Is there any investor conversion for projects in industrial park?

My company has been granted the Certificate of investment in electric equipment project by Industrial Zone X, province Q from 2012. Because I am not able to carry on this project anymore, my company wants to transfer this project to another company. So, can we transfer this project to another company with the procedure of transferring the investor? I hope that FDVN can give me an advice soon. Sincerely thank you.

FDVN's opinion:

[1]. The right to change the project’s investor:

According to Clause 1, Article 37 of Decree No. 118/2015 /ND-CP detailing and guiding the implementation of a number of articles of the Law on Investment: “An investor may transfer part of or the whole investment project to another investor in accordance with the conditions specified in Clause 1 Article 45 of the Law on Investment. If the project transfer generates income, the transferor shall fulfill his/her tax liability as prescribed by law”.

Accordingly, current law provisions allow your company to transfer a part of or the whole investment project to another investor if your company meets the conditions under Clause 1 Article 45 of the Law on Investment 2014:

1.      The project is not terminated in the cases as prescribed in Clause 1 Article 48 of this Law, include:

• The investor decides to terminate the project;
• The project has to be terminated according to the regulations of the contract or company’s charter;
• The project duration is over;
• Investment projects fall into one of the cases of temporary suspension or cessation of operation of investment projects where investors are incapable of overcoming the conditions of cessation of operation;
• The land of the project is withdrawn by the State, or the investor is  not permitted to keep using the premises and fails to complete procedures for change of project location within 06 months from the day on which the decision on land/premises withdrawal is issued;
• The registry office cannot contact the investor or the investor’s legal representative after 12 months from the date of suspension of the project;
• The investor fails to execute or is not able to execute the project after 12 months according to the schedule registered with the registry office and is not permitted to extend the project execution schedule;
• The project is terminated under a decision of the Court or arbitral tribunal.

2.   Investment conditions applied to foreign investors are satisfied in case the foreign investor receives a project of investment in conditional business lines;

3.     Regulations of law on law, real estate trading is complied with if the project transfer is associated with the transfer of land;

4.     Conditions in the Certificate of investment registration or relevant regulations of the law are complied with.

According to the aforementioned provisions and information provided by you about your company's need for project assignment, in case your company meets all of the above conditions, your company and another investor can conclude an agreement on investment project transfer and carry out the necessary procedures under Law on Investment to adjust the investor implementing the project. Accordingly, the information about the investor on the Investment Registration Certificate granted to your company will be adjusted.

[2]. Procedure on project’s investor adjustment:

The procedure on project’s investor adjustment are specified in Article 40 of the Law on Investment 2014 and Article 37 of Decree 118/2015 /ND-CP detailing and guiding the implementation of a number of articles of the Law on Investment::

The application consists of:

• A written request for permission for project adjustments, a report on the project’s progress up to the time of transfer;
• The project transfer contract or another document with equivalent legal value;
• Copies of the ID card or passport (if the investor is an individual) or Certificate of Enterprise Registration or another document with equivalent legal value (if the investor is an organization);
• Copies of the Investment Registration Certificate or decision on investment guidelines (if any);
• Copies of the BCC contract (for BCC projects);
• Copies of one of the following documents of the transferee: financial statements of the last 02 years; commitment to provide financial support by the parent company, commitment to provide financial support by a financial institution, the guarantee of transferee’s financial capacity, documents describing the transferee’s financial capacity;

Steps taken:

Step 1: Your Company shall submit the application and related documents to the investment registration authority.

Step 2: The investment registration authority shall consider the fulfillment of conditions for project transfer to adjust the Investment Registration Certificate within 10 working days from the day on which the valid application. The investment registration authority shall send a written notification to the investor and explain if the application for adjustment of the Investment Registration Certificate is rejected.

That is the advice of FDVN Law Firm based on studying law provisions and theories. We hope that our opinions would be useful.

Legal Advisor: Nguyen Thi Suong

FDVN Law Firm

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