In the context of an increasingly developing and integrating market economy, the right to transfer investment projects has become one of the key factors, not only helping investors optimize financial resources but also facilitating the expansion and redirection of business strategies. However, transferring an investment project is not a simple process; it involves numerous complex legal issues.
This article by NPLAW will delve into analyzing the current legal provisions regarding the right to transfer investment projects in Vietnam, from identifying the necessary conditions and procedures to important considerations to protect the interests of related parties.
I. Current situation of demand for transferring investment projects
In recent years, the demand for transferring investment projects in Vietnam has increased significantly. Many enterprises are seeking to transfer projects that no longer fit their development strategies in order to redirect investment to new sectors or optimize financial resources. At the same time, foreign investors are also actively looking for opportunities to acquire projects to expand their operations in Vietnam.
This stems mainly from factors such as:
- Changes in the real estate market, prompting many investors to transfer projects due to failure to meet original objectives or lack of resources to continue implementation;
- Changes in business strategies of enterprises, especially in the context of the COVID-19 pandemic and other economic impacts;
- Growth in new sectors such as technology, renewable energy, logistics, and other promising fields attracting investment.
II. Legal regulations on the right to transfer investment projects
1. What is the right to transfer an investment project?
According to Clause 4, Article 3 of the Law on Investment 2020, an investment project is a collection of medium- or long-term capital investment proposals to implement business investment activities in a specific geographical area within a specified period.
Transferring an investment project is when the investors of a project transfer part or all of their project to another investor through an investment project transfer contract.
Thus, it can be understood that the right to transfer an investment project is the right of an investor of a project to transfer part or all of their project to another investor through an investment project transfer contract.
2. Who has the right to transfer an investment project?
According to Article 46 of the Law on Investment 2020 on transferring investment projects:
- Investors have the right to transfer all or part of their investment projects to other investors when the conditions are met.
Thus, investors have the right to transfer investment projects. Investors are organizations or individuals implementing business investment activities, including domestic investors, foreign investors, and economic organizations with foreign investment capital.
3. What are the conditions for transferring an investment project?
Pursuant to Clause 1, Article 46 of the Law on Investment 2020, an investor has the right to transfer all or part of an investment project to another investor when meeting the following conditions:
- The investment project or its portion being transferred is not terminated under Clauses 1 and 2, Article 48 of the Law on Investment 2020;
- Foreign investors receiving the project must meet the conditions stipulated in Clause 2, Article 24 of the Law on Investment 2020;
- Compliance with land law if the transfer involves the transfer of land use rights and assets attached to land;
- Compliance with housing law and real estate business law if transferring housing construction projects or real estate projects;
- Compliance with the conditions stated in the investment policy approval documents, investment registration certificates, or other related laws (if any);
- In addition to complying with Article 46 of the Law on Investment 2020, State-owned enterprises must also comply with regulations on the management and use of State capital invested in production and business before adjusting the investment project.
III. Some questions on the right to transfer investment projects
1. Procedures for transferring an investment project
According to Article 48 of Decree No. 31/2021/ND-CP, procedures for transferring investment projects vary by case, specifically:
(1) For investment projects approved with investment policy concurrently with investor approval, where the entire project is transferred before operation or when there are changes in investor conditions, or if the transfer changes the contents of the investment policy approval:
- Submit 08 sets of dossiers to the Ministry of Planning and Investment or 04 sets of dossiers to the Investment Registration Authority corresponding to the authority approving the investment policy;
- The competent authority will review conditions for transferring the investment project.
(2) For projects approved with investment policy where the transfer does not change the contents of the investment policy approval, the transferring investor will follow procedures to adjust the investor approval decision:
- Submit 04 sets of dossiers to the Investment Registration Authority, replacing the investment adjustment request with a request to approve the adjustment of the investor;
- Within 03 working days from the date of receiving valid dossiers, the authority shall send them to related competent state agencies for their opinions;
- Within 15 days, these agencies provide opinions on contents under their state management scope, and return results to the Investment Registration Authority;
- Within 25 days, the Investment Registration Authority prepares an appraisal report and submits it to the provincial People’s Committee;
- Within 07 working days from the date of receiving valid dossiers and appraisal reports, the provincial People’s Committee decides to approve the adjustment of the investor.
(3) For projects approved with investment policy already operational, the investor does not need to implement procedures for approving adjustments to investment policy upon transfer.
(4) For projects that have been granted an Investment Registration Certificate (IRC) and do not fall under the approval of investment policy, or are approved but not under Clause 3, Article 41 of the Law on Investment, the procedures are:
- Submit 01 set of dossiers to the Investment Registration Authority;
- The authority reviews the conditions under Clause 1, Article 46 to adjust the project;
- Issues the adjusted Investment Registration Certificate to both the transferring and receiving investors.
2. Dossiers for transferring investment projects
According to Clause 5, Article 48 of Decree No. 31/2021/ND-CP, the application dossier for adjusting an investment project includes:
- Written request for investment project adjustment;
- Report on the project implementation status up to the time of transfer;
- Contract or principle contract on the transfer of part or all of the investment project;
- Copies of legal status documents of both the transferring and receiving investors;
- Copies of the Investment Registration Certificate, Investment Policy Approval Decision, and Investor Approval Decision (if any);
- Copy of BCC contract (for projects in the form of BCC);
- Copies of one of the relevant documents of the receiving investor.
3. If transferring a business investment project, can the business investment project contract be amended?
According to Article 76 of the Law on Bidding 2023, when transferring a business investment project under the law, the business investment project contract may be amended.
Note: To transfer a business investment project, the following conditions must be met:
- The transfer must be approved by the competent authority;
- The receiving investor must meet technical and financial capacity requirements to implement the project;
- The receiving investor must commit to fully inherit the rights and obligations of the transferor under the business investment project contract.
4. When is the right to transfer an investment project exercised?
According to Clause 1, Article 48 of Decree No. 31/2021/ND-CP, investors have the right to transfer part or all of their investment project to another investor when they meet the conditions stipulated in Clause 1, Article 46 of the Law on Investment 2020.
5. What conditions must enterprises meet to exercise the right to transfer investment projects?
Enterprises must satisfy the conditions under Clause 1, Article 46 of the Law on Investment 2020, including:
- The investment project or its portion being transferred is not terminated the operations;
- Foreign investors receiving the project must meet the conditions stipulated in Clause 2, Article 24 of the Law on Investment 2020;
- Compliance with land law if the transfer involves the transfer of land use rights and assets attached to land;
- Compliance with housing law and real estate business law if transferring housing construction projects or real estate projects;
- Compliance with the conditions stated in the investment policy approval documents, investment registration certificates, or other related laws (if any).
6. Are there taxes or financial obligations when exercising the right to transfer an investment project?
According to Clause 2, Article 48 of Decree No. 31/2021/ND-CP, if the transfer generates income, the transferring investor must fulfill financial obligations to the State under the law.
IV. Legal advisory services on the right to transfer investment projects
Above are all detailed information provided by NPLaw to assist clients in relation to investment restructuring. If clients have any questions on the above matter or other legal issues, please promptly contact NPLaw for our lawyers to directly advise and guide resolution.
