Form and procedures of investment of foreign investors (Part 2)

I. LEGAL BASIS:

• Law on Emterprises 2014
• Law on Investment 2014
• Law on Public Investment 2014
• Decree No. 63/2018/NĐ-CP on investment in the form of public – private partnership
• Decree No. 118/2015/NĐ-CP on guildlines some articles of the Law on Investment
• Circular No. 16/2015/TT-BKHĐT on regulations on application forms for investment procedures and reporting forms on investment in Vietnam.

II. FORMS AND PROCEDURES OF INVESTMENT:

2.Investment under PPP contracts (public – private partnership):

“PPP” (Public-Private Partnerships) means any form of investment on the basis of a contract between a regulatory agency and an investor, a special purpose entity to build, innovate, operate and manage infrastructure and public service project.

Investment sectors under PPP contracts:

• Transport;
• Power plants, transmission lines;
• Public lighting system; clean water supply system; water drainage system; sewage/waste collection and disposal system; parks; parking lots; storage yards; cemeteries;
• Head offices of regulatory bodies; state-owned housing for government employees; social housing; resettlement housing;
• Health; education and training, vocational training; culture; sports; tourism; science and technology, meteorology and hydrology; IT application;
• Infrastructure works for commerce, urban areas, economic zones, industrial parks, industrial complexes, concentrated IT parks; hi-technology zones; incubators, technical facilities, common working areas supporting for SMEs;
• Agriculture and rural development; services enhancing the correlation of agricultural production with farm product processing and sale;
• Other sectors decided by the Prime Minister.

Conditions for making project proposal:

Except for projects established by Ministries, Departments and provincial agencies, investors can propose PPP projects with the following conditions:

• In conformity with the planning for the development of sectors, regions; and the plan for the local socio-economic development that are approved by competent authorities;
• In conformity with the investment sector prescribed above;
• Free of duplication with projects obtaining an approval for project investment proposal;
• Capital recovery potentials;
• In conformity with ability to balance sources of funds of State contribution to PPP project;
• An environmental impact assessment report is made in accordance with law on environment protection.

Procedure of project establishment and proposal under PPP contract:

Step 1: Establishing dossier of project proposal.

Dossier consists of:

• A written proposal for the project execution, including commitment to take all risks and bear all costs if the project proposal is not approved.
• Pre-feasibility study report or feasibility study report in case of group C project
• A document confirming legal personality, capacity and experience of the investor.
• Other necessary documents used for explaining the project proposal (if any).

Step 2: Approval for project investment proposal made by investor.

State agencies in charge of investment projects shall decide on investment project proposed by investors, with a maximum duration of 30 days for group B projects, a maximum of 60 days for group A projects from the date of receipt of all valid documents.

Step 3: Announcement of project proposal.

Within 07 working days from the day on which the project investment proposal is approved, ministries and the People’s Committee of province shall issue the announcement about a single project or the project portfolio on the National Electronic Procurement System according to the regulations on bidding.

 If a project includes contents relating to the intellectual property rights, trade secret, technology or agreements on mobilizing capital used for a project that needs top secret, then investors shall make a deal with ministry or People’s Committee of province on the contents of the announcement.

Step 4: Establishing contract of project or enterprise/company for emplementation of project (if any).

To be continued...

Legal expert: Thuy Vy (0905.045.915)

FDVN Law Firm