Necessary issues for investors when applying for an investment registration certificate (irc)

I. Overview of the Investment Registration Certificate

The Investment Registration Certificate (IRC) is a legal document issued by a competent state authority to an investor, recording information about an investment project. It serves as a legal foundation for the investor to implement the project and ensures their rights and obligations related to investment activities in Vietnam.

The Investment Registration Certificate is generally required for foreign investors or foreign-invested economic organizations when conducting investment projects. However, not all investment projects require Investment Registration Certificates.

II. Legal provisions on the Investment Registration Certificate

1. What is an Investment Registration Certificate?

According to Clause 11, Article 3 of the Law on Investment 2020, the Investment Registration Certificate (IRC) is a paper or electronic document recording the investor's registration details for the investment project.

Thus, the IRC is not a condition to be granted investment permission but serves as a registration form for project content for the purpose of state management.

2. In what cases is the Investment Registration Certificate required?

Pursuant to Article 37 of the Law on Investment 2020, the Investment Registration Certificate is required in the following cases:

- Foreign investors implementing investment projects;

- Foreign-invested economic organizations that must meet market access conditions such as: restricted business sectors, ownership ratios, investment forms, etc.

Cases where the Investment Registration Certificate is not required:

- Domestic investors;

- Foreign-invested economic organizations not subject to mandatory conditions under Article 23 of the Investment Law.

3. Conditions for granting the Investment Registration Certificate

According to Article 38 of the Law on Investment 2020, to be granted the Investment Registration Certificate, an investment project must meet several essential conditions to ensure legality, feasibility, and alignment with national socio-economic development orientations. Accordingly, such a project: 

- Not subject to prohibited sectors: The project must not fall within the list of prohibited business activities such as narcotics, prostitution, human trafficking, resource destruction due to ensuring social order and national security.

- Clearly determine project location: Investors must prove lawful land use rights or a commitment from the State or landowners regarding land allocation or lease. The project's location must align with the approved national, regional, or provincial development plans to ensure consistency in planning and avoid conflicts in land and resource use.

- Demand market access conditions for foreign investors or foreign-invested organizations: Projects by foreign investors or foreign-invested entities must comply with specific conditions (e.g. restricted ownership percentages, joint venture requirements).

- Financial capacity: Investors must demonstrate financial capability via financial statements, capital commitment documents, bank statements, or equivalent.

- Fulfillment of financial obligations: Investors must commit to fulfilling obligations such as taxes, fees, environmental duties, and insurance.

These conditions aim to ensure that only feasible, transparent, and law-compliant projects are issued Investment Registration Certificates in Vietnam.

4. Competent authorities issuing the Investment Registration Certificate

According to Article 39 of the Law on Investment 2020, two authorities are responsible for issuing the Investment Registration Certificate:

- Management Boards of industrial parks, export processing zones, high-tech zones, and economic zones for projects located within such zones;

- Department of Planning and Investment for projects outside of these special zones.

III. Questions on the Investment Registration Certificate

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

Under Article 44 of the Law on Investment 2020, the maximum project duration is 50 years, extendable to 70 years in specific cases:

- Projects located in areas with difficult or especially difficult socio-economic conditions;

- Projects with large capital investments that require extended capital recovery periods.

The Investment Registration Certificate will clearly state the duration corresponding to the project's approved operational duration.

2. What are procedures for obtaining the Investment Registration Certificate?

According to Articles 33 and 38 of the Law on Investment 2020, the process includes two main steps:

- Registration for investment policy approval (if required under Articles 30–32);

- Submission of issuance application for the Investment Registration Certificate, which includes:

- Application form;

- Legal documents of the investor (copies);

- Project proposal;

- Documents proving financial capability;

- Land use demand documents, etc.

Processing time: Within 15 working days from receipt of a valid application.

3. What are the fines for violating regulations on the Investment Registration Certificate?

Violations are handled in accordance with Decree No. 122/2021/NĐ-CP. Common violations and fines include:

- Failure to comply with content stated in the Investment Registration Certificate: up to 60,000,000 VND;

- Failure to report or make inaccurate report in investment projects: from 5,000,000 VND to 20,000,000 VND;

- Failure to amend the Investment Registration Certificate when required: from 10,000,000 VND to 30,000,000 VND.

In serious cases, the competent authority may suspend or terminate the investment project.

4. Can the Investment Registration Certificate be revoked? If so, under what circumstances?

The Investment Registration Certificate may be revoked under Article 48 of the Law on Investment 2020, in cases such as:

- The investment project falls under conditions in Clauses 2 and 3, Article 47, and the investor is unable to remedy the situation;

- The investor loses the right to use the investment site and does not adjust the investment location within 6 months;

- The project has ceased operations for 12 months, and the authority is unable to contact the investor or legal representative;

- The investor is withdrawn land due to delayed or non-use of the land under land regulations;

- The investor fails to fulfill capital deposit or guarantee obligations required by law;

- The investment activity is based on a sham civil transaction;

- As ruled by a court judgment or arbitral award.

5. Can investors amend the content of the Investment Registration Certificate? If so, what is the procedure?

Under Article 41 of the Law on Investment 2020, investors may request to amend the Investment Registration Certificate in cases of:

- Changes to investor information;

- Adjustments to scale, objectives, or capital;

- Changes to project location or duration.

Procedure:

- The investor submits an application for amendment;

- The competent authority shall review and respond within 10 working days.
 

IV. Legal advisory services for applying for Investment Registration Certificates

To ensure the investment registration process complies with legal requirements and avoids risks, seeking support from professional legal services is essential. NPLaw provides comprehensive legal consultation from contract drafting and legal clarification to assistance during the entire application process. Our full-service support will save you time and ensure the success of your investment transaction.