How does the law regulate the transfer of unfinished investment projects?

The transfer of unfinished investment projects must comply with the conditions prescribed by law. During the implementation of an investment project, the project owner has the full right to transfer part or the entire of the project to another investor. When conducting such a transfer, the transferring investor must implement procedures to change the investor with the competent investment authority. So, how is the transfer of unfinished projects regulated by law? The following article by NPLaw clarifies this issue in more detail.

I. What is the transfer of an unfinished investment project?

The transfer of an unfinished investment project refers to the act of an investor transferring part or all of their investment project to another investor through an investment project transfer agreement.

II. Conditions for transferring an unfinished investment project

According to Clause 1, Article 46 of the Law on Investment 2020, the conditions for transferring an investment project are as follows:

- The investor has the right to transfer all or part of the investment project to another investor when the following conditions are met:

+ The investment project or the transferred part of the project is not subject to termination as provided in Clauses 1 and 2, Article 48 of this Law;

+ Foreign investors receiving the transfer must satisfy the conditions stipulated in Clause 2, Article 24 of this Law;

+ Conditions stipulated by land law must be met if the transfer of the investment project involves the transfer of land use rights and assets attached to the land;

+ Conditions stipulated by housing law and real estate business law must be met if the transfer involves a housing construction project or real estate project;

+ Conditions set out in the investment policy approval, Investment Registration Certificate, or other relevant legal regulations (if any) must be met;

+ In addition to complying with the above provisions, state-owned enterprises must also comply with the law on management and use of state capital invested in production and business before adjusting the investment project.

Additionally, based on Article 49 of the Law on Real Estate Business 2014, the conditions for transferring an unfinished real estate project are as follows:

- A real estate project may be transferred if it satisfies the following conditions:

+ The project has been approved by a competent state authority and has a 1:500 detailed planning or an approved general site planning;

+ The project or part thereof has completed compensation and site clearance. For full project transfers involving infrastructure development, the corresponding technical infrastructure building must be constructed in accordance with the approved project schedule;

+ The project is not under dispute regarding land use rights and is not being seized to ensure judgment enforcement or compliance with administrative decisions by competent state authorities;

+ There is no decision by competent state authorities to revoke the project or land; if violations occurred during project implementation, the investor must have fully complied with the fines imposed.

- The transferring investor must hold the land use rights certificate for the entire or the part of the transferred project.

- The receiving investor must be a real estate enterprise with adequate financial capacity and must commit to continue the investment and business activities according to legal regulations, ensuring the progress and content of the project.

III. Legal consequences for unlawful transfers of unfinished projects

- A fine from 100,000,000 VND to 200,000,000 VND shall be imposed for the following violation: The investor transfers all or part of the investment project without meeting the required legal conditions (Point a, Clause 2, Article 16 of Decree 122/2021/ND-CP on administrative fines in planning and investment).

- According to Clause 4, Article 58 of Decree 16/2022/ND-CP on administrative fines in the field of construction, a fine from 800,000,000 VND to 1,000,000,000 VND shall be imposed on real estate project owners for any of the following acts:

- Transferring all or part of a project without following the prescribed procedures;

- Transferring all or part of a project without fulfilling all the required conditions;

- Transferring all or part of a project without holding a land use rights certificate, during a dispute over land use rights, or while the land is seized to ensure judgment enforcement; or if the receiving party is not a real estate business or lacks financial capacity, such cases will be fined under the government’s decree on administrative sanctions in the field of land;

- Supplementary fine : Suspension of real estate business activities from 03 to 06 months for violations under Points a, b, and e, Clause 3, Article 58 of Decree 16/2022/ND-CP.

IV. Notes on transferring unfinished investment projects

- The transfer of unfinished investment projects must comply with the conditions provided in Article 49 of the 2014 Law on Real Estate Business.

- The transfer of all or part of a real estate project must meet the following requirements:

+ The project objectives must remain unchanged;

+ The project content must not be altered;

+ The interests of customers and other related parties must be protected.

- The transfer of all or part of a real estate project must be approved in writing by the competent state authority that issued the investment decision. The receiving investor shall be granted the land use rights certificate, ownership of houses and other assets attached to land, or the changes shall be registered on the existing certificate held by the transferring investor in accordance with land law.

- The receiving investor does not need to re-apply for project documents, construction planning, or building permits if there are no changes to the approved investment policy or investment decision.