Procedure for transferring investment project

When the Investors’ business plan and strategy changes, it may be that the Investors want to change the investment divertion or withdraw from the market, or just divide the risk, the Investors will transfer Investment project. However, the transfer of the Investment project is not just a business operation or a financial issue, but it needs to carry out legal procedures in accordance with the law.

So, what are the conditions for the Investors to transfer the project? What documents do the Investors need to prepare and carry out in order to transfer the Project?

In the article below, CIS Law Firm will provide detailed instructions on the Procedure for transferring Investment project.

1. What is an investment project?

There are many definitions of investment project. Depending on criteria such as: investment form; from a management perspective; from a planning perspective; in terms of content, etc., for which people have different definitions. But in general, investment project is a whole, a set of related tasks and activities, to be carried out in a definite time, with financial resources planned to achieve specified goals have been established.

An investment project from a legal perspective is defined as follows: An investment project is a set of proposals to invest medium-term or long-term capital to conduct investment and business activities in a specific area, within a specific period of time. (Clause 4, Article 3 of the Law on Investment).

2. What is investment project transfer?

Transfer of Investment Project means the transfer of all or part of the Investment Project by the Investors to other Investors when the conditions prescribed by law are satisfied.

3. Conditions for transferring investment project in Vietnam

In accordance with current Vietnamese law, the Investors have the right to transfer all or part of the Investment Project to other investors when the following conditions are satisfied:

Firstly: The transferred Investment project or part of the transferred Investment project is not terminated according to the provisions of Clauses 1 and 2, Article 48 of the Law on Investment 2020;

Secondly: Foreign investors receiving transfer of the investment project or part of the investment project must satisfy the conditions for capital contribution, share purchase as prescribed in Clause 2, Article 24 of the Law on Investment 2020;

Thirdly: Conditions prescribed by the law on land in case of transfer of investment project associated with the transfer of land use rights and assets attached to land;

Fourthly: Conditions as prescribed by the law on housing and the law on real estate business in case of transfer of housing construction investment projects or real estate projects;

Fifthly: Conditions specified in the written approval of investment policies, Investment Registration Certificate or other relevant laws (if any);

Sixthly: When transferring the investment project, 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 production and business at the enterprises before making adjustments to the investment project.

4. Procedures for transferring investment project

4.1. For real estate business projects:

• If the Investors are approved according to the provisions of Clause 3 or 4, Article 29 of the Law on Investment or are granted the Investment Registration Certificate, they shall carry out the procedures for adjusting the investment project upon project transfer and comply with the principles, conditions, rights and obligations of the transferor and transferee in accordance with the law on real estate business.
• For real estate projects not falling into the above cases, the authority, procedures, conditions and dossiers for permission to transfer part or the whole real estate business project must comply with the provisions of law on real estate business.

4.2. For the Investment projects that have been approved for investment policy concurrently with approval of the Investors where the Investors transfer the entire Investment project before the exploitation of the project or there are changes in conditions for with the Investors:

• The Investors transferring the project shall submit 08 sets of dossiers according to the guidance in Section 5 to the Ministry of Planning and Investment or submit 04 sets of dossiers to the Investment Registration Agencies corresponding to the competence to approve the investment project policy;
• The agencies having competence of approval will consider the conditions for transferring the investment project to decide on the adjustment of the Investment project. Decision on approval of adjustment the Investors shall record the Transferring Investor and the Transferee Investor, the part of the transferred project (if any) and shall be sent to the Investment Registration Agencies, thr Transferring Investor and the Transferee Investor.

4.3. For the Investment projects that have been approved for investment policy and have been put into operation:

In this case, the Investors are not required to carry out the procedures for approving the adjustment of the investment policy when transferring the project.

4.4. For the Investment projects that have been approved for investment policy and the transfer of the project changes the content of the approval of the investment policy in one of the following cases:

• Change the objectives specified in the investment policy approval document; add objectives subject to approval of investment policy;
• Change the scale of the used land for more than 10% or more than 30 hectares, change the investment location;
• Change the total investment capital from 20% or more, causing change in the scale of the investment project;
• Extend the implementation schedule of the investment project where the total project investment term exceeds 12 months compared with the progress of the investment project specified in the initial approval document of investment policy;
• Adjust the operation term of the investment project;
• Change the technology that has been appraised and consulted in the process of approving the investment policy;

In this case, the Transferring Investor shall carry out the procedure of adjustment of the project as guided in Section 4.2 above.

4.5. For the investment projects that have been approved for investment policy but the transfer of the project does not change the content of the approval of the investment policy:

The Investors transferring the project are not required to carry out the procedures for approving the adjustment of the investment policy, but the procedure for adjusting the decision on approval of the investors in the following order:

• The Investors transferring the project shall submit 04 sets of documents as guided in Section 5 below to the Investment Registration Agencies, in which the written request for adjustment of the investment project shall be replaced by the written request for approval investors adjustment (Download);
• Within 03 working days from the date of receipt of valid dossiers, the Investment Registration Agencies shall send the dossiers to the relevant competent state agencies at the same level for opinions;
• Within 15 days from the date of receipt of valid dossiers, the agencies that are consulted shall give their opinions on the contents within the scope of their state management and send them to the Investment Registration Agencies;
• Within 25 days from the date of receipt of valid dossiers, the Investment Registration Agencies shall make an appraisal report and submit it to the People’s Committee of the province;
• Within 07 working days from the date of receipt of the application and appraisal report, the People’s Committee of the province shall decide to approve the adjustment of the investors;
• Decision on approval of adjustment of the Investors shall record the Transferring Investor and the Transferee Investor, the part of the transferred project (if any) and shall be sent to the Investment Registration Authority, the Transferring Investor and the Transferee Investor.

4.6. For the investment projects that have been granted the investment registration certificate and are not subject to approval of investment policy or have been approved for investment policy but are not required to carry out the procedures for approval for adjustment of investment policy:

Investors carry out the procedures for project transfer as follows:

• The Investors transferring the Investment project shall submit 01 set of documents as guided in Section 5 to the Investment Registration Agencies;
• The Investment Registration Agencies consider the conditions for transferring the investment project to adjust the Investment project.

4.7. In case  the foreign investors receive the investment project transfer and establish economic organizations to implement the investment project:

• Investors transferring investment projects shall carry out procedures for adjustment of investment projects according to the respective instructions in Sections 4.2, 4.4, 4.5, 4.6 above;
• After completing the above procedures, the foreign investors receiving the project transfer shall carry out the procedures for establishing economic organizations according to the provisions of the law on enterprises corresponding to each type of economic organization.

5. Application for transferring investment project

According to current regulations, the investment project transfer dossier includes the following documents:

• Written request for adjustment of investment project;
• Report on the implementation of the investment project up to the time of transfer of the investment project;
• Contract or principle contract on the transfer of part or the whole of the investment project;
• Copy of the document on the legal status of the Transferring Investor and the Transferee Investor: Copy of the Passport of the Investor being an individual; Copy of the Certificate of Business Registration, Certificate of Establishment of the Investor being an organization;
• Copy of Investment Registration Certificate; Decision approving the investment policy; approval decision of Investors (if any);
• Copy of BCC Contract (for investment projects in the form of BCC Contract);
• Copy of one of the following documents of the Transferee Investor: the financial statement of the last 2 years or equity audit report of the investor, commitment to financial support of the the parent company, commitment to financial support of the financial institution, the guarantee of the investor’s financial capacity, the document explaining the investor’s financial capacity.

6. Service of procedure for transferring investment project by CIS Law Firm.

With a wealth of experience in the field of investment consulting, CIS Law Firm has supported many foreign investors from many different countries to invest successfully in Vietnam.

CIS Law Firm will assist clients in the following tasks:

• Consulting on conditions, dossiers and procedures for applying for an investment license, adjustment, change, extension of investment license, capital contribution or share purchase; establishment of a representative office/branch of a foreign company;
• Complete and quick drafting of documents;
• Representing investors to carry out procedures at competent state agencies;
• Monitoring the processing of dossiers by competent state agencies, explaining to state agencies on issues related to dossiers;
• Guiding investors to carry out legal procedures arising after carrying out the procedures;
• Consulting, carrying out procedures for applying for and adjusting relevant sub-licenses;
• Supporting for legal issues arising in the course of business activities for investors.

Above is the detailed guide on procedures of investment project transfer. If you have any problems in the process of transferring the investment project, or you have any unclear content or need legal assistance, please immediately contact a lawyer of CIS Law Firm with the following information:

ENTERPRISE LEGAL DEPARTMENT – CIS LAW FIRM

109 Hoang Sa, Da Kao Ward, District 1, Ho Chi Minh City
Phone: 028 3911 8580 – 3911 8581                     Hotline: 0916 568 101
Email: info@cis.vn