I. Overview of basic construction investment capital
Basic construction investment capital refers to the total costs expressed in monetary terms, used for new construction, expansion, reconstruction, or restoration of fixed assets within a certain period.
Such costs include surveying, planning, design, construction, procurement and installation of equipment, together with other expenses recorded in the total estimated investment.
II. Regulations on basic construction investment capital
1. What is basic construction investment capital?
Basic construction investment capital is a source of funds used for construction investment activities aimed at creating fixed assets to serve socio-economic development. According to Clause 1, Article 3 of Circular No. 11/2021/TT-BXD, the preliminary total construction investment is determined based on the scale, capacity, and comparable projects, ensuring consistency with the construction location and timing.
It reflects the total costs incurred for new construction, expansion, reconstruction, or restoration of fixed assets during a specific period.
In addition, based on Circular No. 200/2014/TT-BTC, Basic Construction Investment Capital Source is used to reflect the existing balance and fluctuations (increases and decreases) of basic construction investment capital within an enterprise.
Pursuant to Article 4 of Decree No. 10/2021/ND-CP, the preliminary total construction investment includes costs such as compensation, support, and resettlement; construction costs; equipment costs; project management costs; construction investment consultancy costs; other costs; and contingency costs.
2. Sources and uses of basic construction investment capital
Basic construction investment capital may be formed from the state budget, loans, owners’ equity, or other lawful sources, in accordance with the Law on Public Investment 2020 and its implementing regulations. The management and final settlement of construction investment capital are implemented in accordance with Circular No. 96/2021/TT-BTC, ensuring transparency and efficiency in the use of funds.
Basic construction investment costs comprise multiple detailed categories, ranging from compensation, support, and resettlement costs (Point a, Clause 2, Article 5 of Decree No. 10/2021/ND-CP); construction costs (Point b); equipment costs (Point c); project management costs (Point d); consultancy costs (Point đ); to other costs and contingency costs (Points e and g). Each category is specifically regulated to ensure that construction investment projects are implemented in compliance with applicable laws.
The management of construction investment capital requires strict compliance with the provisions of Decree No. 99/2021/ND-CP on public investment management, under which the roles and responsibilities of regulatory authorities, investors, and related parties are clearly defined. Final settlement of investment capital is conducted in accordance with the procedures stipulated in Circular No. 10/2020/TT-BTC, including the preparation, appraisal, and approval of settlement dossiers, thereby ensuring accuracy and transparency.
III. Common questions regarding basic construction investment capital
1. How is basic construction investment capital settled?
Pursuant to Article 35 of Decree No. 10/2021/ND-CP, construction investment capital subject to final settlement comprises all lawful costs incurred during the construction investment process to operate a project. Lawful costs include expenditures within the scope of the approved project, design, cost estimates, and executed construction contracts. The settlement of investment capital ensures transparency and legality in project financial management, facilitating inspection and supervision by competent authorities.
2. How must investors implement final settlement of basic construction investment capital?
Clause 5, Article 35 of Decree No. 10/2021/ND-CP provides that investors must implement the final settlement within the approved total investment amount, prepare settlement dossiers, and submit them for approval no later than nine (09) months from the date the project is accepted upon completion.
Such a provision imposes a specific statutory deadline, creating an obligation for investors to comply with the schedule and prevent misuse of funds.
3. Who is responsible for managing basic construction investment capital?
Pursuant to the Law on Public Investment 2019, the investment decision-maker, the investor, and state financial authorities are all responsible for managing basic construction investment capital. Clear allocation of responsibilities helps limit losses and enhances accountability in capital management.
4. What is the accounting method when an enterprise receives basic construction investment capital allocated from the state budget according to an approved estimate?
Pursuant to Circular No. 200/2014/TT-BTC, upon receipt of funds, the enterprise records a debit to Accounts 111 or 112 and a credit to Account 441. Such an accounting method enables enterprises to accurately reflect funding sources and ensure accountability when using State budget funds.
IV. Legal consultancy services related to basic construction investment capital
To ensure that transactions involving basic construction investment capital are conducted in compliance with the law and to prevent potential legal risks, seeking support from professional legal consultancy services is essential. NPLaw provides comprehensive legal advisory services, ranging from contract drafting and clarification of legal regulations to procedural assistance throughout the implementation process. Such comprehensive support helps clients save time and ensures the successful execution of transactions.
