Vietnam is a country significantly attracting foreign investors to implement investment projects, including Chinese investors. To be issued operation licenses in Vietnam, both foreign investors and Chinese ones need to fulfill procedures for applying for an Investment Registration Certificate (IRC).
Thus, What is an Investment Registration Certificate? What are legal regulations on Investment Registration Certificates for Chinese investors? and What are relevant questions on such a Certificate?
I/ What is an Investment Registration Certificate for Chinese investors?
An Investment Registration Certificate (IRC) for Chinese investors is a document that the competent authority issues to investors with Chinese nationality to record basic information on investment projects including objectives, scales, investment capital, locations and time of implementation.
Application for issuing the Investment Registration Certificate is one of the most important procedures when Chinese investors implement business operations in Vietnam.
II/ Legal regulations on the Investment Registration Certificate for Chinese investors
1. Cases are requested to obtain the Investment Registration Certificate for Chinese investors
Pursuant to Article 37 of the Law on Investment 2020 on issuing the Investment Registration Certificate to Chinese investors, the following cases are obliged to implement the application procedures for the Investment Registration Certificate:
- Projects with 100% capital from Chinese investors;
- Investment projects by economic organizations as defined in Clause 1, Article 23 of the Law on Investment 2020, including:
a) Chinese investors hold more than 50% of charter capital, or the majority of general partners are Chinese individuals (for partnerships);
b) Economic organizations mentioned in point (a) holding more than 50% of the charter capital;
c) Economic organizations jointly owned by Chinese investors and the entities mentioned in point (a), holding more than 50% of charter capital.
2. Conditions are necessary for Chinese investors to demand to receive the Investment Registration Certificate
For projects subject to investment policy approval, the Investment Registration Certificate shall be issued within 5 working days from the date the investment policy and investor are approved.
For projects not subject to investment policy approval, Chinese investors will be granted the Investment Registration Certificate if the following conditions are met:
- The project is not in prohibited business sectors;
- The investment location is clearly identified through a valid land use right certificate or lease agreement, or other documents confirming the right to use such location to implement the investment project;
- The project aligns with national, regional, provincial, urban, or special administrative-economic unit planning;
- The project meets the conditions on investment rate per land area prescribed by the Provincial People's Committee based on the actual conditions of the locality and approved by the Standing Committee of the Provincial People's Council (if any), and the number of employees (if any);
- The project complies with foreign market access conditions.
(Legal basis: Clause 2, Article 38 of the Law on Investment 2020; and Clause 3, Article 36 of Decree 31/2021/ND-CP)
3. Procedures for applying for the Investment Registration Certificate for Chinese investors
3.1. For projects requiring the investment policy approval
- Investment projects are approved for the investment policy and investors, as well as are subjects to applying for issuing the Investment Registration Certificate: The investment registration authority shall issue the Investment Registration Certificate to investors within 05 working days from the date of receiving the Decision on approving the investment policy.
- Investment projects have been approved for the investment policy, and investors receive biddings; or investment projects are subject to approving investors and issuing the Investment Registration Certificate: investors shall submit proposals (request documents) for issuing the Certificate to the investment registration authority.
- Investment projects in which the Economic Zone Management Board approves investors: the Economic Zone Management Board shall decide to approve investors and issue the Investment Registration Certificate.
- Investment projects are not subject to issue the Investment Registration Certificate: If there is a need to issue the Certificate, investors shall submit a written request, a valid copy of the Decision approving the investment policy and a valid copy of the Decision approving the investor (if any) to the investment registration agency.
(Legal basis: Article 35, Decree 31/2021/ND-CP)
3.2. For projects not requiring the investment policy approval
Investors shall submit one (01) application dossier to the investment registration authority, including:
- A written request to implement their investment projects, with a commitment to bear all costs if the projects are not approved;
- Legal documents proving investor status;
- Financial capacity documents: audited financial statements of the last 2 years, financial support commitments of parent company or financial institutions, financial guarantees, and other documents proving investor’s financial capacity;
- The investment project proposal includes the following main contents: investor or form of investor selection, investment objectives, investment scale, investment capital and capital mobilization plan, location, duration, implementation progress, information on current land use status at the project implementation location and proposed land use demand (if any), labor demand, proposed investment incentives, impact, socio-economic efficiency of the project, preliminary assessment of environmental impact (if any) according to the provisions of the law on environmental protection. However, in case the law on construction stipulates the preparation of a pre-feasibility study report, the investor may submit a pre-feasibility study report instead of the investment project proposal;
- In case the investment project does not request the State to allocate land, lease land, or permit the change of land use purpose, investors submit a copy of the land use right certificate or other documents determining the right to use the location to implement the investment project;
- Explanation of the technology used in the investment project for projects subject to appraisal and consultation on technology according to the provisions of law on technology transfer;
- BBC contracts are requested to obtain (for projects under the form of BBC contracts);
- Other documents relevant to the investment projects, requests for conditions and investor’s professional under the Law (if any).
(Legal basis: Clause 1, Article 36 of Decree 31/2021/ND-CP; Clause 1, Article 33 of the Law on Investment 2020)
III. Questions on the Investment Registration Certificate for Chinese investors
1. The validity period of the Investment Registration Certificate for Chinese investors
Although the law does not set a fixed validity period for the Investment Registration Certificate, it generally aligns with the project’s operation period:
- Up to 70 years for projects in economic zones;
- Up to 50 years outside economic zones;
- In areas with difficult socio-economic conditions or for large projects but slowly recovering capital, the duration can be extended but not exceed 70 years.
(Legal basis: Article 44 of the Law on Investment 2020; Article 27 of Decree 31/2021/ND-CP)
2. Competent authority to grant investment certificates to Chinese investors
The Management Board of industrial parks, export processing zones, high-tech zones, economic zones shall issue the Investment Registration Certificate for investment projects in industrial parks, export processing zones, high-tech zones, economic zones, except for the case specified in Law.
The Department of Planning and Investment shall issue the Investment Registration Certificate for investment projects outside industrial parks, export processing zones, high-tech zones, economic zones, except for the case specified in Law.
The investment registration agency where the investor implements the investment project, locates or plans to locate the executive office to implement the investment project shall issue the Investment Registration Certificate for the following investment projects:
- Investment projects implemented in 02 or more provincial-level administrative units;
- Investment projects implemented inside and outside industrial parks, export processing zones, high-tech zones, and economic zones;
- Investment projects in industrial parks, export processing zones, high-tech zones, economic zones where the Management Board of industrial parks, export processing zones, high-tech zones, economic zones have not been established or are not under the management of the Management Board of industrial parks, export processing zones, high-tech zones, economic zones. (Article 39 of the Investment Law 2020)
(Legal basis: Article 39 of the Law on Investment 2020)
3. Can Chinese investors transfer remaining capital abroad if not granted the Investment Registration Certificate?
Pursuant to Clause 3, Article 8 of Circular 06/2019/TT-NHNN regulating the transfer of money for investment preparation activities as follows, in case the competent authority does not grant the Investment Registration Certificate, Chinese investors are allowed to transfer abroad the remaining amount in foreign currency or buy foreign currency to transfer abroad for the amount transferred to Vietnam and the interest (if any) after deducting legal expenses related to investment preparation activities in Vietnam.
4. Legal services relevant to the Investment Registration Certificate for Chinese investors
The above is detailed legal information provided by NPLaw to support clients regarding Investment Registration Certificates for Chinese investors. Should you have any questions or need further assistance, please contact NPLaw via the following information:
