With more than 10 years of experience, Hong Bang Law has accompanied many international investors in the process of conducting investment and business activities in Vietnam. Currently, many investors are interested in the procedures for terminating the operation of investment projects. In order for clients to understand the provisions of law related to the procedures for applying for termination of investment projects, we would like to share with you some detailed information about the procedure for terminating of operation of investment projects

Legal basis

• Law on Investment 2020;
• Decree 31/2021/ND-CP guidance on the Law on Investment

Cases of termination of operation of investment projects

An investor shall terminate their investment activities and/or investment project in the following cases:

• The investor decides to terminate the project;
• The project has to be terminated according to the conditions set out in the contract or charter of the enterprise;
• The project duration is over.

The investment registration authority shall terminate an investment project in part or in full in the following cases:

• The investor fails to overcome the difficulties that lead to project suspension in the cases mentioned in Clause 2 and Clause 3 Article 47 of Investment Law;
• The investor is no longer permitted to keep using the investment location and fails to complete the procedures for change of investment location within 06 months from the date on which the investor is no longer permitted to use the investment location, except for the case specified below;
• The investment registration authority cannot contact the investor or the investor’s legal representative after 12 months from the date of suspension of the project;
• Land reserved for the investment project is expropriated by the State for the reason that the land is not used or the land use is delayed in accordance with regulations of law on land;
• The investor fails to pay the deposit or obtain a bank guarantee as prescribed by law if project execution security is required;
• The investor conducted the investment activities on the basis of a sham civil transaction in accordance with the civil law;
• Pursuant to a judgment or decision of a court or an arbitral award;

Dossiers and procedures for termination of investment projects

Based on each specific case, the composition of the order, procedures and dossiers of termination of investment projects will be different:

• If the investor decides to terminate the investment project himself/herself/itself as prescribed in Point a Clause 1 Article 48 of the Law on Investment, such investor shall send the termination decision to the investment registration authority within 15 days from the date of making the decision together with the investment registration certificate (if any);
• If the investment project is terminated according to the conditions set out in the contract or enterprise’s charter or upon the expiration of the project’s duration as specified in Points b and c Clause 1 Article 48 of the Law on Investment, the investor shall notify and return the investment registration certificate (if any) to the investment registration authority within 15 days from the date of termination together with a copy of the document recording the termination. The investment registration authority shall notify the project termination to relevant authorities;
• If the investment project is terminated according to Clause 2 Article 48 of the Law on Investment, the investment registration authority shall decide to terminate the project and revoke the investment registration certificate in the case of the project issued with the investment registration certificate. The investment registration certificate shall be invalidated from the effective date of the decision on project termination.

Liquidation investment projects

After the investment project is terminated, the liquidation of the investment project is as follows:

• Investors liquidate investment projects by themselves in accordance with the law on asset liquidation;
• For investment projects assigned or leased land by the State, permitted to be re-used for land use purposes, land use rights and properties attached to land shall comply with the provisions of law on land;
• In the course of liquidation investment projects, if investors being economic organizations are dissolution or falling into bankruptcy, the liquidation of investment projects shall comply with the provisions of law on economic organization dissolution or bankruptcy.

Services provided by Hong Bang Law

When foreign investors first come to Vietnam, there will be many difficulties about the legal procedures and business methods. Understanding language barriers and other difficulties of foreign clients, our lawyers and legal assistants at Hong Bang Law Firm can use English and other common languages fluently when advising clients about the policies, legal procedures, regulations and investment environment in Vietnam. Moreover, the team of lawyers and consultants of Hong Bang Law are equipped with highly specialized knowledge of policies, legal regulations and investment environment in Vietnam.

Hong Bang Law will accompany clients throughout the process of terminating investment projects with consulting and supporting services such as:

• Advising customers on conditions, dossiers and procedures for terminating investment certificates;
• Drafting legal documents for enterprises according to the provisions of law and the information provided by the enterprise;
• The authorized representative of the client to carry out the procedures for terminating the investment projects at the competent state agencies;
• Monitoring the process of accepting dossiers by competent state agencies, explaining to state agencies on issues related to dossiers;
• Guiding enterprises to carry out legal procedures arising after terminating the investment certificate;
• Consulting on tax and accounting procedures for foreign investors.

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

Wishing you and your family good health, peace and success!

Best regards!