Invest

What investors should know about the procedures of extending investment progress?

Trường Lăng

November 16, 2022

Invest

What investors should know about the procedures of extending investment progress?

Trường Lăng

November 16, 2022

For investors venturing in Vietnam, the delay of investment progress may lead to several penalties in accordance with regulations on investment . Yet, to avoid such pitfalls, the investors could consider the procedures of extending investment progress.

Legal basis for investment progress extension

According to the  Law on Investment 2020 , one of the most essential documents in the application dossier for an Investment Registration Certificate (IRC) is the Investment Project Proposal, which shall include suggested investment progress schedule and other information that related to the investment project, such as capital, scope of investment, the fulfillment of investment conditions. By law, the investment progress schedule is the commitment of the investors on how and when to deploy the investment project. Based on this progress schedule, Vietnamese authorities consider and issue the IRC to the Investor. 

Thus, the investors must include the following information in an investment progress schedule:

  • The progress of capital contribution and mobilization of capital sources
  • The progress of the main operational objectives of the investment project. In case the projects are divided into phases, the investors must specify each project phase. 
  • Other information related to the implementation of investment project according to regulations and requirements of authority

However, due to various reasons, the investors have to consider postponing the investment project in the course of implementing. Therefore, to create a favorable condition for investors in this situation, the Vietnamese government stipulates in Article 41 of the Law on Investment 2020 that the investors are allowed to adjust the investment project, including to extend the implementation schedule of the project. The procedure has to be proceeded by the investors by submitting one (01) set dossier including required documents upon request of the investment schedule extension to the Department of Planning and Investment. 

Procedures for extension in investment project progress 

According to Clause 2, Article 47 of Decree 31/2021/ND-CP guiding the Law on Investment (which refer to Clause 1, Article 44 of the same Decree), a dossier must include the following documents and be submitted to the Department of Planning and Investment (DPI) of the province where the business is located: 

  • A written request for adjustment of the investment project;
  • Report on the implementation of the investment project up to the time of adjustment;
  • The investor’s decision on the adjustment of the investment project, if the investor being an organization;
  • Explain or provide documents related to the adjustment of the investment project progress;
  • Authorization letter to carry out procedures (if any).

Within 10 days from the day on which the valid application is received, the authority shall amend the Investment Registration Certificate.

What should be aware of

According to Clause 2, Article 17, and Clause 2, Article 19 of Decree No.122/2021/ND-CP on sanctioning of administrative violations in the field of planning and investment, the investors shall be subject to fines should they fail to implement the project in accordance with the IRC. 

In particular, on failing to carry out the adjustment procedures of the IRC in case the adjustment of the investment project changes any content of the IRC, the investors are subject to a fine from VND 70.000.000 to VND 100.000.000. 

Meanwhile,  the investor may also be under the risk of being fined for failure to correctly comply with the Investment Registration Certificate, with the additional fine ranging from VND 70.000.000 to VND 100.000.000 as well. 

In addition, the investor may be forced to take remedial measures, including to carry out the procedures for re-issuance of the Investment Registration Certificate accordingly.

In conclusion

Legal implications and a good awareness of this will enable investors to avoid the pitfalls or issues that may arise later on. To navigate through the sophisticated legal process, and doing business successfully in Vietnam, investors need a right-hand man by their side. Viettonkin can be your trust-worthy partner! With our 13-year experience in a variety of sectors and industries, and our expert team in the Vietnamese market and legal system, we can help you walk through the challenges.  Consult our attorneys to know more details!

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