The decision on investment guidelines (forthcoming to change as “approval of investment guidelines”) is an “obstacle” which has been usually mentioned with fear, especially by the enterprise carrying out large projects. The journey of obtaining authorities’ nod of assent is often uneasy, to some extent due to complicated procedure and sometimes arising out the interrogation.
For the purpose of resolving such problem, Law on Investment 2020, which will take effect from 01/01/2021, brings many turning-points and changes to clarify and simplify this procedure that the enterprises therefore definitely need to aware and understand.
Perform unified procedure under the Law on Investment
The project approval is not the specialty only of Law on Investment. The overlap and conflict between investment law and other laws have caused many troubles for investors. Therefore, lawmakers have integrated and revised these current regulations into Law on Investment 2020 for implement in unified manner.
Specifically, the projects that need to be placed on the Prime Minister’s desk will be changed as follows: (1) add housing and urban area projects with at least 50 hectares or 15.000 residents in urban area region, or 100 hectares or 10.000 residents in other regions, or within national monument (in accordance with housing and urban area law); (2) abandon projects of exploration and exploitation of oil and gas (for avoidance of overlap with the Petroleum Law).
Likewise, the provincial People’s Committee will approve additionally: (1) housing and urban area projects which are smaller than those of Prime Minister’s authority or in the historic inner city or restricted development area (for Saigon and Hanoi); (2) projects relating to foreign investor in islands, border and coastal communes, or other areas affecting national defense or public security (in consistency with Land Law).
Narrow the scope and “untie” the projects
By general manner of expression, Law on Investment 2014 requires that all projects in respect of national airport, air transport and seaport shall obtain the Prime Minister’s approval. To rationalize procedure and aim at right objects, Investment Law 2020 specifically identifies these projects with narrowed scope, including: (1) construction of new airports, runways, international passenger terminals, cargo terminals (capacity of at least 1 million tons/year), (2) air transportation of passenger; (3) construction of new harbors belonging to special seaports (Hai Phong, Khanh Hoa, Vung Tau), or class I seaports (Da Nang, Dung Quat, HCMC, Dong Nai, Can Tho, etc.) with capital of at least 2,300 billion VND (in accordance with the Law on Public Investment).
Particularly, from 01/01/2021, the following projects will no longer need to be approved by the Prime Minister: (1) have at least 5.000 billion of capital; (2) tobacco production; (3) sea shipping and establishment of science and technology organization/enterprise (100% foreign capital) of foreign investors.
The golf course projects have also been moved to the provincial level’s authority, instead of needing the Prime Minister’s nod, in order to strengthen decentralization for the local interests.
Change the “one-stop” – “two-round” mechanism
Under the current regulations, in all cases, the investors shall submit application to the Department of Planning and Investment (provincial level). This agency will carry out the path of next steps. This “one-stop” mechanism seems to be convenient, but it turns out complicated in unworthy manner. Because if the final address is the National Assembly or Prime Minister, the application must experience duplicate “consultation and appraisal” process which is carried out by both Department and Ministry of Planning and Investment.
With the Law on Investment 2020, the enterprises shall send directly the application to this Ministry to submit the projects in front of the National Assembly or the Prime Minister, while the Department only accepts the projects vested to the authority of provincial People’s Committee. At the same time, instead of “one door” mechanism, the enterprises only need to submit “uniform application” to no matter which level. The simplification of administrative procedures is clearly good news for the investors, making their journey more reasonable and less difficulty.