An investment project is a set of proposals for expenditure of mid-term or long-term capital to conduct business investment activities in a geographical area within a specified period of time. Are there any projects that cannot be extended? How can a procedure for extension of investment projects done? NPLaw will clarify this issue in the article below.
I. Cases where the investment project is not allowed to be renewed
Pursuant to Clause 4 Article 44 of the Law on Investment 2020, the following investment projects are not allowed to extend the operation duration:
- Investment projects using outdated technology, having a potential risk of environmental pollution and being resource-intensive;
- An investment project is subject to the case that the investor must transfer assets without reimbursement to the state of Vietnam or the Vietnamese Party.
Investment projects using outdated technology, having potential risk of environmental pollution, and being resource-intensive shall not entitled to extend the operation duration. This is defined under Clause 10, Article 27 of Decree 31/2021 / ND-CP detailing and guiding the implementation of some articles of the investment law, including:
- The project uses technology lines when the operation does not meet the regulations of the national technical regulation on safety, energy saving, environmental protection; or capacity (according to the number of products generated by technology lines in one unit of time) or performance of remaining technology lines achieves below 85% of design capacity or performance, or consumption of raw materials and energy exceeds 15% of the design.
In the absence of National technical regulation related to the technological line of the project on safety, energy saving, and environmental protection, it shall apply the technical indicators of the national standard of Vietnam or the national standard of one of the G7 countries, Korea in safety, energy saving, environmental protection;
- The project uses machinery and equipment for production, whose age exceeds 10 years, with goods code (HS code) in chapters 84 and 85 of the list of exports and imports in Vietnam or when its operation does not meet the regulations of the National Technical Regulations on safety, energy saving, environmental protection. In the absence of National technical regulation related to the technological line of the project on safety, energy saving, and environmental protection, it shall apply the technical indicators of the national standard of Vietnam or the national standard of one of the G7 countries, Korea in safety, energy saving, environmental protection;
The Ministry of Science and Technology guides how to identify machinery and equipment in some areas that have existed for more than 10 years but do not subject to outdated technology, posing potential risk to environmental pollution and being resource-intensive.
You are reading information about extending investment projects that is currently of interest.
II. Conditions for extension of investment projects
According to the provisions of Clause 4, Article 27 of Decree 31/2021 / ND-CP, except cases ineligible for extension, the investors need to continue to carry out the investment project at the end of the term of operation approved by the competent agency for investment policy, the investment registry considers and decides to extend the operation duration of that project if the following conditions are met:
- Be consistent with national-level planning, regional planning, provincial planning, urban planning and special administrative-economic unit planning (if any); be consistent with objectives, orientation of urban development, and housing development program (for housing and urban area construction investment project, );
- Meet the conditions of land allocation and land lease in accordance with the law on land (for the case of the proposal for extension of land use).
III. Procedure for extension of investment projects
1. Dossiers
According to the provisions of Clause 2, Article 55 of Decree 31/2021 / ND-CP, dossiers to extend the operation duration of the investment project include:
- A written request for the extension;
- Decision on approval for investment guidelines
- Certificate of investment registration;
- Decision on approval for investor or equivalent document;
- Certificate of land use rights or equivalent document;
- Document (s) proving the financial capacity of the investor including at least one of the following documents: the latest 02-year financial statements of investors; commitment of the parent company to provide financial support; commitment of a financial institution to provide financial support; guarantee for the investor’s financial capacity; other documents proving the investor’s financial capacity.
2. Procedure
According to the provisions of Clause 9, Article 27 and Clause 2, Article 55 of Decree 31/2021 / ND-CP, the procedure for extension of the project's duration is carried out in the following order:
Step 1: Preparing dossiers for extension;
Step 2: Submitting the dossiers;
- Within 03 working days from the date of receiving the valid dossier specified in point a, clause 2, Article 55 of Decree 31/2021 / ND-CP, the Ministry of Planning and Investment, investment registration agency shall send the dossiers to the land management agency and relevant agencies to collect their opinions about fulfillment of the requirements prescribed in Clause 4, Article 44 of the Law on Investment and Clause 4, Article 27 of Decree 31/2021 / ND-CP;
- Within 10 days from the date of receiving the valid dossier, the inquired agencies shall give their opinions about the fulfillment of the requirements prescribed in Clause 4 Article 44 of the law on investment and Clause 4 Article 27 of Decree 31/2021 / ND-CP;
- Within 15 days from the date of receiving the valid dossier, the Ministry of Planning and Investment and the investment registration agencies shall consider the conditions for the extension of the project's duration specified in Clause 4, Article 44 of the Investment Law and Clause 4, Article 27 of Decree 31/2021 / ND-CP to make an appraisal report submitting to the agency approving investment guidelines;
- Within 03 working days from the date of receiving the report from the Ministry of Planning and Investment, the investment registration agencies and the agencies approving the investment guidelines decide to extend the operation duration of the investment project;
- For investment projects that have been issued a certificate of investment registration and are not subject to approval of investment guidelines, investors submit 04 sets of dossiers as prescribed in point a clause 2 Article 55 of Decree 31/2021/ND-CP to the investment registration agency. The investment registration agency shall carry out procedures in accordance with the respective provisions at points b, c, d and d, Clause 2, Article 55 of Decree 31/2021/ND-CP to extend the operation duration of the investment project.
IV. The operation duration of the investment project
As stipulated in Article 44 of the Law on Investment 2020, the operation duration of the investment project is described as detailed as follows:
- The operation duration of the investment project in the economic zone does not exceed 70 years.
- The operation duration of the investment project outside the economic zone does not exceed 50 years. For investment projects implemented in regions with difficult or particularly difficult socio-economic conditions, or investment projects with large capital but slow capital recovery, their operation duration can be longer but not more than 70 years.
- For investment projects that are allocated and leased land by the state but are delayed in handing over land, this delay period is not counted towards the project's operating term and implementation progress.
At the same time, Clause 1 Article 27 of Decree 31/2021 / ND-CP stipulated:
- The operation duration of the investment project as prescribed in Clauses 1 and 2 of Article 44 of the investment law is calculated from the date the investor is granted the decision on investor approval, that on the investment guidelines simultaneously with the investor approval or the certificate of investment registration for the first time. For investment projects that are allocated, leased land and changed the land use purpose by the state, the operating term of the project is calculated from the date the investor receives the land allocation and lease decision, or land use change decision. If the investor has the land allocation and lease decision, or land use change decision with a delay in handing over land, the operating term is calculated from the actual date of land handover.
V. Consultancy services for investment project extension
Here is the basic information about the extension of the investment project. If there is any difficulty learning about this information, please contact us. NPLaw always provides customers with the best legal services. NPLaw advises not only investment, civil, criminal but also many other areas. At the same time, NPLaw also supports customers in preparing dossiers and implementing procedures related to the extension of investment projects. NPLaw endeavors to become a companion to customer success. The trust that customers put in us today will be the cornerstone to help NPLaw grow more in the future.
