Tiếng Việt
中文 (中国)
日本語
Understanding the regulatory framework for investment projects is crucial for investors looking to establish operations in Vietnam. The duration of an investment project is a key component governed by specific laws and regulations. This article outlines how the duration is calculated and regulated according to the Investment Law 2020 and related decrees.
Regulatory Framework for the Duration of Investment Projects in Vietnam
General Rules
The duration of an investment project in Vietnam is governed by Article 44 of the Investment Law 2020, which stipulates the following maximum durations:
- Economic Zones: Projects in economic zones can have an operating term of up to 70 years.
- Outside Economic Zones: Projects located outside economic zones are limited to an operating term of 50 years.
Projects situated in areas with difficult or particularly difficult socio-economic conditions, or those with significant investment capital but slow capital recovery, can also be granted an operating term of up to 70 years, even if they are outside economic zones.
Special Considerations
- Delayed Land Handover: If the state delays in handing over land for the project, this delay period is not counted towards the operating term and implementation progress of the project.
- Extension of Operating Term: At the end of the operating term, investors can apply for an extension if they meet legal requirements. However, the extended term cannot exceed the maximum limits specified in Article 44, except for projects using outdated technology, those potentially causing environmental pollution, or those where assets must be transferred without compensation to the Vietnamese state or party.
Determining the Duration of Investment Projects in Vietnam
According to Clause 1, Article 27 of Decree 31/2021/ND-CP, the duration of an investment project begins from one of the following dates:
- Investor Approval and Investment Policy Decision: The date when the investor is granted the Investor Approval Decision and Policy Approval Decision simultaneously, or the date of issuance of the First Investment Registration Certificate.
- Land Allocation or Lease: For projects where the state allocates or leases land, or changes the land use purpose, the term starts from the date the investor receives the land allocation, lease decision, or land use change decision.
- Delayed Land Handover: If there is a delay in handing over the land, the term starts from the actual date of land handover.
Transferring Investment Projects
Investors can transfer all or part of an investment project to another investor under specific conditions outlined in Clause 1, Article 46 of the Investment Law 2020. The conditions for a valid transfer include:
- Project Continuation: The project or its portion must not be terminated under Clauses 1 and 2, Article 48 of the Investment Law.
- Foreign Investors: Foreign investors must meet the conditions specified in Clause 2, Article 24 of the Investment Law.
- Land Law Compliance: Transfer of projects involving land use rights must comply with land law provisions.
- Housing and Real Estate Compliance: For housing construction or real estate projects, the transfer must meet the relevant laws.
- Investment Policy and Registration: The transfer must adhere to conditions specified in the investment policy approval document, the investment registration certificate, and other relevant laws.
- State-Owned Enterprises: These entities must comply with laws on managing and using state capital before making adjustments to the project.
Transfer Procedures
Once the conditions for transfer are met, the following procedures apply:
- Approved Projects with Investment Registration Certificate: Investors must adjust the investment project as per Article 41 of the Investment Law.
- Other Projects: The transfer of the project or asset ownership follows the procedures outlined in civil, enterprise, real estate business laws, and other relevant legislation.
For investors, understanding these regulations ensures compliance and maximizes the project’s potential operating term. Monitoring regulatory changes and maintaining up-to-date documentation are crucial steps. Additionally, timely filing for extensions and carefully managing project transfers can prevent legal complications and support long-term investment success in Vietnam.
***ASL Law is a leading full-service and independent Vietnamese law firm made up of experienced and talented lawyers. ASL Law is ranked as the top tier Law Firm in Vietnam by Legal500, Asia Law, WTR, and Asia Business Law Journal. Based in both Hanoi and Ho Chi Minh City in Vietnam, the firm’s main purpose is to provide the most practical, efficient, and lawful advice to its domestic and international clients. If we can be of assistance, please email to [email protected].
ASL LAW is the top-tier Vietnam law firm for in-depth legal advice in Vietnam and internationally. If you need any advice, please contact us for further information or collaboration.
