company has not separated the Investment Registration Certificate and the Business Registration Certificate).

• Authorization letter in case the investor does not directly submit the application.

Step 2: Submit application for the adjustment registration

After preparing the dossier, the investor submits the dossier to the competent authority. Investors can choose one of the following two forms of application:

• Submit directly at the competent investment registration agency.

• Online declaration of information about investment projects at the National Foreign Investment Information System (dautunuocngoai.gov.vn or fdi.gov.vn). Within 15 working days from the date of online declaration, the investor must submit an amendment to the Investment Project Certificate to the Investment Registration Authority.

• Agencies competent to adjust investment certificates: Any agency that issues investment registration certificates shall have the authority to amend investment registration certificates for investors.

Step 3: Process the application and get the result

The investment registration agency has the authority to receive and examine the application, if the application is complete and valid, it shall receive the application and issue a Certificate of Receipt of the application to the Investor; if the components of the dossier are incomplete, the receiving specialist/guide will explain to the investor to supplement and complete the dossier.

Within 03 - 05 working days from the day on which the complete application is received, the Investment Registration Authority shall amend the Investment Registration Certificate; in case of refusal to amend the Investment Registration Certificate, the investor must be notified in writing and clearly state the reasons therefor.

Investors will receive settlement results based on the appointment date on the application receipt.

4. Some notes on investment project extension

• Only when it is time to extend the investment project, the enterprise has fully contributed capital in accordance with current law and fulfilled all investment reports and other conditions as prescribed in the Investment Registration Certificate; the enterprise is allowed to extend the term of investment projects.

• Enterprises can make parallel adjustments to other contents on the Investment Registration Certificate together with the procedures for extending the Investment Registration Certificate.

• Ideally, before the project's license expires, about 03 - 05 months, the company needs to carry out procedures to renew the investment registration certificate and at the same time extend the project implementation period.

The above is the consultancy of Siglaw on the issue of extending investment projects, if investors are interested in this content or have a need to extend investment projects, please contact us for  the detailed consultancy.