Issue 010323 – Investment project transfer

Introduction 

Dear Valued Clients,

The transfer of an investment project happens when an investor transfers either partly or completely his/her project to another investor through an investment project transfer contract.

An investment project assignment contract bears the essence and basic characteristics of an asset purchase and sale contract, in which the property of this type of contract is an investment project or a part of the investment project.

In this Legal Guide, we will summarize and clarify regulations related to the conditions, order and procedures for transferring investment projects in accordance with the provisions of the Law on Investment No. 61/2020/QH14 dated 17^th June 2020 promulgated by the National Assembly (“LOI 2020”).

1. Conditions for transfer of investment projects

Pursuant to Article 46.1 of the LOI 2020 stipulates:

An investor has the right to transfer all or part of an investment project to another investor when the following conditions are satisfied:

(i)       The investment project or part of the transferred investment project is not terminated according to the provisions of Article 48.1 and Article 48.2 of the LOI 2020;

(ii)      Foreign investors receiving transfer of investment projects, part of investment projects must satisfy the conditions specified in Article 24.2 of LOI 2020;

(iii)     Conditions prescribed by the law on land in the case of transfer of investment projects associated with the transfer of land use rights and land-attached assets;

(iv)     Conditions prescribed by law on housing and law on real estate business in case of transfer of housing construction investment project, real estate project;

(v)      Conditions specified in the written approval of investment policies, the Investment Registration Certificate or other relevant laws (if any);

(iv)      When transferring an investment project, in addition to complying with the provisions of Article 46 of the LOI 2020, state enterprises are responsible for complying with the provisions of law on management and use of investment state capital. into production and business at the enterprise before making adjustments to investment projects.

2. Dossier of application for adjustment of investment project

According to the provisions of Article 48.5 of Decree No. 31/2021/ND-CP dated March 26, 2021 of the Government detailing and guiding the implementation of a number of articles of the investment law (“Decree 31”), components of the application file for adjustment of the investment project include:

(i)       A written request for adjustment of the investment project;

(ii)      Report on the implementation of the investment project up to the time of transfer of the investment project;

(iii)     Contract or contract in principle on the transfer of part or the whole investment project;

(iv)      A copy of the document on the legal status of the investor transferring and receiving the transfer;

(v)      Copy of Investment Registration Certificate; Decision approving the investment policy; Decision on investor approval (if any);

(vi)       A copy of the BCC contract (for investment projects in the form of a BCC contract);

(vii)      A copy of one of the following documents of the investor receiving the investment project: Financial statement of the last 02 years or audit report of investor’s equity, commitment to financial support; of the parent company, the financial institution’s commitment to financial support, the guarantee of the investor’s financial capacity, the document explaining the investor’s financial capacity.

3. Procedures and process for investment project transfer

In case the conditions for transferring an investment project are satisfied as prescribed in Article 46.1 of the LOI 2020, the procedures for transferring the whole or a part of the investment project shall be carried out in the following order:

(i)      For an investment project that has been approved for investment policy concurrently with the investor’s approval, but the investor transfers the entire investment project before the exploitation project is put into operation or there is a change. conditions for investors;

(ii)      For an investment project that has been approved for investment policies and the transfer of the project changes the content of the approval of the investment policy in one of the cases specified at Points 41.3(a), 41.3(b) and 41.3(c), 41.3(d), 41.3(đ), and 41.3(e) of the LOI 2020.

Procedures for project adjustment in cases (i) and (ii) are carried out as follows:

Step 1: Submit 08 sets of dossiers to the Ministry of Planning and Investment or submit 04 sets of dossiers to the Investment Registration Authority corresponding to the competence to approve the project investment policy;

Step 2: The competent authority considers the conditions for transferring investment projects as prescribed in Article 46.1 of the LOI 2020 to decide to adjust the investment project according to the corresponding provisions in Articles 44, 45 and 46 of Decree 31.

(iii)      For an investment project that has been approved for investment policies but the transfer of the project does not change the content of the approval of the investment policy in one of the cases specified at Points 41.3(a), 41.3(b) and 41.3(c), 41.3(d), 41.3(đ), and 41.3(e) of the LOI 2020, the investor transferring the project shall carry out the procedures for adjusting the decision on investor approval according to the following provisions:

Step 1: Submit 04 sets of dossiers to the Investment Registration Authority, in which the written request for adjustment of the investment project is replaced by the written request for approval of the adjustment of the investor;

Step 2: Within 03 working days from the date of receipt of the valid application, the investment registration agency shall send the dossier to collect opinions from the relevant competent state agency at the same level on the satisfaction of the requirements. requirements specified at Points 33.4(b), 33.4(c) and 33.4(d) of the LOI 2020;

Step 3: Within 15 days from the date of receipt of valid dossiers, the agencies that are consulted on the contents within the scope of their state management shall send them to the Investment Registration Authority. ;

Step 4: Within 25 days from the date of receipt of a valid application, the Investment Registration Authority shall make an appraisal report containing the contents specified at Points 33.4(b), 33.4(c) and 33.4(d) of the LOI 2020, submit to the People’s Committee of the province;

Step 5: Within 07 working days from the date of receipt of the application and appraisal report, the People’s Committee of the province shall decide to approve the adjustment of the investor;

Step 6: The decision to approve the adjustment of the investor records the transferor and the transferee, the part of the transferred project (if any) and is sent to the Investment Registration Authority, the investor. the transferor and the investor receiving the transfer.

(iv)      For an investment project that has been approved for investment policy and has been put into operation, the investor is not required to carry out the procedures for approving the adjustment of investment policy when transferring the project.

(v)       For an investment project that has been granted an Investment Registration Certificate and is not subject to approval of investment policies or has been approved for investment policies but does not fall into the cases specified in Article 41.3 LOI 2020.

Procedures for project transfer in cases (iv) and (v) are carried out as follows:

Step 1: The investor transferring the investment project shall submit 01 set of dossier to the Investment Registration Authority;

Step 2: The investment registration authority considers the conditions for transferring investment projects specified in Article 46.1 of the LOI 2020 to adjust the investment project in accordance with Article 47 of Decree 31.

Step 3: Send the adjusted investment registration certificate to the transferring investor and the transferee investor.

(vi)      Procedures for adjusting investment projects in case foreign investors receive investment projects transfer and establish economic organizations to implement investment projects:

Step 1: The investor transferring the investment project shall carry out the procedures for adjusting the investment project according to relevant regulations in the above cases;

Step 2: After completing the prescribed procedures, the foreign investor receiving the project transfer shall carry out the procedures for establishing an economic organization according to the provisions of the law on enterprises corresponding to each type of economic organization.

(vii)      For projects that are not subject to approval of investment policies and application for an Investment Registration Certificate.

The transfer of an investment project or the transfer of property ownership rights to the investor receiving the investment project after the transfer must comply with the provisions of the law on civil, enterprise, real estate business and regulations. other provisions of relevant laws.

We hope you find this article useful look forward to working with you in the future.

Kind regards,

ENT Law LLC        

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