10 Points To Note When Adjusting Investment Projects, Adjusting The Investment Registration Certificate

Attracting foreign investment is a key policy in the economic development strategy of any country. Investment projects not only contribute to economic growth but also bring many important social benefits. To implement these projects, foreign investors need to have an Investment Registration Certificate. During the implementation process, if there are issues requiring adjustment of the investment project and the Investment Registration Certificate, enterprises need to comply with legal regulations and meet the requirements in the procedure. Here are 10 Points To Note When Adjusting Investment Projects, Adjusting The Investment Registration Certificate

Article 40 of the 2020 Investment Law stipulates the basic contents of the Investment Registration Certificate. When adjusting an investment project that changes the contents requiring an adjustment of the Investment Registration Certificate, enterprises should note the following points:

1. Name of the investment project

The name of the investment project is one of the important details shown on the Investment Registration Certificate. Typically, the name of the investment project will be the name of the economic organisation implementing the project to facilitate easy identification and avoid confusion. In case a foreign investor wishes to change the name of the project, they must follow the procedure to adjust the project name in accordance with legal regulations.

2. The information of the investor

Information about the investor is mandatory and is shown on the Investment Registration Certificate. This information includes the investor’s name, the certificate of incorporation for organisations, or a passport for individuals, along with other relevant information. If there are any changes to the information related to the investor during the project implementation, the enterprise must follow the procedure to register the corresponding information adjustment. Note that during the registration for adjustment, the enterprise needs to provide documents proving the changes. If these documents are foreign, they must be legalised accordingly.

3. Location and land area of the investment project

Currently, the law on investment does not stipulate that the location of the investment project must be the same as the registered address of the headquarters of the economic organisation to be established. Therefore, when an investor registers to adjust the location of the investment project, the company only needs to complete the registration dossier to adjust the Investment Registration Certificate accordingly. In cases where the project implementation address and the company address are the same, if the investor makes changes, the economic organisation must follow the procedure to register changes to the enterprise registration details to change the headquarters address, and simultaneously adjust the Investment Registration Certificate. A foreign-invested economic organisation, when registering to adjust the location of the investment project, must provide a copy of the lease contracts for the location or other documents that determine the right to use the new location to implement the investment project as required by regulations.

4. Objectives and scale of the project

During the operation of the project, depending on the business plan and market economy, the investor may increase/decrease the scale of operations, add or omit objectives different from the initial registration. In such cases, the investor must carry out procedures to adjust the Investment Registration Certificate. In these instances, the investor must present a business plan accompanied by financial documents to convince the relevant authorities of the feasibility of changing the scale or objectives of the operation. Another point to note is that whether registering the initial establishment of the project or registering for adjustments, the project’s objectives must meet market access conditions and comply with the WTO commitments on services.

In the event that the investment project, after adjustment, becomes a project that requires approval of the investment guideline, the investor must seek approval of the investment guideline before adjusting or supplementing the contents of the Investment Registration Certificate. If the adjustment content relates to a conditional investment sector, the authority issuing the Investment Registration Certificate must consult with the relevant Ministries and agencies before adjusting or supplementing the contents of the Investment Registration Certificate.

5. Capital investment

Investment capital for an investment project includes the capital contributed by the investor to implement the project and the capital the investor raises. The law does not specifically define the concept of contributed capital for project implementation; this concept is used in business activities. Contributed capital for project implementation refers to the amount of capital that an investor contributes to a specific investment project. This contributed capital may be less than or greater than the charter capital of the economic organisation implementing the project and is part of the project’s investment capital.

During business operations, investors often base their decisions on the project’s plans and objectives to consider suitable sources of capital. Thus, investors may increase, decrease, or mobilise different sources of capital. In such cases, the investor must carry out procedures to adjust the Investment Registration Certificate, specifically regarding the project’s investment capital. The registration dossier for adjustment must include documents proving the investor’s financial capacity, such as financial capability statements, bank statements, financial reports, or other relevant documents depending on the specific case.

Additionally, investors must ensure that the additional capital contribution is made according to the schedule recorded on the adjusted Investment Registration Certificate and in compliance with legal regulations. If the investor does not fulfil the committed obligations, the enterprise must apply for an extension of the capital contribution period and will be subject to penalties as prescribed by law.

Another note on reducing investment capital is that the Investment Registration Authority may require the investor to explain the business efficiency, specifically whether the enterprise has a long-term, stable revenue sufficient for reinvestment while continuing the registered project. Alternatively, the investor may be required to simultaneously register a reduction in the project’s scale accordingly.

6. Duration of the investment project

According to Article 44 of the Law on Investment 2020, the operational duration of an investment project is specified as (i) not exceeding 70 years for projects within economic zones and (ii) not exceeding 50 years for projects outside economic zones. When the operational duration of an investment project expires, if the investor wishes to continue the project and meets the conditions stipulated by law, they can proceed with the procedures to extend the operational duration of the Investment Registration Certificate as per legal regulations. An enterprise can only extend the duration of the investment project if it has fully contributed the capital in accordance with current legal provisions.

7. Project operation term

Investors must adhere to the project operation term as committed when registering the project. In cases where, due to objective or subjective reasons, the investor cannot execute the project operation according to the schedule, the enterprise must register to adjust the project implementation schedule. Note that if the enterprise does not timely register to adjust the project operation term, leading to delays in the project’s execution compared to the actual plan, the enterprise may face penalties as prescribed by law. During the process of adjusting the project schedule, the enterprise must provide a convincing explanation for the schedule adjustment and the progress made during the project’s operational period for the competent authority to consider.

8. Investment incentives or investment support, and bases or conditions for application

When an enterprise is implementing an investment project, if there are changes in the form or level of incentives and support recorded in the Investment Registration Certificate for eligible recipients, adjustments must be made on the Investment Registration Certificate.

9. Updating other related information

When conducting procedures to adjust the Investment Registration Certificate, enterprises also need to update other related information that has been changed, such as passport information, addresses of authorised representatives, legal representatives, etc.

10. Administrative Penalties

Based on Article 17 of Decree No. 122/2021/ND-CP issued by the Government on 28 December 2021, regarding administrative penalties in the fields of planning and investment, if an enterprise fails to adjust the Investment Registration Certificate when adjusting an investment project that changes the content of the Investment Registration Certificate, it may be fined from 70,000,000 VND to 100,000,000 VND.

The above is an overview of 10 Points To Note When Adjusting Investment Projects, Adjusting The Investment Registration Certificate that Phuoc & Partners share with readers. If you have any difficulties related to the legal field, please contact us. Phuoc & Partners is a law firm established in Vietnam and currently has nearly 100 members working in three offices in Ho Chi Minh City, Hanoi and Da Nang. Phuoc & Partners is also considered one of the law firms with a team of staff specialising in the leading legal field in Vietnam and whose practice areas are rated top in the legal market such as Labour and Employment, Taxation, Mergers and Acquisitions, Litigation. We are confident that we are one of the Law Firms providing the best legal services to our customers.