Latest procedure for transferring part of the investment project

During the implementation of an investment project, for many objective or subjective reasons, the Investors may change the strategy and business plan. At that time, the Investors may wish to transfer their investment project. The form of transfer can be the transfer of part or the whole project. However, regardless of the form of tranfer, the tranfer operation must also meet the conditions and procedures prescribed by law.

In the article below, CIS Law Firm will provide detailed instructions on the procedure for transferring part of an investment project.

1. Legal grounds?

Conditions, order, procedures, dossier composition and other regulations related to procedures for transferring part of an investment project are specified in the following legal documents:

– Investment Law No. 61/2020/QH14 promulgated by the National Assembly taking effect from January 1, 2021.

– Decree 31/2021/ND-CP of the Government detailing and guiding the implementation of a number of articles of the Investment Law, effective from March 26, 2021

2. What is an investment project?

The Law on Investment 2020 defines the concept of “Investment project” as a set of proposals to invest medium-term or long-term capital to conduct business investment activities in a specific area, within a defined period of time.

To put it simply, an investment project is a collection of information, data, activities, etc. to implement a plan and strategy that was previously established by the Investors. The ultimate purpose of these activities is to bring investors’ initiatives and ideas into reality. At the same time, investment project is the basis for competent state agencies to take measures to manage and control investment licensing.

3. What is investment project transfer?

Investment project transfer is the process by which the investors transfer all or part of their project to other investors through an investment project transfer contract. The initial investors will stop part or all of the activities related to the transferred project.

4. Types of investment project transfer

According to the Investment Law 2020, there are 02 forms of investment project transfer as follows:

• Transfer of the entire project; or
• Transfer of a part of the project.

5. What is transferring part of investment project?

Transferring part of an investment project is understood as the investors stop the investment, business, and exploitation of a part of their project and transfer that part of the project to another investor. The rest of the project is still invested, exploited and used by investors.

6. Conditions for transferring part of investment project.

Not all investment projects can be transferred, but only projects that meet 06 conditions under the Law on Investment 2020, investors are allowed to transfer part of investment projects. Specifically:

– Firstly, the part of the transferred investment project must not be terminated.

The part of the investment project is considered to be terminated when:

♦ The Investors terminate investment activities or investment projects in the following cases:

+ The investors decide to terminate the operation of the investment project;

+ According to the conditions for termination of operation specified in the contract, the enterprise’s charter;

+ Expiry of the operation term of the investment project.

♦ The investment registration agency the entire of part of the operation of an investment project in the following cases:

+ The investment project falls into one of the cases specified in Clauses 2 and 3, Article 47 of the Law on Investment and the investors are unable to overcome the conditions for cessation of operation;

+ The investors are not allowed to continue using the investment location and fail to carry out the procedures for adjusting the investment location within 06 months from the date on which they are not allowed to continue using the investment location;

+ The investment project has ceased operation and within 12 months from the date of shutdown, the investment registration agency cannot contact the investors or the investors’ 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 into 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 court judgments, decisions, arbitral awards.

– Secondly, foreign investors receiving part of the investment project must satisfy the conditions prescribed by the Law on Investment:

The capital contribution, share purchase or contributed capital purchase from an economic organization of the Investors must satisfy the following regulations and conditions:

+ Conditions for market access for foreign investors specified in Article 9 of the Investment Law 2020;

+ Ensuring national defense and security in accordance with the Investment Law 2020;

+ Regulations of land law on conditions for receiving land use rights, conditions for using land in islands, communes, wards, border towns, coastal communes, wards and townships.

– Thirdly, meet the conditions prescribed by the law on land in case of transfer of part of the investment project associated with the transfer of land use rights and assets attached to land.

– Fourthly, meet the conditions prescribed by the law on housing and the law on real estate business in case of transferring part of a housing construction investment project or a real estate project.

– Fifthly, satisfy the conditions specified in the written approval of the investment policy, the investment registration certificate or as prescribed by other relevant laws (if any).

– Sixthly, when transferring a part of an investment project, in addition to fulfilling the above conditions, the state enterprise is responsible for complying with the provisions of law on management and use of state capital invested in the production and business at the enterprise before making adjustments to investment projects.

7. Procedures for transferring part of investment project.

Procedures for transferring part of the investment project are divided into the following specific cases:

7.1 For projects with approval of investment policy:

A./ For the investment project that has been approved for investment policy (unless it has been put into operation and operation), the transfer of the project changes the content of the approval of the investment policy in one of the following cases, the transferring Investor shall carry out the procedures for approving the adjustment of investment policy:

a) Change the objectives specified in the written approval of investment policy; supplement objectives subject to approval of investment policy;

b) Change in the size of the land used for more than 10% or more than 30 hectares, change the investment location;

c) The total investment capital is changed by 20% or more, resulting in a change in the scale of the investment project;

d) Prolong the implementation schedule of the investment project while the total project investment term exceeds 12 months compared with the progress of the investment project specified in the written approval of the initial investment policy;

e) Adjust the operation term of the investment project;

f) Change the technology that has been appraised and consulted in the process of approving the investment policy;

Accordingly, the investor transferring the project shall submit 08 sets of dossiers in Section 8 to the Ministry of Planning and Investment or submit 04 sets of dossiers to the Investment Registration Authority corresponding to the competence to approve the project investment policy. As a result, the decision to approve the adjustment of the investors shall record the transferring investor and the transferee investor, the part of the transferred project (if any) and is sent to the Investment Registration Authority, the transferring investor and the transferee investor.

B./ For the investment project that has been approved for investment policy but the transfer of the project does not change the content of the approval of the investment policy in one of the cases mentioned in Section A, the transferor is not required to carry out the procedures for approving the adjustment of investment policy, but the procedures for adjusting the decision on approval of the investor. Accordingly, the transferring investor shall submit 04 sets of dossiers as prescribed in Section 8 to the Investment Registration Authority, in which the written request for adjustment of the investment project shall be replaced by the written request for approval of investor adjustment. The result is similar to Section A, which is the Decision approving the adjustment of the investor, recognizing the transferor and the transferee, the part of the transferred project (if any).

C./ For a project that has been approved for investment policy but does not fall into the case specified in Clause 3, Article 41 of the Law on Investment, the investor transferring the investment project shall submit 01 set of documents in Section 8 to the investment registration agency. As a result, the Adjusted Investment Registration Certificate is sent to the transferring investor and the transferee investor.

7.2 For investment project that has been granted investment registration certificate and is not subject to approval of investment policy:

Investors carry out the procedures for project adjustment similar to section 7.1.C.

7.3 In case the foreign investor receives the investment project transfer and establishes an economic organization to implement the investment project:

The investor transferring the investment project shall carry out the procedures for adjusting the investment project according to the corresponding regulations in the above cases. After completing the prescribed procedures, the foreign investor receiving the project transfer shall carry out the procedures for establishing an economic organization according to the provisions of the law on enterprises corresponding to each type of economic organization.

7.4 For investment project not fall into the above cases:

The transfer of a part of an investment project or the transfer of property ownership to the investor receiving the investment project after the transfer must comply with the law on civil, corporate and real estate business and other relevant provisions of law.

8. Application for transferring part of investment project.

To transferring part of the investment project, the investorx must prepare a set of documents including the following components:

–  A written request for adjustment of the investment project;

– Report on the implementation of the investment project from the time of project implementation to the time of investment project transfer;

–  Contract or MOU on the transfer of part of the investment project;

–  Documents on the legal status of the transferring investor and transferee investor such as: Identity card/Citizen ID/Passport for individual investors; Certificate of Business Registration/ Certificate of Establishment/ Establishment Decision for institutional investors;

–  Investment registration certificate; Decision approving the investment policy; Decision on investor approval (if any);

–  Business cooperation contract (for investment projects in the form of business cooperation contract);

– One of the following documents of the investor receiving the investment project: the financial statement of the last 2 years or the investor’s equity audit report, the company’s commitment to financial support parent, commitment to financial support of financial institutions, guarantee of investor’s financial capacity, document explaining investor’s financial capacity.

Note: For documents issued by foreign agencies, organizations must be consular legalized.

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

CIS Law Firm has made a lot of documents to transfer part of investment projects in provinces/cities, with our rich experience, we will advise the best plan to help enterprises solve problems and implement procedures as quickly as possible.

Above are detailed instructions on the latest procedure for transferring part of the investment project. If you have any problems in the process of carrying out the procedure for transferring part of the investment project or you have any unclear content or need legal assistance, please immediately contact a lawyer of CIS Law Firm according to the information below. after:

ENTERPRISE LEGAL DEPARTMENT – CIS LAW FIRM

109 Hoang Sa, Da Kao Ward, District 1, City. Ho Chi Minh

Phone: 028.3911.8581 – 3911.8582 Hotline: 0916.568.101

Email: info@cis.vn