Any amendments, updates in the legal framework on investment are always the concern of the domestic and foreign enterprises in order to promptly catch up with the trend and gain competitive advantages in investment and business operations. Within the scope of this article, LuatViet continues to provide the prominent regulations at the stage of the investment project’s adjustment and extension under the Law on Investment 2020 and Decree No.31/2021/ND-CP which came into force early of this year.
Adjustment of the investment project
Pursuant to the Law on Investment 2014, the investors are entitled to propose the adjustments only when the investment project’s objectives change throughout its execution.
The Law on Investment 2020 has some amendments; accordingly, the investors are entitled to adjust the investment project if falling into the following circumstances:
- Merge projects or fully divide or partially divide a project into multiple projects;
- Transfer the project in part or in full;
- Exercise the rights to use land and property on land which is part of the investment project to contribute capital to establish an enterprise or carry out business cooperation.
With regard to the investment project whose investment guidelines have been approved, the investors must follow the procedures for approving the adjustments to the investment guidelines in one of the following circumstances:
- Increasing/ reducing the land area by 10% or more than 30 hectares location;
- Changing the investment location;
- Changing/adding the objective;
- Increasing/reducing the total investment capital by 20% or more, thereby changing the scale of the investment project;
- Extending by more than 12 months compared to the initial project execution schedule;
- Adjusting the duration;
- Changing the technology.
Moreover, the investors are not permitted to extend the investment execution schedule by more than 24 months compared to that stated in the first written approval for the investment guidelines, except for the following circumstances: (i) An event of force majeure; (ii) due to late allocation or other administrative formalities as requested by the State authority; (iii) changing the master planning; (iv) changing/ adding the objectives set out in the investment guideline approval; (v) Increasing the total investment capital by 20% or more, which changes the scale of the investment project.
If the project falls under one of the above-mentioned circumstances, the investors must file an application for adjustment to the investment project, and submit it to the Authority of investment registration and other relevant authorities.
Conditions for extending the investment project
When the investment project has reached its final duration but the investors are still in the investment process, continuing to bring the positive efficiency and to have the development potential in the future, the investors shall prepare the essential conditions and then follow the procedure for adjusting the Operational duration of the investment project in a timely manner. However, the investors shall meet the following requirements:
- Allocating/ leasing land in accordance with the laws on land;
- In accordance with the master planning and the development orientation of the project area;
- Not using outdated technology or potentially causing environmental pollution, or resource-intensive projects;
- Not being the investment projects that the investor must be transferred as assets without refund/compensation.
If all of the above-mentioned requirements are fully satisfied, the project will be considered and granted the approval to extend, allowing it to operate for another 50 to 70 years, depending on the area of the investment project.