Conditions for extending the operational period of inveprojects

Currently, the demand for extending the operational period of investment projects is increasing. So, in which cases can the investment project operation period be extended and in which cases cannot? What are conditions for extending the operational period of investment projects? Let's explore with NPLaw the extension of the operational period of investment projects in the article below.I. Current situation of extending the operational period of investment projects

I. Current situation of extending the operational period of investment projects

Currently, the demand for business investment in projects is increasing. According to Clause 4, Article 3 of the Law on Investment 2020, an investment project is a collection of proposals for medium-term or long-term capital investment to implement business investment activities in a specific area, within a defined period.

The law regulates the duration of investment projects, so investment projects will operate within the specified time frame. Investors can commonly extend the operational period of their investment projects, but not all investment projects are granted the extension. The extension of the investment project's operational period must meet legal conditions and be executed according to regulated procedures and regulations.

II. Legal regulations on extending the operational period of investment projects

1. Which cases are eligible and ineligible for extending the operational period of the investment project?

Pursuant to Clause 4, Article 44 of the Law on Investment 2020, the duration of investment projects is regulated as follows:

- When the investment project reaches the end of its operational period, and its investor wishes to continue the investment project and meets the conditions as regulated by law, the extension of the investment project's operational period may be considered but not exceeding the maximum period as regulated, except for the following investment projects:

+ Investment projects use outdated technology, posing a risk of environmental pollution and resource depletion;

+ Investment projects fall under the cases where investors must perform the transfer without indemnification to the Vietnamese State or the Vietnamese party.

Accordingly, when the investment project's operational period terminates, the investor can extend the project’s period if meeting the conditions regulated by law. And the extension of the investment project's operational period will not be approved in the following cases:

+ The investment project uses outdated technology, posing a risk of environmental pollution and resource depletion;

+ The investment project falls under the case where the investor must transfer assets without indemnification to the Vietnamese State or the Vietnamese party.

2. Conditions for extending the operational period of the investment project

Pursuant to Clause 4, Article 27 of Decree 31/2021/ND-CP, it is regulated as follows:

- Except in cases where the extension is not allowed by regulations, investors who wish to continue the investment project upon the expiration of the operational period are entitled to be considered and decided to extend the operational period of the project by the investment registration authority if they meet following conditions:

+ In accordance with planning of nation, region, province, urban, and special administrative-economic units (if any); with the goals and directions of urban development, and with housing development programs (for construction investment projects of housing and urban areas);

+ Meeting conditions for land allocation and lease of land according to legal regulations of land law (in cases of requesting the extension of land use).

Accordingly, except in cases where the extension is not allowed, investors wishing to extend their investment projects must meet the aforementioned conditions.

3. Procedures for extending the operational period of the investment project 

Pursuant to Clause 2, Article 55 of Decree No. 31/2021/ND-CP, procedures for extending the operational duration of the investment project is implemented as follows:

+ For investment projects that have investment policies approved, the investor submits 04 sets of dossiers to the Ministry of Planning and Investment or the corresponding Investment Registration Authority with the authority to approve the investment project. 

+ The dossier includes: A proposal for extending the investment project's operation period; A decision approving the investment policy; An investment registration certificate; A decision approving the investor or equivalent legal documents; A land use rights certificate or equivalent legal documents; and Documents proving the investor's financial capacity, including one of the following: the investor's financial statements for the last two years, financial support commitment from the holding company (parent company), financial support commitment from a financial institution, guarantee of the investor's financial capacity, and other documents proving the investor's financial capacity.

+ Within 03 working days from the date of receiving the valid dossier mentioned above, the Ministry of Planning and Investment and the investment registration authority shall send the application to the land management authority and relevant agencies to obtain opinions on compliance with the conditions according to Clause 4, Article 44 of the Law on Investment and Clause 4, Article 27 of this Decree;

+ Within 10 days from the date of receiving valid dossiers, the agencies shall provide responses on whether conditions stated in Clause 4, Article 44 of the Law on Investment and Clause 4, Article 27 of this Decree are met;

+ Within 15 days from the date of receiving valid dossiers, the Ministry of Planning and Investment and the investment registration authority shall review conditions for extending the operational duration of the investment project according to Clause 4, Article 44 of the Law on Investment and Clause 4, Article 27 of this Decree to set up an appraisal report for submission to the investment policy approval Authority;

+ Within 03 working days from the date of receiving the report from the Ministry of Planning and Investment and the investment registration authority, the investment policy approval Authority decide to extend the operation period of the investment project;

+ For investment projects that have been issued the Investment Registration Certificate and do not require the investment policy approval, investors must submit 04 sets of dossiers according to point a of this Clause to the Investment Registration Authority. The Authority shall implement the procedures stated in points b, c, d, and đ of the Clause to extend the operational duration of the investment project.

III. Some questions about extending the operational period of the investment project

1. How long is the investment project operation period extended?

Pursuant to Article 44 of the Law on Investment 2020, the period (duration) of investment projects is regulated as follows:

1. The operational period of the investment project in the economic zone shall not exceed 70 years. 

2. The operational period of the investment project outside the economic zone shall not exceed 50 years. Investment projects implemented in areas with difficult socio-economic conditions and specially difficult socio-economic conditions, or investment projects with large capital investment but slow capital recovery may have a longer operational period, but not exceeding 70 years.

3. For investment projects where the State allocates or leases land but the investor is delayed in receiving the land, the time when the State delays in handing over the land does not count towards the operational period or the implementation schedule of the investment project.

4. When the investment project's operational period expires, and the investor wishes to continue the investment project and meets the conditions as regulated by law, the extension of the investment project's operational term may be considered but not exceeding the maximum term as regulated, except for the following investment projects:

5. Investment projects use outdated technology, posing a risk of environmental pollution and resource depletion;

6. Investment projects fall under the cases where investors must perform the transfer without indemnification to the Vietnamese State or the Vietnamese party.

Accordingly, investors are approved the extension of the investment project's operational period for no more than 70 years for projects within economic zones; no more than 50 years for projects outside economic zones; and no more than 70 years for projects implemented in areas with difficult socio-economic conditions and specially difficult socio-economic conditions, or projects with large investment capital but slow capital recovery.

2. The competent authority extends the operational period of the investment project.

Pursuant to point a, clause 2, Article 55 of Decree No. 31/2021/ND-CP regulating the procedures for extending the operation period of investment projects, it is implemented as follows:

+ For investment projects that have the investment policy approved, investors submit 04 sets of dossiers to the Ministry of Planning and Investment or the corresponding Investment Registration Authority with the authority to approve the project's investment policy.

Accordingly, the authority responsible for extending the operational period of the investment project is the Ministry of Planning and Investment or the corresponding Investment Registration Authority with the authority to approve the project's investment policy.

IV. Legal consulting services related to the extension of the investment project's operational period

One of the reputable law companies providing legal services for extending the operational period of investment projects is Ngoc Phu Law Company Limited. When using our services, you will receive dedicated support from highly qualified specialists and experienced lawyers. You will receive advisory opinions on the process of resolving issues related to extending the operational period of the investment project. In case you need assistance with extending the operational period of your investment project to protect your legal rights and interests, you can immediately contact NPLaw for timely support through the following contact information: