Issue 011223 – Procedures for issuance and amendment of investment registration certificate

 

 

Dear Valued Clients,

To have a commercial presence by investing in the form of establishing an economic organization in Vietnam, foreign investors need to carry out procedures to apply for an Investment Registration Certificate (“IRC”) for their project in Vietnam. The IRC is one of the essential legal documents that proves the rights of the investors to implement the project, in which records the information regarding the investment project, including project objectives, scale, investment capital, project implementation progress, etc.

In this article, we will introduce to you the procedures for the issuance of the IRC in form of establishing new economic organizations and the procedures for amending the IRC.

IRC is an essential legal document issued by competent state authorities based on the investor’s application, recording the investor’s establishment of a project in Vietnam in accordance with the provisions of the applicable law on investment, and implementation of such project based on the issued IRC.

1. Cases in which the investors have to obtain the IRC

Pursuant to the provisions of Article 37 and Article 23 of the Investment Law 2020, when investing in the form of establishing an economic organization, investors must carry out procedures for issuance of the IRC in the following cases:

a)       Investment projects of foreign investors; and

b)       Investment projects of foreign invested economic organizations, if such organizations:

• Has over 50% of its charter capital held by foreign investor(s) or, in case of a partnership, the majority of its general partners are foreigners; or
• Has over 50% of its charter capital is held by economic organization(s) mentioned in Item (i) of this Clause;
• Has Over 50% of its charter capital is held by foreign investor(s) and business organization(s) mentioned in Item (i) of this Clause.

An investor implements a project in the above case without an IRC, such investor shall subject to administrative sanctions as prescribed in Clauses 3 and 4, Article 19 of Decree 122/2021/ND-CP, including: a fine from 100,000,000 VND to 200,000,000 VND; and forced to carry out procedures for the issuance of IRC.

2. Contents on the IRC

According to Article 3.11 of the Law on Investment 2020: “investment registration certificate means a physical or electronic document bearing information registered by an investor about an investment project”

Accordingly, the IRC records the basic information regarding the project registered by the investors and approved by the licensing authority after evaluating and reviewing the investor’s registration dossier. Specifically, the IRC records the following information:[1]

(i)       Name of the investment project;

(ii)      The investor;

(iii)     Code of the investment project;

(iv)     Location and land area of the investment project;

(v)      Objectives and scale of the project;

(vi)     Capital investment in the investment project (including the investor’s contributed capital and raised capital);

(vii)    Term of the investment project;

(viii)    Project implementation schedule, including: Capital contribution and capital raising schedule; schedule of achievement of primary operational objectives of the investment project;

(ix)     Investment incentives or investment assistance, and basis or conditions for application thereof (if any);

(x)      Conditions applied to the investor executing the investment project (if any).

Investors are required to comply with the above contents recorded in the IRC when implementing investment projects in Vietnam. The competent state authority will base on the information recorded in the IRC to perform inspections and assessments on the compliance of the investor in implementing the project.

3. Procedures for issuance of the IRC

3.1. Authority competent to issue IRC

Depending on the location of the investment project, the authority competent to issue the IRC (“Investment Registration Authority”) will be determined as follows:[2]

a)       Management boards of industrial parks, export-processing zones, hi-tech zones and economic zone shall issue, amend and revoke the IRC with regard to the investment projects located therein, except for the case specified in item (c) below.

b)        Provincial Departments of Planning and Investment shall issue, amend and revoke IRC with respect to the investment projects outside industrial parks, export-processing zones, hi-tech zones and economic zones, except for the case in item (c) below.

c)        Departments of Planning and Investment of provinces where investment projects are executed shall issue, adjust and revoke IRC of the following investment projects:

• Investment projects executed in 02 provinces or more;
• Investment projects executed inside and outside industrial parks, export-processing zones, hi-tech zones and economic zones (at the same time);
• Investment projects executed inside industrial parks, export-processing zones, hi-tech zones and economic zones where management boards of such industrial parks, export-processing zones, hi-tech zones and economic zones have yet to be established or not under the management of the management boards of industrial parks, export-processing zones, hi-tech zones and economic zones.

3.2. Procedures for issuance of IRC

According to the Investment Law 2020, investors must carry out procedures to request approval of investment policies from the National Assembly, the Prime Minister or the Provincial People’s Committee if the investment project substantially affects the environment, or use large area of land, use large capital, affecting the social life. For the remaining investment projects, investors only need to carry out procedures for issuance of IRC.

3.2.1.  Procedures for issuance of IRC for projects not subject to approval for investment policy

a)       Regarding the procedures: for the issuance of the IRC, the investors prepare and submit 01 set of application dossier for an IRC to the Investment Registration Authority. Within 15 days from the date of receipt of valid dossiers, the Investment Registration Authority will issue the IRC.[3]

b)        The application dossier for issuance of the IRC includes the following documents:[4]

No.	Documents	Type of documents
1	Application for investment project implementation according to form A.I.1 attached to Circular 03/2021/TT-BKHDT	Original
2	Investment project proposal according to form A.I.4 attached to Circular 03/2021/TT-BKHDT	Original
3	Documents on the investor’s legal status – ID card/citizen ID card/Passport for individual investors; or – Certificate of establishment and operation for institutional investors	Certified copy
4	Document(s) proving the financial capacity of the investor including at least one of the following documents: – The investor’s audited financial statements for the last two years; – Investor’s bank account statement; – Other document proving the investor’s financial capacity.	– Consular legalized copy; – Certified copy; and – Certified translation copy.
5	Document(s) regarding the land use rights or other document identifying the right to use the location for implementation of the investment project, including one or several of the following documents depending on each case: – Certificate of land use rights, ownership of houses and other land-attached assets; – Lease contract for project location; – Construction permit of the project location; – Legal documents of the location owner.	Certified copy
6	Documents explaining the technology to be used in the investment project if the project requires appraisal and collection of opinions on the technology in accordance with the Law on Technology Transfer	Original/ Certified copy
7	Other documents relating to the investment project, and requirements on the eligibility and capacity of the investor in accordance with regulations of law (if any)
8	Authorization document for the person carry out the procedure (if any)	Original

3.2.2. Procedures for issuance of IRC of projects subject to approval for investment policy

In case the project is subject to investment policy approval, the procedure for granting the IRC will be carried out as follows:[5]

a)         In case the investment project has its investment policy approved together with approval for the investor: Based on the Decision on approval for investment policy, the Investment Registration Authority shall issue the IRC within 05 working days from the receipt of the Decision on approval for investment policy.

b)        In case the investment project has its investment policy approved and the investor has won the auction or bid or in case there is only one person registered to participate in the auction or bidding:

(i)         The investor submits a written request for issuance of the IRC according to form A.I.6 attached to Circular 03/2021/TT-BKHDT to the Investment Registration Authority;

(ii)        The Investment Registration Authority issues the IRC within 05 working days from the date of receiving the investor’s written request.

c)       In case the project is not subject to issuance of the IRC

(i)         The investor submits a written request for issuance of the IRC according to form A.I.6 attached to Circular 03/2021/TT-BKHDT, and a valid copy of the Decision on approval for investment policy (if any) to the Investment Registration Authority;

(ii)        The Investment Registration Authority issues the IRC within 05 working days from the date of receiving the investor’s written request.

4. Cases of amendment of the IRC[6]

In case there are any changes to one or several contents recorded on the IRC mentioned in Section 1 herein, the investor will have to carry out procedures to adjust the IRC.

If the investor does not carry out the procedures for amending the IRC in case of changing the content of the IRC, the investor will be subject to administrative sanctions as prescribed in Clause 3 and Clause 4, Article 17 of Decree 122/2021/ND -CP, including: a fine from 70,000,000 VND to 100,000,000 VND; and forced to carry out procedures to adjust the IRC.

5. Procedures for amendment of the IRC

5.1. Authority competent to amend the IRC

The authority competent to adjust the IRC is the Investment Registration Authority mentioned in Section 3.1.

5.2. Procedures for adjusting IRC in case the investment project is not subject to investment policy approval[7]

a)       In case of changing the name of the investment project or changing the name of the investor:

The investor submits 01 (one) set of application dossier for IRC amendment to the Investment Registration Authority. Within 03 working days from the date of receiving the written request to adjust the IRC, the Investment Registration Authority will adjust the IRC for the investor.

The application dossier for IRC amendment in this case includes:

(i)        Written request for amendment of investment project; and

(ii)        Documents related to changing the investment project name and investor name.

b)      In case of changing other contents:

The investor submits 01 (one) set of application dossier for IRC amendment to the Investment Registration Authority. Within 10 days from the date of receiving the written request to adjust the IRC, the Investment Registration Authority will adjust the IRC for the investor.

The application dossier for IRC amendment in this case includes:

• Written request for amendment of investment project; and
• Report on the implementation of investment projects up to the time of amendment;
• Investor’s decision on amending the investment projects for investors that are organization;
• Explaination document or documents related to the amendment (if any).

5.3.    Procedures for adjusting Investment Registration Certificate in cases subject to investment policy approval[8]

Based on the Decision on approval for investment policy, the Investment Registration Authority shall adjust the IRC within 05 working days from the date of receiving the Decision on approval for investment policy.

As always, we hope you find this Legal Article useful and look forward to working with you in the future.

Kind regards,

ENT LAW LLC

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

[1] Article 40 of the Law on Investment 2020

[2] Article 34 of Decree 31/2021/ND-CP

[3] Article 36 of Decree 31/2021/ND-CP

[4] Article 33.1 of the Investment Law 2020

[5] Article 35 of Decree 31/2021/ND-CP

[6] Article 41.2 Investment Law 2020

[7] Article 47 Decree 31/2021/ND-CP

[8] Article 35 of Decree 31/2021/ND-CP