The sequence and procedures for proposing and approving the investment project proposal in Vietnam.

Approval of the investment project proposal is one of the important decisions for investors to carry out their investment projects. However, in reality, many investors are still unclear about this issue, leading to errors in preparation and failure to obtain approval of the investment project proposal. So what documents should investors prepare and what is the procedure for approving the investment project proposal?

1. What is the approval of the investment project proposal?

1.1 What is an investment project?

According to Article 3, Clause 4 of the 2020 Investment Law: “an investment project is a collection of proposals to allocate medium or long-term capital for conducting business investment activities in a specific area, within a determined period of time”.

1.2. What is an investor?

According to the regulations in Clause 18, Article 3 of the Law on Investment 2020: “Investors are organizations or individuals conducting business investment activities, including domestic investors, foreign investors, and economic organizations with foreign investment capital.”

In which:

-Foreign investors are individuals with foreign nationalities, organizations established under foreign laws conducting business investment activities in Vietnam (as stipulated in Clause 19, Article 3 of the Law on Investment 2020).

-Domestic investors are individuals with Vietnamese nationalities, economic organizations without foreign investors as members or shareholders (as stipulated in Clause 20, Article 3 of the Law on Investment 2020).

1.3 What is investment project proposal approval?

According to Article 3, Clause 1 of the Law on Investment 2020: “Approval of investment policy means that the competent state agency approves the investment objectives, location, scale, progress, implementation duration of the project; investor or form of investor selection and special mechanisms, policies (if any) to implement the investment project.”

However, not all investment projects require approval of investment policy. Only investment projects falling under the cases specified in Articles 30, 31, 32 of the Law on Investment 2020 are required to undergo the procedure for approval of investment policy.

2. The file requesting approval for investment project proposal

According to the provisions in Article 33, paragraphs 1 and 2 of the Law on Investment 2020, the dossier required to request approval of the investment project proposal includes 2 cases as follows:

2.1 Documents for proposing investment policy approval for investment projects proposed by investors

-The document requesting the implementation of the investment project includes a commitment to bear all costs and risks if the project is not approved;

-Documents on the investor’s legal status;

-Documents proving the financial capacity of the investor, including at least one of the following: financial reports of the past 02 years of the investor, financial support commitment of the parent company, financial support commitment of financial institutions, guarantee of financial capacity of the investor, or other documents proving the financial capacity of the investor;

-Investment project proposal including the following main contents: the investor or the chosen form of investment, investment objectives, investment scale, investment capital and mobilization plan, location, duration, implementation schedule, information on the current land use status at the project location and proposed land use needs (if any), labor needs, proposed investment incentives, economic and social impact of the project, preliminary assessment of environmental impact (if any) according to environmental protection regulations.

In cases where the construction law requires the preparation of a feasibility study report, the investor may submit the feasibility study report instead of the investment project proposal;

-In case the investment project does not require the state to allocate land, lease land, or permit a change in land use purpose, a copy of the documents on land use rights or other documents identifying the location for the investment project must be submitted;

-Explanation of the technology used in the investment project for projects subject to evaluation, consultation on technology according to the regulations of the law on technology transfer;

-BCC contract for investment projects in the form of BCC contracts;

-Other documents related to the investment project, requirements on the conditions and capacity of the investor as prescribed by law (if any).

2.2 The file requesting approval of the investment project’s principal agreement is established by the state agency with the authority to do so.

-Proposal for investment policy approval;

-The proposed investment project includes the following main contents: investment objectives, investment scale, investment capital, location, duration, implementation progress, project impact, economic-social efficiency of the project; information on the current land use situation at the project implementation location, land recovery conditions for projects subject to land recovery, expected land use needs (if any); preliminary assessment of environmental impact (if any) according to environmental protection laws and regulations; expected form of investor selection and conditions for investors (if any); special mechanisms, policies (if any).

In cases where construction laws require the preparation of a feasibility study report, the competent state agency may use the feasibility study report in place of the investment project proposal.

According to Article 31 of Decree 31/2021/NĐ-CP detailing and guiding the implementation of certain provisions of the Investment Law, the documents and explanations for the proposed investor selection method include:

-A certified copy of the land recovery project list approved by the provincial People’s Council; documents proving that the land has been cleared (if any), and other explanatory documents (if any) in the case where the investor selection method is through land use rights auction according to land laws and regulations;

-A certified copy of the land recovery project list approved by the provincial People’s Council; documents proving that the land has not been cleared (if any), and other explanatory documents (if any) in the case where the investor selection method is through bidding for projects that use land. In this case, the proposed investment project tentatively determines the total project implementation cost based on the total investment amount of the project according to construction laws and regulations, not including compensation, support, and resettlement costs.

In the case of selecting an investor through bidding according to the regulations of the laws on socialization and specialized laws, documents explaining the legal basis and conditions for applying the form of selecting an investor through bidding according to the regulations of the laws on socialization and specialized laws are required.

-Documents proving that the project is not in the list of projects for land revocation approved by the provincial People’s Council; valid copies of the Decision on land allocation or leasing, lease contracts, or Certificates of land use rights, Certificates of ownership of houses and land use rights, Certificates of land use rights, ownership of houses, and other assets attached to land in the case of proposing approval of the investment policy at the same time as approving the investor for investors who have the right to use land according to the provisions at point a, clause 4, Article 29 of the Law on Investment.

-Valid copies of documents from the competent People’s Committee approving the transfer of ownership, capital contribution, or lease of land to carry out the investment project, and valid copies of other documents and agreements on the use of the location to carry out the investment project in the case of proposing approval of the investment policy at the same time as approving the investor for investors who receive the transfer of ownership, capital contribution, or lease of agricultural land to carry out non-agricultural production and business projects according to the provisions at point b, clause 4, Article 29 of the Law on Investment 2020.

In addition, for construction investment projects, the investment project proposal includes:

-The provisions specified in point d, clause 1 or point b, clause 2 of Article 33 of the Investment Law 2020; explanation of meeting the objectives and orientation of urban development, programs, housing development plans; expected division of the project components (if any); preliminary phased investment plan to ensure synchronized requirements; preliminary structure of housing products and the allocation of land fund for social housing development; preliminary investment plan for urban infrastructure construction and management within and outside the project scope, in which the investor proposes the preliminary part of urban infrastructure that they will keep for business investment, the part of urban infrastructure that the investor is responsible for transferring or proposing to transfer to the locality for residential or urban investment projects.

For urban development projects, in cases where construction laws require feasibility study reports, the investor or competent state agency may submit or use the feasibility study report instead of the investment project proposal, in which the investor proposes the preliminary part of urban infrastructure that they will keep for business investment, the part of urban infrastructure that the investor is responsible for transferring or proposing to transfer to the locality.

-The provisions specified in point d, clause 1 or point b, clause 2 of Article 33 of the Investment Law 2020, and the expected division of the project components (if any) for construction investment projects not falling under the provisions specified in point a of this clause.

3. The sequence and procedures for approving the investment project’s proposal.

For different investment projects, the authority to approve the investment project proposal also varies, including: the National Assembly, the Prime Minister, and the Provincial People’s Committee.

3.1 The sequence and procedures for approving investment project proposals by the National Assembly.

According to Article 34 of the 2020 Investment Law, the sequence and procedures for approving the investment policy of the National Assembly are as follows:

-The investor or competent state agency shall prepare a dossier in accordance with the regulations in Section II and submit it to the Ministry of Planning and Investment.

-Within 15 days from the date of receiving a complete dossier, the Ministry of Planning and Investment shall report to the Prime Minister to establish the State Appraisal Council.

-Within 90 days from the date of establishment, the State Appraisal Council shall appraise the dossier and prepare an appraisal report containing the appraisal contents specified in Article 33 of the Investment Law to submit to the Prime Minister.

-At least 60 days before the opening of the National Assembly session, the Government shall prepare and submit the dossier requesting approval of the investment policy to the responsible agency for appraisal of the National Assembly.

-The National Assembly shall consider and pass a resolution approving the investment policy including the contents specified in Section 1, Article 3 of the Investment Law.

3.2 The sequence and procedures for approving the investment policy proposed by the Prime Minister of the Government.

According to the regulations in Article 35 of the Investment Law 2020, which are guided by Article 32 of Decree 31/2021/NĐ-CP detailing and guiding the implementation of some provisions of the Investment Law, the sequence and procedures for approving the investment policy proposed by the Prime Minister of the Government are as follows:

-The investor or the authorized state agency shall prepare and submit 08 sets of documents requesting the approval of the investment policy in accordance with the above provisions and send them to the Ministry of Planning and Investment.

-Within 03 working days from the date of receiving a complete and valid dossier, the Ministry of Planning and Investment will send the dossier to the relevant state agency for appraisal opinions on the appraisal content specified in Article 33 of the Investment Law.

-Within 15 days from the date of receiving the request from the Ministry of Planning and Investment, the agency giving appraisal opinions on the content under its state management scope shall send its opinions to the Ministry of Planning and Investment.

-Within 40 days from the date of receiving a valid dossier, the Ministry of Planning and Investment shall organize the appraisal of the dossier and prepare an appraisal report including the appraisal content specified in Article 33 of the Investment Law to submit to the Prime Minister for approval of the investment policy.

-Within 07 working days from the date of receiving the appraisal report from the Ministry of Planning and Investment, the Prime Minister shall approve the investment policy, including the contents specified in Clause 1 of Article 3 of the Investment Law.

Note: For investment projects simultaneously under the jurisdiction of approving investment policy of at least 02 provincial-level People’s Committees, the Prime Minister shall designate the investment registration agency of a province or centrally-run city to issue an Investment Registration Certificate for the entire project.

3.3 The sequence and procedures for approving investment project proposals by the Provincial People’s Committee

According to Article 36 of the 2020 Investment Law, guided by Article 33 of Decree 31/2021/NĐ-CP detailing and guiding the implementation of certain provisions of the Investment Law, the sequence and procedures for approving investment proposals by provincial People’s Committees are as follows:

-The investor or competent state agency shall prepare and submit 04 sets of investment proposal approval documents as prescribed above and send them to the provincial investment registration agency.

-Within 35 days from the date of receipt of the documents, the investment registration agency must notify the investor of the result.

-Within 03 working days from the date of receipt of a complete and valid set of documents, the investment registration agency shall send the documents to seek opinions from the departments, district-level People’s Committees where the project is planned to be implemented, and relevant agencies on the content within the scope of state management of that agency.

-Within 15 days from the date of receiving the request from the investment registration agency, the agency that provides comments shall send its assessment opinion on the content under its state management scope to the investment registration agency.

-Within 25 days from the date of receiving a valid dossier, the investment registration agency shall prepare an evaluation report including the evaluation contents stipulated in Article 33 of the Investment Law and submit it to the provincial people’s committee.

-Within 7 working days from the date of receiving the dossier and the evaluation report, the provincial people’s committee shall approve the investment policy. In case of refusal, it must be notified in writing and reasons must be specified.

-The provincial people’s committee shall consider approving the investment policy, including the contents prescribed in Clause 1, Article 3 of the Investment Law such as objectives, locations, scale, progress, project implementation deadline, investor or investor selection form, and special mechanisms and policies (if any) for project implementation.

Note: For the projects implemented in the economic zone regulated in Article 32 Section 2 of the 2020 Investment Law, the investor approval procedure for the investment project is as follows:

-The investor submits 04 sets of documents requesting investor approval to the Management Board of the economic zone, including:

+A request for investor approval document;

+Documents on the legal status of the investor;

+Financial capability proof documents of the investor, including at least one of the following documents: the investor’s financial report for the last 02 years; financial support commitment from the parent company; financial support commitment from a financial institution; guarantee of the investor’s financial capacity; other documents proving the financial capacity of the investor;

+Explanation of the technology used in the investment project for projects subject to appraisal, seeking opinions on technology as regulated by the law on technology transfer;

+Business cooperation contract (BCC) for the investment project under the BCC contract form;

+Other documents related to the investment project, requirements on the investor’s conditions and capacity as regulated by the law (if any).

-The Management Board of the economic zone sends the file to relevant state agencies for opinions according to the corresponding regulations in Point b Section 1 and Point b Section 2 of Article 30 Decree 31/2021/NĐ-CP detailing and guiding the implementation of some provisions of the Investment Law.

-Within 15 days from the date of receiving the request from the Management Board of the economic zone, the agency receiving the opinions shall send its opinions on the content within its state management scope to the Management Board of the economic zone.

-The Management Board of the economic zone approves the investor within 25 days from the date of receiving valid documents.

4. Legal basis

-The Law on Investment 2020.

-Decree No. 31/2021/NĐ-CP providing detailed regulations and guidelines for the implementation of some provisions of the Law on Investment.