Legal regulations on the suspension of investment registration certificates

The suspension of an Investment Registration Certificate occurs when an enterprise violates legal regulations or fails to satisfy investment conditions. Common causes include failure to implement the project in accordance with the approved schedule, non-fulfillment of financial obligations, or engagement in unlawful activities.

I. Current situation regarding the suspension of Investment Registration Certificates

The suspension of an Investment Registration Certificate occurs when an enterprise violates legal regulations or fails to satisfy investment conditions. Common causes include failure to implement the project in accordance with the approved schedule, non-fulfillment of financial obligations, or engagement in unlawful activities.

Depending on the severity of the violation, the suspension may be temporary or prolonged, directly affecting business operations and the lawful rights and interests of investors.

1. How is the suspension of an Investment Registration Certificate defined?

The definition of an Investment Registration Certificate is stipulated in Clause 11, Article 3 of the Law on Investment 2020 as follows:

An Investment Registration Certificate means a written document, in original or electronic form, recording the registration information of an investor regarding an investment project.

Accordingly, the suspension of an Investment Registration Certificate refers to the temporary cessation of the legal validity of the document recording an investor’s investment project registration information. The suspension decision is issued by a competent authority in order to handle violations or ensure compliance with legal regulations, thereby directly affecting the investor’s rights and obligations during the suspension period.

2. Why is the Investment Registration Certificate suspended?

The suspension of the Investment Registration Certificate may occur for various reasons, including:

Violation of legal regulations: The investor fails to comply with the Law on Investment, or violates regulations on taxation, environment, labor, or other specialized laws.
Failure to implement the project on schedule: If an investment project is not implemented in accordance with the committed timeline without a legitimate reason, the licensing authority may suspend or revoke the Investment Registration Certificate.
Failure to fulfill financial obligations: The investor fails to pay taxes, fees, charges, or other financial obligations as prescribed.
Impact on national security: The project adversely affects national defense, security, public order, or contravenes the State’s investment policies.
At the investor’s request: The investor may request the suspension or termination of the project for business, financial, or strategic reasons.

Depending on the underlying cause, the suspension may be temporary or may ultimately result in the revocation of the Investment Registration Certificate.

II. Legal provisions on the suspension of Investment Registration Certificates

1. In which cases is the Investment Registration Certificate suspended?

Pursuant to Clause 1, Article 64 of the Law on Investment 2020, an Investment Registration Certificate shall be suspended in the following cases:

The investor decides to terminate the operation of the investment project;
The operation term of the investment project expires in accordance with the laws of the host country;
Termination conditions stipulated in contracts or the company charter are met;
The investor transfers the entire overseas investment capital to a foreign investor;
More than 24 months have elapsed from the date of issuance of the overseas Investment Registration Certificate and the investor fails to implement or is unable to implement the investment project in accordance with the registered schedule with the competent state authority, and fails to implement procedures for adjustment of the project implementation schedule;
The overseas economic organization is dissolved or declared bankrupt in accordance with the laws of the host country;
Pursuant to a court judgment or decision, or an arbitral award.

2. Competent authorities to suspend Investment Registration Certificates

Pursuant to Article 39 of the Law on Investment 2020 and Article 34 of Decree No. 31/2021/ND-CP, the authorities competent to suspend an Investment Registration Certificate include:

Management Boards of industrial zones, export processing zones, hi-tech parks, and economic zones;
Departments of Planning and Investment;
Investment registration authorities at the location where the investor implements the investment project, or where the executive office for project implementation is located or expected to be located.

3. Procedures for suspension of an Investment Registration Certificate

Pursuant to Article 87 of Decree No. 31/2021/ND-CP, the procedures for suspending an Investment Registration Certificate are as follows:

The investor submits a dossier requesting the termination of the validity of the Investment Registration Certificate;
The Ministry of Planning and Investment examines the validity of the dossier. In case the dossier is invalid or requires clarification, the Ministry shall notify the investor in writing to complete the dossier;
The Ministry of Planning and Investment seeks opinions from the State Bank of Vietnam regarding the investor’s foreign exchange transactions, compliance with foreign exchange regulations, and any violations and handling thereof (if any);
Within 15 days from the date of receipt of a valid dossier, the Ministry of Planning and Investment issues a decision on termination of validity and revocation of the Investment Registration Certificate and sends it to the investor, while concurrently forwarding copies to the State Bank of Vietnam, the Ministry of Finance, the Ministry of Foreign Affairs, the Ministry of Labor – Invalids and Social Affairs, the relevant line ministry, the People’s Committee of the province or centrally governed city where the investor’s headquarters or permanent residence is located, the tax authority confirming fulfillment of tax obligations by the investor, and the investor’s ownership representative agency (if any);
In the case of termination of an overseas investment project according to Point d, Clause 1, Article 64 of the Law on Investment 2020, prior to transferring the entire overseas investment capital to a foreign investor and terminating the project, the investor must notify the State Bank of Vietnam;
In the case of termination of an overseas investment project pursuant to Point đ, Clause 1, Article 64 of the Law on Investment 2020 where the investor fails to implement procedures for termination of validity of the Investment Registration Certificate, the Ministry of Planning and Investment shall, based on the Law on Investment and Decree No. 31/2021/ND-CP, terminate the validity of the Investment Registration Certificate and notify the investor and relevant state authorities. After the Investment Registration Certificate is terminated, if the investor wishes to continue implementing the overseas investment project, a new application for issuance of an overseas Investment Registration Certificate must be submitted in accordance with the Law on Investment and Decree No. 31/2021/ND-CP;
For projects subject to approval of overseas investment policy, the investor and the authority deciding on the overseas investment shall implement project termination procedures and report to the competent authority approving the overseas investment policy.

III. Questions regarding the suspension of investment registration certificates

1. What is the duration of suspension of the Investment Registration Certificate?

Vietnamese law does not specifically stipulate a fixed duration for the suspension of the Investment Registration Certificate. The suspension period depends on the severity of the violation and the investor’s ability to remedy it, as considered and decided by the competent state authority on a case-by-case basis.

The termination of validity of an Investment Registration Certificate is often associated with the operational term of the investment project. Based on Article 44 of the Law on Investment 2020, the operational term of the investment project is stipulated as follows:

Not exceeding 70 years for projects implemented in economic zones;
Not exceeding 50 years for projects implemented outside economic zones;
Not exceeding 70 years for projects implemented in areas with difficult or particularly difficult socio-economic conditions, or projects with large investment capital and slow capital recovery.

If the investor wishes to extend the project’s operational term, procedures for adjustment of the Investment Registration Certificate must be completed prior to expiration, in compliance with applicable legal regulations.

2. After how long may an investor apply for re-issuance following suspension?

The suspension or revocation of the Investment Registration Certificate generally arises from specific violations or reasons related to the investment project. Vietnamese law does not provide for re-issuance of the Investment Registration Certificate for a project that has been suspended or revoked. Instead, if the investor wishes to continue the project, procedures for applying for a new Investment Registration Certificate must be completed in accordance with current regulations.

3. May an investor file a complaint or initiate a lawsuit against a suspension decision?

Under Vietnamese law, upon receipt of a suspension decision and if the investor considers such decision unreasonable or unlawful, the investor has the following options:

Complaint: Pursuant to Articles 7 and 9 of the Law on Complaints 2011, the investor may file a first-time complaint with the authority issuing the decision within 90 days. If dissatisfied with the outcome, a second-time complaint may be filed with the immediate superior authority.
Lawsuit: According to the Law on Administrative Procedures, the investor may initiate an administrative lawsuit against the suspension decision before a competent court without being required to file a complaint in advance.

Accordingly, investors have the right to file complaints under the Law on Complaints 2011 or initiate lawsuits under the Law on Administrative Procedures if they disagree with a decision on suspension of an Investment Registration Certificate.

4. What is the difference between suspension and revocation of an Investment Registration Certificate?

The differences between suspension and revocation of an Investment Registration Certificate are as follows:

Suspension: The temporary cessation of the validity of the Investment Registration Certificate for a certain period, usually due to violations or at the request of a competent authority. After remedial measures are taken, the investor may continue implementing the project.
Revocation: The complete termination of the validity of the Investment Registration Certificate, whereby the project cannot continue operations. Revocation is typically applied in cases of serious violations or prolonged failure to implement the project.

5. What is the maximum duration of suspension under current law?

Under current Vietnamese law, there is no specific provision on the maximum duration of suspension of an Investment Registration Certificate. The suspension period depends on the severity of the violation and the investor’s ability to remedy it, as considered and decided by the competent state authority in each specific case.

IV. Legal consulting services related to the suspension of investment registration certificates

NP Law’s legal consulting services on the suspension of Investment Registration Certificates assist investors in understanding relevant regulations, lodging complaints or initiating lawsuits, and proposing remedial solutions to protect lawful rights and maintain compliant business operations.