In order to facilitate flexibility in investment activities, Vietnamese law allows investors to have the right to transfer part or the whole of their projects to other investors. The Investment Law 2020 stipulates the following conditions to be met when transferring an investment project:

Firstly, the investment project or part of the transferred investment project must not be terminated according to the provisions of Clauses 1 and 2, Article 48 of the Law on Investment 2020.

Specifically, an investment project or part of an investment project transferred does not fall into one of the following cases of termination:

• An investor shall terminate investment activities or investment projects in the following cases:

• • The investor decides to terminate the operation of the investment project;
  • According to the termination conditions specified in the contract, the enterprise’s charter;
  • The operation term of the investment project expires.

• The investment registration agency shall terminate or partially terminate the operation of an investment project in the following cases:

• • The investment project falls into one of the cases of cessation of operation specified in Clauses 2 and 3, Article 47 of the Law on Investment 2020 and the investor is unable to overcome the conditions for cessation of operation;
  • Investors are not allowed to continue using the investment location and do not carry out the procedures for adjusting the investment location within 06 months from the date of not being allowed to continue using the investment location, except for the case specified in Clause 1 of this Article.
  • The investment project has ceased operation and within 12 months from the date of shutdown, the investment registration agency cannot contact the investor or the investor’s legal representative;
  • The investment project is subject to land recovery due to the failure to put the land to use or the delay in putting the land to use according to the provisions of the land law;
  • Investors do not deposit or do not guarantee the escrow obligation as prescribed by law for investment projects subject to investment project implementation security;
  • Investors conduct investment activities on the basis of fake civil transactions according to the provisions of civil law;
  • According to the judgment, the decision of the Court, arbitral award.

Second, foreign investors who receive an investment project transfer, part of an investment project must satisfy the conditions specified in Clause 2, Article 24 of the Law on Investment 2020.

Specifically, when a foreign investor receives an investment project transfer, a part of an investment project must satisfy the conditions on which the foreign investor contributes capital, buys shares or purchases capital contribution from economic organizations such as: 

• Market access conditions for foreign investors are specified in Article 9 of the Investment Law 2020. These include: Foreign investors’ charter capital ownership ratio in economic organizations; Investment form; Scope of investment activities; Investor’s capacity; partners participating in investment activities; Other conditions as prescribed in laws, resolutions of the National Assembly, ordinances and resolutions of the National Assembly Standing Committee, decrees of the Government and international treaties to which the Socialist Republic of Vietnam is a signatory member;
• Ensuring national defense and security in accordance with the provisions of the Investment Law 2020;
• Regulations of the land law on conditions for receiving land use rights, conditions for land use in islands, communes, wards, border towns, communes, wards and coastal townships.

Thus, the new Law on Investment has completed and supplemented necessary tools to improve the effectiveness and efficiency of state management of investment, ensuring national security and defense in the direction of considering security conditions, national defense in case foreign investors receive investment projects in islands, communes, wards, border townships, coastal towns or sensitive areas in terms of security and defense.

Third, the conditions prescribed by the law on land in the case of transfer of investment projects are associated with the transfer of land use rights and land-attached assets.

This provision of the Investment Law 2020 inherits the provisions of the Law on Investment 2014 but has also been adjusted. Previously, the Investment Law 2014 only mentioned the case of transfer of investment projects associated with the transfer of land use rights, but now it has expanded the scope to include cases of transfer of investment projects associated with the transfer of land use rights. “assets attached to land”. All these transfers must comply with the conditions prescribed by the law on land, specifically:

• Have a certificate of land use right;
• Undisputed land;
• The land use right is not distrained to secure judgment enforcement;
• During the land use period;
• The project must complete the construction of corresponding technical infrastructure works according to the schedule stated in the approved project;
• The investor must fulfill the financial obligations related to the project’s land, including land use levy and land rent; taxes, fees and charges related to land (if any);
• The recipient of the transfer of land use rights associated with the transfer of part or the whole of the housing construction and business investment project must have an appropriate business line and must satisfy the conditions specified in Article 58 of this Law. Land 2013, Articles 13 and 14 of Decree 43/2014/ND-CP.

Fourth, the conditions prescribed by the law on housing and the law on real estate business in the country case of transfer of housing construction investment projects, real estate projects.

This is also considered a new point in the Investment Law 2020 when separating the conditions on the transfer of housing construction investment projects and real estate projects into a separate, specific and clear condition. This transfer must comply with the law on housing and the law on real estate business. Such regulation is very necessary because it can be seen that the current trend of project transfer is largely the transfer of real estate projects.

The Law on Real Estate Business stipulates in detail not only the principle of project transfer, the conditions for the transferred real estate project but also the conditions of the transferor and transferee, the authority allowing project transfer, even the provisions of the project transfer contract. As follows:

• The transfer of the whole or part of a real estate project must satisfy the following requirements:

• • Does not change the goal of the project;
  • Do not change the content of the project;
  • Ensure the interests of customers and related parties.

• Real estate projects to be transferred must meet the following conditions:

• • The project has been approved by a competent state agency, has a detailed 1/500 plan or approved master plan;
  • The transferred project or part of the project has completed the compensation and ground clearance. In case of transferring the entire infrastructure construction investment project, the corresponding technical infrastructure works must be completed according to the schedule stated in the approved project;
  • The project has no dispute over land use rights, is not distrained to secure judgment enforcement or to comply with administrative decisions of competent state agencies;
  • There is no decision on the project or land recovery issued by a competent state agency; In case there is a violation during the project implementation, the investor must complete the sanctioning decision.

• The transferor has obtained a certificate of land use right for the whole or part of the transferred project.
• The investor who receives the transfer of the whole or part of a real estate project must be a real estate business enterprise, have sufficient financial capacity and commit to continue the implementation of construction investment and business in accordance with the law. provisions of the law, ensuring the progress and content of the project.

Fifth, the conditions specified in the written approval of investment policies, the investment registration certificate or other relevant laws (if any).

• Similar to the provisions of the Investment Law 2014 but the Law on Investment 2020 has listed more documents approving the investment policy, overcoming shortcomings in the provisions of the Law on Investment 2014.

Sixth, when transferring investment projects, in addition to complying with the provisions of this Article, state enterprises are responsible for complying with the provisions of law on management and use of state capital invested in products. production and business at the enterprise before adjusting the investment project.

This is one of the new regulations on the transfer of investment projects in the Investment Law 2020 that state-owned enterprises need to pay attention to. The Law on Management and Use of State Capital for Investment in Production and Business in Enterprises 2014 took effect from July 1, 2015, until now, detailing responsibilities for the management and use of state capital. investment in production and business.

If you need more detailed advice and answers as well as how to access this service, please contact directly the Deputy Director of Sales: Lawyer Nhat Nam via hotline: 0912.35.65.75, 0912.35.53.53 or call the toll free legal consultation hotline 1900.6575 or send a service request via email: lienheluathongbang@gmail.com

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