Currently, Vietnam with open investment policies is an attractive destination for investors. However, due to the complicated situation of the Covid-19 pandemic and other objective reasons, many investors do not implement project in accordance with the content specified in the Investment Registration Certificate (IRC). Especially, investors are unable to contribute capital on schedule under the IRC. In this case, what should the investor do? What is a reasonable and legal solution for investors to extend the time of capital contribution?
TNTP’s opinion:
When investors notice that they do not implement project, namely, they can not contribute capital within the time limit specified in the IRC, investors can perform one (01) of the following two (02) procedures:
1. Procedure for extending investment progress
Pursuant to Article 46 of the Investment Law 2014, for a Project granted IRC, the investor must make a written proposal to the investment registration authority when extending the schedule of contributing investment capital, progress of construction and putting the main work into operation (if any); the progress of implementing the operational goal of the investment project. It means the Investment Law 2014 allows investors to implement the procedure of extending the investment progress by submitting one (01) application dossier for extending the investment progress to investment registration agency.
Please note that investors only implement procedure of extending the investment progress when on the due date that Department of Planning and Investment receives the proposal, the time limit of contributing capital of investors is still available. The total extension of the investment progress shall not exceed 24 months.
2. Procedure for Adjusting the IRC
Stage 1: Submit Dossier of adjusting the IRC
According to Article 40 of the Investment Law 2014, when there is a need to change the content of IRC, the investor shall implement procedure for adjusting the IRC by submitting the Dossier of adjustment of IRC to the investment registration agency – the Department of Planning and Investment (“the Adjustment Dossier”). Within 10 working days from the date of receiving the complete adjustment dossier and issuing the Receipt slip, the Department of Planning and Investment will consider the validity of the Adjustment Dossier.
In case the Department of Planning and Investment notifies the investor in writing of the transfer the Adjustment Dossier to the Inspector of the Department of Planning and Investment (“Inspector of the Department”) for detecting signs of violations that investor fails to contribute in full and on time the registered capital as prescribed, based on Clause 2 Article 26 of Decree No. 118/2015/ND-CP dated November 12th, 2015 Detailing and guiding the implementation of a number of articles of the Investment Law; at that time, it is highly likely that the Investor will be granted an adjusted IRC after fulfilling the obligation to pay the administrative penalty.
Stage 2: Work with the Inspector of the Department and implement the Decision on sanctioning administrative violations
After the Adjusment Dossier has been transferred by the Foreign Economic Affairs Department (under the Department of Planning and Investment) to the Inspector of the Department, the Inspector of the Department will review the dossier and notify the meeting schedule on the adjustment of IRC to the investor. At the working meeting, the Inspector of the Department will consider signs of violations on the investor’s capital contribution progress.
In case the Inspector of the Department issues a Decision on sanctioning an administrative violation “Failing to implement investment activities under the contents of the Investment Registration Certificate” specified at Point a Clause 5 Article 13 of the Decree No. 50/2016/ND-CP dated June 1st, 2016 Regulations on the sanctioning of investors for administrative violations in the field of planning and investment, investors will be responsible for implementing this Decision on sanctioning.
Stage 3: Receive the Adjusted IRC
Please note that: Investors can implement the procedure for Adjustment of IRC during or beyond the time limit for capital contribution. However, not all investors are granted an adjusted IRC. The issuance of an adjusted IRC depends on the investor’s presentation, persuasion and negotiation skills at the working meeting and on the view of each case, dossier of the competent state agencies. Therefore, investors should still consider carefully and ensure the ability to contribute capital on time according to the issued IRC.
In summary, depending on the specific case and needs, investors can choose to implement the procedure for Extending the investment progress or the procedure for Adjusting the IRC to ensure that the actual capital contribution progress is consistent with the contents of capital contribution progress shown in the IRC. Clearly identifying the situation of late capital contribution and the investor’s need to extend the time limit of capital contribution helps investors easily make the right choice, thereby saving investors’ time and costs, ensure the implementation of the project in accordance with the regulations of the law.
Above are legal views on investors do not implement project under contents in IRC and legal solutions. Hopefully, this article is useful for your work.
Best regards.
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TNTP & Associates International Law Firm
Email: ha.nguyen@tntplaw.com
