Issue 010322 – Procedures for adjusting investment projects subject to the provincial People’s Committees’ approval of investment guidelines

Dear Valued Clients,

According to the Law on Investment No. 61/2020/QH14 (“the “Law”), during the implementation of investment projects, investors are entitled to adjust their projects. For investment projects subject to the provincial People’s Committees’ approval of investment guidelines (“AIG”), when adjusting the investment projects, investors have to comply with the procedures as prescribed by law.

During execution of an investment project, the investor is entitled to adjust its objectives, transfer the project in part or in full, merge projects or fully divide or partially divide a project into multiple projects or exercise the rights to use land and property on land which is part of the investment project to contribute capital to establish an enterprise, carry out business cooperation or carry out other activities, and the aforementioned activities shall comply with regulations of law[1].

I. Dossiers for adjusting investment projects subject to the provincial People’s Committees’ AIG

A set of application includes[2]:

• An application form for adjustment of the investment project;
• A report on investment project’s progress by the time of adjustment;
• The investor’s decision on investment project adjustment if the investor is an organization;
• Explanation or documents relating to the adjustment of the contents specified in Article 33.1(b)(c)(d)(dd)(e)(g) of the Law[3] (if any).

II. Procedures for adjusting investment projects subject to the provincial People’s Committees’ AIG[4]

(i) Investors are required to follow procedures for approval for adjustment of the investment guidelines[5]

The investor that has an investment project subject to the provincial People’s Committees’ AIG shall follow procedures for approving the adjustment to the investment guidelines in one of the following cases:

• Any objective specified in the written AIG is changed; any objective that is subject to AIG is added;
• The land area is increased or reduced by 10% or more than 30 hectares or the investment location is changed;
• The total investment capital is increased or reduced by 20% or more, thereby changing the scale of the investment project;
• Extension of the project execution schedule results in total duration of the project being extended by more than 12 months compared to that stated in the first AIG;
• The duration of the investment project is adjusted;
• Any technology that has been appraised or about which opinions have been collected during the process of approving the investment guidelines is changed;
• There is a change of the investor in the investment project whose investment guidelines are approved together with approval for the investor before the exploitation or operation of the project or there is a change of conditions (if any) applicable to the investor.

Procedures for adjusting the investment project:

Step 1: Investor submits 04 sets of application to the investment registration authority.

Step 2: Within 03 working days from the receipt of the valid applications, the investment registration authority shall send them to competent authorities as prescribed in Article 33.4(b) of the Decree No. 31/2021/ND-CP[6] to seek their opinions about the adjustments;

Step 3: Within 15 days from the receipt of the valid applications, the enquired authorities shall give their opinions about the adjustments under their state management;

Step 4: Within 25 days from the receipt of the valid applications, the investment registration authority shall prepare an appraisal report on the adjustments for submission to the provincial People’s Committee;

Step 5: Within 07 working days from the receipt of the applications and appraisal report of the investment registration authority, the provincial People’s Committee shall decide to approve adjustment of the investment guidelines.

The decision on approval for adjustment of the investment guidelines shall be sent to the investment registration authority and investor, the investor approving authority in the case of investor approval as prescribed in Article 29.3 of the Law[7], Departments and agencies related to execution of the investment project.

Step 6: Pursuant to the decision on Approval for adjustment of the investment guidelines, the investor shall follow procedures for adjusting the decision on investor approval (if any) or investment registration certificate (“IRC”) (if any);

Note: For adjustment of investment projects in case of (a) transfer of part or whole of investment projects; (b) investor receives the investment project which is collateral; (c) division and merger of investment projects; (d) division, consolidation, merger or conversion of type of business organization; (e) exercise of rights to use land and property on land which is part of investment projects for contributing capital to enterprises; (f) exercise of rights to use land and property on land which is part of investment projects for business cooperation; (g) adjustment under a judgment or decision of a court or arbitration; (h) adjustment and extension of the duration, investors shall follow the procedures according to provisions from Articles 48 to Articles 55 of the Law.

(ii) Investors are not required to follow procedures for approval for adjustment of the investment guidelines

If any content of the investment project is adjusted in a case other than the case specified in Article 41.3 of the Law, the investor is not required to follow procedures for approval for adjustment of the investment guidelines.

The investor shall follow procedures for adjusting the IRC (if any) according to the following steps[8]:

If the adjustment of the investment project is related to the change of the investment project name or investor name on the IRC,

Step 1: Investor submits an application form for adjustment of the investment project to the investment registration authority enclosed with the documents concerning such change.

Step 2: Within 03 working days from the receipt of the application form for adjustment of the IRC, the investment registration authority shall adjust the IRC.

If the adjustment of an investment project is related to other contents,

Step 1: Investor submits 01 set of application in Section I above to the investment registration authority.

Step 2: Within 10 days from the receipt of the valid application, the investment registration authority shall adjust the IRC.

As usual, we hope you find this Legal Article helpful and look forward to working with you in the upcoming time.

Kind regards,

ENT Law LLC

The full version of this Legal Article can be found here.

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[1] Article 41.1 of the Law.

[2] Article 45.1 of the Decree No. 31/2021/ND-CP.

[3] Article 31.1 of the Law:

“1. Investment projects regardless of capital sources in any one of the following cases:

a) Investment projects that require relocation of 10,000 people or more in mountainous areas or 20,000 people or more in other areas;

b) Investment projects on construction of: airports and aerodromes; runways of airports and aerodromes; international passenger terminals; cargo terminals of airports and aerodromes with a capacity of at least 1 million ton per year;

c) New investment projects on passenger air transport business;

d) Investment projects on construction of ports and wharves of special seaports; ports and wharves in which investment is at least VND 2,300 billion within the category of Class I seaports;

dd) Investment projects on petroleum processing;

e) Investment projects which involve betting and casino services, excluding business in prize-winning electronic games for foreigners;

g) Investment projects on construction of residential housing (for sale, lease or lease purchase) and urban areas that use at least 50 hectares of land or less than 50 hectares of land but with a population of at least 15,000 people in an urban area; or that use at least 100 hectares of land or less than 100 hectares of land but with a population of at least 10,000 people in a non-urban area; or investment projects regardless of the area of land used or population within the safety perimeter of relics recognized by the competent authority as the national and special national relics;

h) Investment projects on construction and operation of infrastructure in industrial zones and export processing zones.”

[4] Article 45 of the Decree No. 31/2021/ND-CP.

[5] Article 41.3 of the Law.

[6] Article 33.4(b) of the Decree No. 31/2021/ND-CP:

“4. Procedures for investment guideline approval by a provincial People’s Committee are as follows:

b) Within 03 working days from the receipt of the valid applications mentioned in Point a of this Clause, the investment registration authority shall send relevant documents to Departments, People’s Committees of the district where the project is expected to be executed and agencies concerned to seek their appraisal opinions on the contents under their state management as prescribed in Clause 6 or Clause 8 Article 31 hereof;”

[7] Article 29.3 of the Law:

“3. If a land use right auction is held but only one person registers for participation in the auction or the auction is unsuccessful in accordance with regulations of law on land or if bidding is conducted to select investors but only one investor registers for participation in the bidding in accordance with regulations of law on bidding, the competent authority shall carry out the procedures for approving an investor if the investor satisfies the conditions prescribed by relevant law.”

[8] Article 43.3 and Article 47 of the Decree No. 31/2021/ND-CP.