An investor can terminate an offshore investment project for many different reasons. The question is, under what circumstances is an investor entitled to terminate an offshore investment project and what are the relevant orders and procedures when terminating an investment abroad? 

Legal basis

• Vietnam Investment law 2020.
• Decree No. 31/2021/NĐ-CP regarding the elaboration of some articles of the law on investment.

Cases in which the investor is entitled to terminate the offshore investment project

The outward investment registration certificate shall be invalidated in the following cases:

• The investor decides to terminate the investment project;
• The investment project duration is over in accordance with regulations of law of the host country;
• The investment project has to be terminated according to the conditions set out in the contract or charter of the enterprise;
• The investor transfers all outward investment capital to a foreign investor;
• The investor fails to execute or is unable to execute the investment project in line with the schedule registered with the regulatory agency within 24 months from the date of issuance of the outward investment registration certificate and fails to follow the procedures for adjusting the execution schedule of the investment project;
• The foreign business organization is dissolved or goes bankrupt in accordance with the law of the host country;
• Pursuant to a judgment or decision of a court or an arbitral award;

The investor shall follow the procedures for termination of the outward investment project in accordance with the law of the host country and the procedures for invalidation of the outward investment registration certificate.

The dossiers

• A written request for termination of the validity of the Certificate of outward investment registration made according to the form of the Ministry of Planning and Investment;
• The original of the offshore investment registration certificate;
• Decision on termination of investment projects abroad according to the competence;
• Documents proving that the investor has completed the liquidation of the project (original or can be a valid copy).

Procedures 

Step 1: Liquidate the investment project

Immediately after the completion of investment activities, the investor must liquidate the investment project in accordance with the provisions of the law of the host country or territory.

Within 6 months from the date of the tax finalization report or document of equivalent legal validity as prescribed by the laws of the country or territory receiving the investment related to the completion of payment. In order to manage an investment project, the investor must repatriate all revenues from the liquidation of the investment project.

If there is a need to extend the time limit specified in Clause 2 of this Article, at least 15 days before the expiration date, the investor must make a written request and clearly state the reason to send it to the Ministry of Planning and Investment for consideration and decision. The extension is done no more than once and not more than 06 months. Within 15 days after receiving the investor’s written request, the Ministry of Planning and Investment shall send a written reply to the investor about the extension of the time limit for repatriation of all revenues from the payment. investment project management.

Within 60 days from the date of completing the liquidation of the investment project abroad and repatriating all the proceeds from the liquidation of the investment project (if any), the investor shall carry out procedures for invalidation of the certificate of outward investment registration according to the provisions of Article 87 of Decree No. 31/2021/NĐ-CP

Step 2: Submit an application for termination of the validity of the offshore investment registration certificate

After receiving the investor’s dossier, the Ministry of Planning and Investment checks the validity of the dossier. 

The Ministry of Planning and Investment shall inspect the validity of the application. If the application is invalid or has to be clarified, the Ministry of Planning and Investment shall request the investor in writing to complete it.

The Ministry of Planning and Investment shall send a written request for opinions to the State Bank of Vietnam about the investor’s foreign exchange transactions; compliance with regulations of law on foreign exchange by the investor, violations and imposition of penalties therefore within its power (if any);

Within 15 days from the receipt of the valid application, the Ministry of Planning and Investment shall issue an invalidation decision and revoke the outward investment registration certificate and send a copy of the decision to the State Bank of Vietnam, Ministry of Finance, Ministry of Foreign Affairs, Ministry of Labor, War Invalids and Social Affairs, relevant ministry, People’s Committee of the central-affiliated city or province where investor’s headquarters is located or investor’s permanent residence is registered, tax authority certifying the investor’s fulfillment of the tax payment obligation and investor’s state ownership representative agency (if any).

Services provided by Hong Bang Law

Hong Bang Law is a company with 10 years of experience in consulting in the field of foreign investment. We have supported many foreign investors to set up companies and accompany them throughout the implementation of investment projects in Vietnam.

Hong Bang Law will accompany customers in the whole process of carrying out procedures for terminating offshore investment projects with consulting and supporting services such as:

• Advising customers on conditions, documents and procedures for terminating offshore investment projects;
• Drafting legal documents according to the provisions of law and information provided by customers;
• The authorized representative of the client to carry out the procedures at the competent state agencies;
• Monitor the processing of dossiers by competent state agencies, explain to state agencies on issues related to dossiers;
• Guide enterprises to carry out legal procedures arising after the termination of investment projects.

If you need more detailed advice and answers as well as how to access this service, please contact directly our 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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