The Ministry of Planning and Investment (MPI) issued Official Letter 5122 on 24 July 2015 (OL 5122) to provide further temporary guidance for the implementation of Investment Law 2014. In particular,  

• An application for an Investment Certificate submitted before 1 July 2015 satisfying conditions under the old investment regulations (i.e. Decree 108/2006) will be issued an Investment Registration Certificate provided that the investor must accept this approach in writing. For greenfield investment projects of foreign investors involving new project companies, even with a written acceptance by the investors, it is not clear how an Investment Registration Certificate issued to an application submitted before 1 July 2015 could currently serve as the Enterprise Registration Certificate of these new project companies. So while this guideline may save the foreign investors some licensing time, it may cause more legal difficulties for the relevant companies in the long run.

• An application for an Investment Certificate submitted before 1 July 2015 not satisfying conditions under Decree 108/2006 will need to be resubmitted in accordance with the Investment Law 2014. This would mean that for green field investment projects of foreign investors involving new project companies submitted before 1 July 2005 which fail to satisfy Decree 108/2006, the foreign investors now must be subject to two separate procedures, i.e. investment registration in accordance with Investment Law 2014 and enterprise registration procedures in accordance with Enterprise Law 2014.

• OL 5122 has a clear set of instructions for provincial Department of Planning and Investment (Provincial DPIs) when reviewing an investment project involving foreign investors. If there is a clear market access commitment in the WTO Commitments of Vietnam or in other Bilateral Investment Treaties for a specific service sector, then the Provincial DPIs could issue the Investment Registration Certificate without consulting with other Ministries in Hanoi. For service sectors for which Vietnam gives an “Unbound” commitment or which is not included in Vietnam’s WTO Commitments, Provincial DPIs are required to obtain opinions from relevant Ministries. The practice under Investment Law 2005 is that any application for foreign investment in service sectors will be subject to a lengthy consultation process with various Ministries even if there is a clear market access commitment in the WTO Commitments of Vietnam or in other Bilateral Investment Treaties.

• OL 5122 clearly confirmed that a foreign invested enterprise could establish new branches or register for new business lines without having to propose an investment project associated with such branch or new business lines. However, it is not clear when a foreign invested enterprise actually implements a business line then whether an investment project is required.

• OL 5122 prohibits Provincial DPIs from requiring a valuation certificate for non-cash capital contribution.

• Under OL 5122, investors may apply for amending or replacement of the current Investment License or Investment Certificate which concurrently serves as the business registration certificate under the old regulation. In particular,

• Procedures for amending business registration content (Enterprise Registration) in the Investment License or Investment Certificate will follow Enterprise Law 2014. Procedures for amending its investment projects’ content (Investment Registration) will follow the Investment Law 2014;
  • Procedures for amending Enterprise Registration as a result of acquisition by Foreign Investors will firstly follow the acquisition registration procedures under Investment Law 2014 and then Enterprise Registration under the Enterprise Law 2014; and
  • Procedures for amending both Enterprise Registration and Investment Registration, or applying for replacement of the Investment License or the Investment Certificate by Investment Registration Certificate and Enterprise Registration Certificate separately will follow both Investment Law 2014 and Enterprise Law 2014.

This post is contributed by Nguyen Bich Ngoc, an Associate of VILAF.