Investors have to adjust their initial projects for various reasons. During the implementation, adjustments are required to comply with the provisions of the Law on Investment and other relevant Laws. This article by NPLaw will provide essential information on investment project adjustment, including the conditions and procedures specified in the Law on Investment 2020.
1. Common cases of the investment project adjustment
Under the Law on Investment, an “Investment Project” can be understood as a set of proposals for contributing medium- or long-term capital to carry out business activities within a specific location and timeframe. The Investment Registration Certificate is a written or electronic document issued by the investment management authority, recording the investor’s registered information about his/her investment project.
During implementation, companies are entitled to adjust their investment projects and adjust the Investment Registration Certificate under Article 41 of the Law on Investment, as follows:
During the implementation of an investment project, an investor has the right to adjust objectives, transfer part or all of the investment project, merge projects or divide a project into multiple projects, use land-use rights and assets on land within the investment project for contributing capital for enterprise establishment and business cooperation, or make other adjustments in compliance with legal regulations.
Investors are required to implement procedures for adjusting the Investment Registration Certificate when project adjustments change the content of the Certificate.
Thus, the adjustment of an investment project is a mandatory procedure when specific changes occur in the project's objectives, scale, location, format, capital, duration, etc. These changes must comply with the provisions of the Law on Investment and related regulations.
The regulations on investment project adjustments are detailed in Section 4, Chapter IV of Decree No. 31/2021/ND-CP. Accordingly, the investment project adjustments can be categorized into the following cases:
- Adjusting an investment project when the investor transfers part or all of the investment project.
- Adjusting an investment project when the investor acquires an investment project as a secured asset.
- Adjusting an investment project in case of project division, separation or merger.
- Adjusting an investment project in case of the division, separation, merger, consolidation, or conversion of the type of economic organization.
- Adjusting an investment project when land-use rights and attached assets within the project are used to contribute capital to an enterprise.
- Adjusting an investment project when land-use rights and attached assets within the project are used for business cooperation.
- Adjusting an investment project following a judgement or decision of Court or Arbitration.
- Adjusting or extending the duration of an investment project.
2. Conditions for adjusting an investment project
The conditions for adjusting an investment project are not entirely the same as the conditions for conducting investment project adjustment procedures. Accordingly, for projects with minor adjustments, or those that are not particular projects, investors are not required to implement adjustment procedures with the state authority. In such cases, adjustments or changes to the investment project must primarily comply with relevant legal conditions (e.g., conditions for project transfer; conditions for project division, separation, or merger; and conditions for contributing capital using land-use rights).
For significant projects or projects involving substantial adjustments, investors must follow the adjustment procedures with state authorities. However, the Law on Investment does not also provide general regulations on the conditions for these procedures, instead, specific conditions are set forth for each type of adjustment. These cases are outlined in Decree No. 31/2021/ND-CP.
3. Important notes for adjusting an investment project
With years of experience providing professional legal advice services, NPLaw highlights the following notes that companies should thoroughly understand before registering to adjust an investment project or the Investment Registration Certificate. Specifically:
Some information on the Investment Registration Certificate is related to enterprise registration information. Thus, adjusting the Investment Registration Certificate may require corresponding updates to the enterprise registration information. For instance, information about an investor, company members, or shareholders; or the name of the investment project may be associated with the name of the economic organization executing the project (a foreign-invested company is established based on the Investment Registration Certificate, so in reality, an investor often chooses a project name that matches or relates to its name). Therefore, companies must properly, completely, and timely implement registration and notification of changes in enterprise registration content associated with the content of adjustment to the investment project or to the Investment Registration Certificate. Failure to comply or delay in completing the Investment Registration Certificate amendment procedures may result in administrative fines.
For example, regarding the registration of changes to investor information. Investor information is recorded at the beginning of the Investment Registration Certificate and includes the following details: For individual investors, including Full name, Gender, Date of Birth, Nationality, Documents on individual legal status, Permanent Residence, Current Address, and Contact Information; For corporate investors: Company Name, information on the Establishment License, Headquarters Address, Contact Information, and details of the Legal Representative. The information of an investor is also related to enterprise registration information (information about owner/ company members/ shareholders). Therefore, such an amendment may require the company to register changes to the enterprise registration content. …
4. How are violations in investment project adjustments handled?
A company may be entitled to incur administrative fines if it fails to complete or delays completing the procedures for amending the Investment Registration Certificate as defined by Point b, Clause 2, Article 7 of Decree No. 122/2021/ND-CP on administrative sanctions in the sector of planning and investment:
- A fine of 70,000,000 VND to 100,000,000 VNVND shall be imposed for failing to implement procedures for adjusting the investment project in case where the adjustment results in changes to the content of the Investment Registration Certificate.
5. Introduction to NPLaw’s legal service
With years of experience in the sector of enterprise and investment, NPLaw is always willing to provide investors and companies with the most valuable and optimal advice on the aforementioned important matters and many others to lawfully adjust the investment project and the Investment Registration Certificate, maximize investment incentives, and support sustainable growth and prosperity of them.
As our legal partners, Clients will benefit from the following comprehensive legal services:
- Legal and policy advice related to the adjustment contents:
+ Advising on registration for adjusting the investment project’s Name;
+ Advising on registration for adjusting the Investor;
+ Advising on registration for adjusting the investment project’s Location;
+ Advising on registration for adjusting the investment project Objectives and Scale;
+ Advising on registration for adjusting the investment Capital (including changes in investor’s contributed and mobilized capital);
+ Advising on registration for adjusting the project’s Operational Duration;
+ Advising on registration for adjusting the project’s Implementation Process;
+ Advising on conditions and procedures for adjusting the investment project and the Investment Registration Certificate;
+ Advising and guiding the preparation of necessary documents and materials;
+ Drafting applications and related documents for registering and notifying the adjustment contents of the investment project and the Investment Registration Certificate.
+ Acting as authorized representative to submit applications, explain at the competent authorities, monitor the process of issuing the Certificate, and resolve issues related to the adjustment of the investment project and the Investment Registration Certificate.
+ Providing detailed guidance to investors and companies on post-adjustment requirements for the investment project and the Investment Registration Certificate.
+ Additional support services such as translation, legalization and notarization.
Moreover, we are committed to addressing your any inquiries when you choose NPLaw.
