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New regulations on renewal of the investment registration certificate in 2023

So, what is the current sta When investment projects expire, investors need to implement the necessary procedures for renewing (extending) the project's operation period (which is often referred to as renewal of the Investment Registration Certificate for projects that have been granted the Investment Registration Certificate). tus of investment registration certificate renewal? What are the current legal regulations on investment registration certificate renewal? What are the unresolved issues related to investment registration certificate renewal? To clearly understand these concerns, Ngoc Phu Law Company, Ltd. would like to provide information to readers in the following article:

When investment projects expire, investors need to implement the necessary procedures for renewing (extending) the project's operation period (which is often referred to as renewal of the Investment Registration Certificate for projects that have been granted the Investment Registration Certificate).

tus of investment registration certificate renewal? What are the current legal regulations on investment registration certificate renewal? What are the unresolved issues related to investment registration certificate renewal?

To clearly understand these concerns, Ngoc Phu Law Company, Ltd. would like to provide information to readers in the following article:

I. Current Status of Investment Registration Certificate Renewal in Vietnam

During project implementation, if the project implementation period specified in the Investment Registration Certificate has expired, investors are required to implement the procedures to extend the project's operational period on the Investment Registration Certificate (commonly known as investment certificate renewal). However, according to the current situation, there are many investment projects that have expired their project implementation period but do not implement the investment certificate renewal procedures due to various reasons, such as:

- Investors have not yet set up a department to monitor and follow the expiration of project licenses, so they are not aware of the project's operational period to implement the investment registration certificate renewal procedures in a timely manner.

- Investors are aware of the expiration of the project's operational period, but they don’t clearly understand the investment registration certificate renewal procedures to implement it in a timely manner in accordance with current regulations.

II. Understanding the Investment Registration Certificate Renewal

In the process of project implementation, it is necessary to understand the following about the renewal of the investment registration certificate:

1. Duration of the Investment Registration Certificate

The duration of the Investment Registration Certificate is the duration of the project's operation as stipulated in Article 44 of the Law on Investment 2020, as follows:

- The operational duration of an investment project in an economic zone is not more than 70 years.

- The operational period of an investment project outside an economic zone is not more than 50 years. Specifically, investment projects performed in areas with difficult socio-economic conditions or areas with particularly difficult socio-economic conditions, or large-scale investment projects with slow capital recovery may have a longer operational period but not more than 70 years.

Besides, for investment projects that are allocated or leased land by the State but the investors are slow to be handed over the land, the time the State is slow to hand over the land is not counted in the operational period and progress of the investment projects.

2. When is the Investment Registration Certificate Renewal required?

When the project's operational period (or the investment registration certificate's expiration date) expires, investors need to implement the procedures for renewing the Investment Registration Certificate. (According to Clause 4, Article 44 of the Law on Investment 2020).

III. Legal Regulations on the Investment Registration Certificate Renewal

The applicable regulations of Law governing the Investment Registration Certificate renewal are outlined as follows:

1. Conditions for renewing the Investment Registration Certificate

To be eligible for investment registration certificate renewal, an investment project must meet the following conditions, as follows:

- Compliance with national, regional, provincial, urban, and special economic-administrative unit planning (if applicable); urban development goals, orientations, and housing development programs (particularly for housing and urban area development projects).

- Compliance with the land allocation and lease requirements stipulated in laws on land (for cases requesting renewal of land use).

- Besides, the project doesn’t fall under any of the cases specified in Points a and b of Clause 4, Article 44 of the Law on Investment, which include:

+ Investment projects utilizing outdated technologies that pose environmental pollution risks or natural resource consumption, including:

- Projects using technology lines that do not meet national technical Standards for safety, energy efficiency or environmental protection; or production capacity (based on the number of products generated by the technology line within a unit of time) or efficiency of the technology line falls below 85% of the designed capacity or efficiency; or the consumption of raw materials, materials, and energy exceeds 15% compared to the design. If there are no national technical standards for safety, energy efficiency, or environmental protection related to the project's technology line, then such projects must apply Vietnamese national technical standards or the national standards of one of the G7 countries or South Korea regarding safety, energy efficiency, and environmental protection.

- Projects using machinery and equipment for manufacturing with HS codes under Chapters 84 and 85 of the Vietnam Export-Import Goods Catalogue that are over 10 years old or do not comply with national technical standards for safety, energy efficiency, or environmental protection. If there are no national technical standards for safety, energy efficiency, or environmental protection related to the project's machinery and equipment, they must apply Vietnamese national technical standards or the national standards of one of the G7 countries or South Korea regarding safety, energy efficiency, and environmental protection.

+ Investment projects where the investors are obligated to transfer assets to the Vietnamese State or a Vietnamese entity without reimbursement (compensation).

(Based on Clause 4, Article 44 of the Law on Investment 2020; Clause 4 and 10, Article 27 of Decree No. 31/2021/ND-CP)

2. Dossier composition of renewing the Investment Registration Certificate duration

The dossier for renewing the Investment Registration Certificate includes the following:

- Writing request for renewing the investment project's operational period;

- Decision on approving the investment policy (for projects that have been approved for the investment policies);

- Investment registration certificate;

- Decision on approving the investor or equivalent legal documents;

- Certificate of land use rights or equivalent legal documents;

- Documents proving the investor's financial capacity, including one of the following documents: financial statements of the investor for the last 2 years; financial support commitment from the holding company; financial support commitment from the financial institution; financial capacity guarantee for the investor; other documents proving the investor's financial capacity.

(According to Points a and e, Clause 2, Article 55 of Decree No. 31/2021/NĐ-CP)

IV. Questions about the Investment Registration Certificate Renewal

Questions relating to renewing the Investment Registration Certificate, as follows:

1. Which agencies do investors implement the procedures for renewing the investment registration certificates?

The investment registration certificate renewal is implemented at the following agencies:

- For projects that have been approved for investment policies: Investors implement the renewal procedures at the Ministry of Planning and Investment or the Investment Registration Agency having the corresponding authority with approval authority for the project’s investment policy (National Assembly, Prime Minister or Provincial People's Committee). (According to Articles 30, 31 and 32 of the Law on Investment 2020; Point a, Clause 2, Article 55 of Decree No. 31/2021/NĐ-CP)

- For investment projects that have been granted the Investment Registration Certificate and are not subject to investment policy approval: Investors implement the approval procedures at the Investment Registration Agency, specifically the Management Board of industrial parks, export processing zones, high-tech zones, economic zones (for investment projects inside these above areas), or the Department of Planning and Investment where the investors implement the investment projects, or locate or plan to locate the office (for investment projects outside export processing zones, high-tech zones, economic zones or inside industrial parks, export processing zones, high-tech zones, economic zones without establishing the Management Board). (According to Article 39 of the Law on Investment 2020; and Point e, Clause 2, Article 55 of Decree No. 31/2021/NĐ-CP)

2. What is the duration of the investment registration certificate renewal?

The renewal period of the investment registration certificate is considered based on the targets, scale, location and operational requirements of each project and does not exceed the maximum period specified in Clauses 1 and 2, Article 44 of the Law on Investment 2020, as follows:

- The operation duration of investment projects inside economic zones is not more than 70 years.

- The operation duration of investment projects outside economic zones is not more than 50 years. Investment projects performed in areas with difficult socio-economic conditions or areas with particularly difficult socio-economic conditions, or large-scale investment projects with slow capital recovery may have a longer project duration but not exceed 70 years.

3. Cases where the investment registration certificate cannot be renewed

Cases where the investment registration certificate cannot be renewed include projects that do not meet the conditions for renewal when falling into one of the following cases:

- The projects do not comply with the national, regional, provincial, urban and special administrative-economic unit planning (if any); don’t comply with the targets and orientations of urban development or planning and programs of housing development (in cases of construction investment projects for housing or urban area);

- The projects do not meet the conditions for handing over and leasing land in accordance with the provisions of the Law on Land (in cases of requesting renewal of land use).

- Investment projects utilizing outdated technologies that pose environmental pollution risks or natural resource consumption, including:

- Investment projects where the investors are obligated to transfer assets to the Vietnamese State or a Vietnamese entity without reimbursement (compensation).

(Based on Clause 4, Article 44 of the Law on Investment 2020; Clause 4 and 10, Article 27 of Decree No. 31/2021/ND-CP)

4. Will there be a penalty if the Investment Registration Certificate expires but is not renewed?

If the Investment Registration Certificate expires but is not renewed, there will be a fine of 30,000,000 VND to 50,000,000 VND for the act of not notifying or not submitting the decision on terminating the investment project (due to the expiration of the investment project's operation period according to Point c, Clause 1, Article 48 of the Law on Investment 2020) to the Investment Registration Agency within 15 days from the date of terminating the investment project, and simultaneously must apply remedial measures for submitting the notification or decision on terminating the investment project to the Investment Registration Agency. (According to Point dd, Clause 2 and Point d, Clause 3 of Article 15 Decree No. 122/2021/NĐ-CP)

V. Services for consulting and implementing the procedures related to the Investment Registration Certificate renewal

NGOC PHU LAW COMPANY LIMITED is a company with professional experience in consulting and implementing procedures related to the renewal of the Investment Registration Certificate with the following procedures and work:

- Receiving information that needs to be consulted and supported to implement the procedures for the Investment Registration Certificate renewal from Clients;

- Consulting and guiding Clients in preparing documents to complete the procedures for the renewal of the Investment Registration Certificate;

- Drafting dossiers and representing clients to work with competent State agencies;

- Receiving results of the Investment Registration Certificate renewal and handing them over to Clients.

The above is the information answering the questions about the renewal of the Investment Registration Certificate that NPLAW sends to readers. If readers have any further questions that need to be answered, please contact NPLAW with the following contact information: