On 12 November 2015, the Government issued Decree No. 118/2015/ND-CP (“Decree No. 118”) providing guidelines for implementing certain articles under the Law on Investment. This Decree takes effect on 27 December 2015. Decree No. 118 addresses the following main points:
Conditions applicable to foreign investors
This Decree stipulates on conditions applicable to foreign investors. Accordingly, foreign investors which are subject to international treaties providing different regulations on investment conditions may choose which treaties to be applied to them. Additionally, investors from countries which are not members of the World Trade Organization (“WTO”) will receive the same treatment as those from WTO-member countries.
For industries or services not yet committed or not provided for under Vietnam’s WTO Commitments on Services and other investment international treaties and for which Vietnamese law has not set forth investment conditions applicable to foreign investors, the Investment Registry shall seek opinions from the Ministry of Planning and Investment and the relevant agencies for consideration and decision-making. For projects that are subject to the issuance of investment policy decisions, the competent State authority shall not review contents that have been previously appraised and approved by other competent State authorities.
For investment activities carried out in Vietnam, the investor being a Vietnamese citizen and having foreign nationality is entitled to select the applicable investment conditions and investment procedures as applicable to a domestic investor or a foreign investor.
Investment Registration Procedures
Foreign investors must implement an online declaration of information about their investment projects on the National Foreign Investment Information System, and must also concurrently submit the application for the issuance and/or amendment of the Investment Registration Certificate to the Investment Registry within 15 days from the date of the online declaration.
Foreign investors are not requested to supplement other documents apart from those required under the Investment Law and this Decree. The
Investment Registry shall provide only one written notice to the Investor of all requests for amendment and/or supplement of investment registration documents within 5 working days from the date of fully receiving documents.
When investing in the form of capital contribution and/or purchase of shares and/or capital contribution portions, foreign investors are not required to carry out the procedures for issuing an Investment Registration Certificate. Economic organizations in which a foreign investor contributes capital, purchases shares and/or capital contribution portions are not required to carry out the procedures for issuing/amending the Investment Registration Certificate or investment decisions/strategies with respect to the investment projects which have been implemented before the time at which the foreign investor has contributed capital or purchased shares/capital contribution portions.
This Decree also provides clarification on ownership of charter capital for foreign investors in forms of contributing capital and buying shares of economic organizations. Specifically, (1) increasing foreign ownership from less than 51% to 51% or more and (2) increasing the charter capital ownership proportion of a foreign investor who already owns 51% or more of the charter capital in the economic organization are all subject to registration procedure of capital contribution or purchase of shares/capital contribution.
Termination and Transfer of Projects
For projects having an investment certificate/business registration certificate, the Investment Registry may decide to terminate the project without revoking the investment certificate/business registration certificate, which would remain valid. The Investment Registry may also terminate a project if the project stops operating for a period of 12 months and the investor or its legal representative cannot be reached.
Procedures and dossier requirements for transferring projects are also provided in this Decree.
Incentives and other provisions.
For investment projects not provided for under Clause 2, Article 17 of this Decree, investors may self-determine investment incentives and conduct the procedures for investment incentive entitlement at the relevant authority for the application of investment incentives.
Economic organizations carrying out investment projects must send project status reports online (on a monthly, quarterly or yearly basis) through the National System of Investment Information. Decree No. 118 also provides that the charter capital of the economic organization established by a foreign investor for project implementation does not necessarily equal to the project’s capital investment.
In the case of dissolution, temporary suspension or seal sample notification, enterprises are not required to carry out the procedures for converting the investment license, the investment certificate/business registration certificate or equivalent legal documents into an enterprise registration certificate.