Special investment procedures for encouraged sectors
On November 29, 2024, the National Assembly promulgated Law No. 57/2024/QH15, amending and supplementing several provisions of the Law on Planning, the Law on Investment, the Law on Public-Private Partnership Investment, and the Law on Bidding. Notably, a new provision on special investment procedures was introduced to the Law on Investment 2020. Accordingly, the National Assembly authorized the Government to stipulate special investment procedures for investors implementing projects in prioritized development sectors during specific periods.
To ensure the prompt implementation of regulations on special investment procedures and attract investments, the Government has urgently sought public feedback on the Draft Decree detailing the Law on Investment’s provisions regarding special investment procedures (“Draft“). The Draft provides detailed guidance on special investment procedures, with several notable key points outlined below.
Conditions for Applying Special Investment Procedures
Investors may opt for registration under special investment procedures if their projects meet criteria related to investment location and sector.
Regarding investment location requirements, projects eligible for special investment procedures must be implemented in industrial zones, export processing zones, high-tech parks, concentrated information technology zones, free trade zones, or functional areas within economic zones.
Regarding investment sector requirements, projects must fall within the following sectors: Construction of innovation centers or research and development (R&D) centers; Investment in semiconductor integrated circuit industries, technology design, manufacturing of components, integrated electronic circuits (ICs), flexible electronics (PEs), chips, and semiconductor materials; High-tech sectors prioritized for investment and production of products listed as high-tech products encouraged for development under decisions issued by the Prime Minister.
Licensing procedures of investment projects under special investment procedures
Regarding the application for an Investment Registration Certificate under special investment procedures, in addition to the standard requirements for regular investment projects, the Draft Decree mandates two commitments from investors:
(i) Investors must commit that their projects satisfy all conditions, standards, and regulations under laws related to construction, environmental protection, and fire safety in their investment registration applications.
(ii) Investors must identify, forecast, and propose mitigation measures for adverse environmental impacts in
their project proposals.
Beside the two above commitments, investors under special investment procedures will not be required to prepare environmental impact assessment reports, obtain construction permits, or complete approvals related to fire safety.
Additionally, the Draft stipulates that for special investment procedure projects where an investor proposes a project similar to another project they have previously implemented in Vietnam or abroad, the investor may opt to submit approved documents from the previously implemented project in place of a new project proposal.
As a result, implementing investment projects under the special investment procedures proposed in the Draft is expected to significantly reduce the time and costs for investors.
Requirement for deposit or credit institution guarantee for deposit obligations
The Draft requires investors to deposit a guarantee or provide a bank guarantee from a financial institution for their deposit obligations after receiving the Investment Registration Certificate.
The deposit or guarantee may be used to remediate violations of the above commitments. Additionally, investors failing to meet their commitments will face administrative penalties, suspension, termination of investment activities, and other legal sanctions.
Overall, the proposals in the Draft aim to concretize the provisions on special investment procedures recently added to the Law on Investment. This represents a significant step forward in creating favorable mechanisms for strategic investment projects with substantial economic and social impacts. It also underscores Vietnam’s strong commitment to improving the investment environment and attracting strategic capital for economic development.
If the Draft’s proposal are approved, investors operating in eligible sectors and meeting the conditions for special investment procedures will benefit from streamlined licensing processes, significantly reducing the time and costs associated with administrative procedures.
