IN CASE AN INVESTMENT PROJECT EXPIRES BUT THE INVESTOR DOES NOT CARRY OUT PROCEDURES TO TERMINATE INVESTMENT ACTIVITIES, HOW WILL IT BE RESOLVED? WILL INVESTORS BE FINED?

IN CASE AN INVESTMENT PROJECT EXPIRES BUT THE INVESTOR DOES NOT CARRY OUT PROCEDURES TO TERMINATE INVESTMENT ACTIVITIES, HOW WILL IT BE RESOLVED? WILL INVESTORS BE FINED?

QUESTION

Dear TLK Law Firm, we hope to have your answer to the following questions: My company is an investor in a number of projects. Due to objective reasons, this leads to delays in implementing procedures for terminating the investment project's operations after the project's operating term has expired. We do not know how this case is regulated by law. So let me ask, when an investment project expires but the investor does not carry out the procedure to terminate investment activities, how should it be resolved? Will investors be fined? Looking forward to your company's answer. Thank you!

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Thank you for your trust and sending questions to TLK Law Firm. Based on legal regulations and practical solutions, we would like to send you the following consulting content:

LEGAL BASIS

1. Investment Law No. 61/2020/QH14 passed by the National Assembly on June 17, 2020;

2. Decree No. 31/2021/ND-CP issued by the Government on March 26, 2021 detailing and guiding the implementation of a number of articles of the Investment Law;

3. Decree No. 122/2021/ND-CP issued by the Government on December 28, 2021 regulating penalties for administrative violations in the field of planning and investment.

4. Other legal documents providing relevant guidance.

CONSULTATION CONTENT

Currently, investment projects have reached the deadline to terminate operations but the project's objectives have not been completed or for many reasons, investors delay or delay in the process of implementing termination procedures investment project activities. So what is the solution for not following this procedure when the investment project has expired? Will investors be punished? What does the law say about this case? TLK Law Firm will provide customers with accurate and complete answers through the article below.

Photo 1. In case an investment project expires but the investor does not carry out procedures to terminate investment activities, how will it be resolved? Will investors be fined?_Hotline: 0972118764

I. SOME IMPORTANT LEGAL ISSUES RELATED TO DISSOLUTION OF INVESTMENT PROJECTS

1. Operational term of the investment project

According to the provisions of the Investment Law 2020, the operating term of an investment project depends on the place where the investment project is implemented, specifically as follows:

(1) The operating term of an investment project in an economic zone must not exceed 70 years;

(2) The operating term of an investment project outside the economic zone must not exceed 50 years;

(3) Investment projects implemented in areas with difficult socio-economic conditions, areas with particularly difficult socio-economic conditions or investment projects with large investment capital but recovered If the capital is slow, the operating term of the investment project may be longer but not more than 70 years.

Thus, there are 02 operational deadlines of investment projects that need to be noted: (1) 50 years for investment projects in economic zones and (2) 70 years for investment projects outside the economic zones or located in areas with difficult socio-economic conditions, areas with particularly difficult socio-economic conditions or investment projects with large investment capital but slow capital recovery.

2. Cases of terminating investment project activities

Pursuant to the Investment Law 2020, some cases of investment project termination are prescribed as follows:

First, cases where investors terminate investment activities or investment projects:

(1) The investor decides to terminate the operation of the investment project;

(2) According to the conditions for termination of operations specified in the contract and charter of the enterprise;

(3) Expiration of the investment project's operating term.

Second, cases where the investment registration agency terminates or partially terminates the activities of an investment project:

(1) The investment project falls into one of the cases of shutdown according to the provisions of the Investment Law 2020 and the investor is unable to overcome the shutdown conditions;

(2) The investor is not allowed to continue using the investment location and does not carry out procedures to adjust the investment location within 06 months from the date of discontinuation of the investment location, except in the following cases: Investment projects subject to land recovery due to failure to put land into use or delay in putting land into use according to the provisions of land law;

(3) The investment project has stopped operating and after 12 months from the date of shutdown, the investment registration agency cannot contact the investor or the investor's legal representative;

(4) Investment projects subject to land recovery due to failure to put land into use or delay in putting land into use according to the provisions of land law;

(5) The investor does not deposit or does not have a guarantee for deposit obligations according to the provisions of law for investment projects subject to investment project implementation guarantee;

(6) Investors carry out investment activities on the basis of fake civil transactions according to the provisions of civil law;

(7) According to court judgments, decisions, and arbitration awards.

Above are the two most important cases of terminating investment project activities for most types of investment projects. In addition, in case the investment project is subject to investment policy approval, the investment registration agency terminates the operation of the investment project after obtaining the opinion of the investment policy approval agency.

3. Solution for cases where an investment project expires but the investor does not carry out procedures to terminate investment activities

According to the provisions of the Investment Law 2020, one of the cases in which an investor carries out procedures to terminate the operation of an investment project is when the investment project expires. However, in case the investment project expires and the investor does not carry out this procedure, there are a number of solutions as follows:

3.1. Extend the operating period of investment projects

According to the provisions of the Investment Law 2020 and Decree No. 31/2021/ND-CP, in case an investment project has expired but the investor still needs to continue implementing it, at the same time that project If certain conditions are met as prescribed by law, the investor can carry out procedures to extend the investment project. Some conditions that investment projects need to meet if they want to be extended are:

(1) In accordance with national planning, regional planning, provincial planning, urban planning and special administrative-economic unit planning (if any); consistent with urban development goals and orientations, housing development planning programs (for investment projects to build housing and urban areas);

(2) Meet the conditions for land allocation and land lease according to the provisions of land law (in case of request to extend land use);

(3) Does not fall into either of the two cases below:

- Investment projects using outdated technology, potentially causing environmental pollution and resource-intensive;

- Investment projects in cases where the investor must transfer assets without compensation to the Vietnamese State or Vietnamese party.

Note: For investment projects using land, procedures for extending the investment project's operation must be carried out at least 06 months before the expiration of the investment project's operating term.

3.2. The investment registration agency terminates the operation of the investment project

Pursuant to Decree No. 31/2021/ND-CP, in case an investment project has expired but more than 15 days from the date of termination of project operation, the investor does not carry out the procedures terminate the operation of the investment project or there is no need to extend the operation of this investment project, the investment registration agency shall decide to terminate the operation of the investment project.

Accordingly, the Investment Registration Authority issues a decision to terminate the operation of the investment project, and at the same time revoke the Investment Registration Certificate for investment projects that are granted Investment Registration Certificates. The investment registration certificate ceases to be effective from the effective date of the decision to terminate the operation of the investment project.

In particular, based on Decree No. 122/2021/ND-CP, in this case, investors will be sanctioned for administrative violations with fines ranging from 30,000,000 VND to 50,000,000 VND for their actions. Failure to notify or failure to send a decision to terminate investment project operations to the investment registration agency within 15 days from the date of termination of investment project operations in case the investment project expires action, and at the same time must take remedial measures such as forcing a notice or decision to terminate investment project activities to the investment registration agency.

Thus, before the investment project expires, if the investor does not carry out procedures to terminate the investment project's operation, the investor can choose to extend the operating period if there is still a need, but must meet some legal conditions; or otherwise, based on the investor's failure to carry out procedures for terminating the operation of the investment project, the Investment Registration Authority shall issue a decision to terminate the operation of the investment project, and at the same time revoke the operation of the investment project. Investment registration certificate for investment projects that are granted Investment Registration Certificate and at the same time the investor will be sanctioned for administrative violations.

=> See more: Ways of increasing investment capital? In what ways do investors contribute capital to Vietnam?

II. PROCEDURE FOR IMPLEMENTING PROCEDURES FOR TERMINATION OF INVESTMENT PROJECT ACTIVITIES IN CASE OF THE EXPIRATION OF THE OPERATIONAL TERM OF THE INVESTMENT PROJECT

1. Steps to carry out procedures for terminating investment project operations in case the investment project's operating term expires

Step 1: Investors prepare and send documents to the competent authority;

Step 2: The competent authority receives and checks the documents;

Step 3: The competent authority records the status of termination of operation of the investment project and notifies relevant agencies (if any);

Step 4: Receive results.

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2. Document components and procedures for resolving investment project termination procedures in case the investment project's operating term expires

A. Document components:

Documents for implementing procedures for terminating investment project operations in case the investment project's operating term expires include the following documents:

1. Notice of investors;

2. Investment registration certificate (if any);

3. Copy of documents recording the termination of investment project activities;

4. Power of attorney for the person submitting the application (in case of authorizing someone else to do so);

5. Certified copy of personal legal documents (ID card, citizen identification card, valid passport) of the person performing the procedure;

6. Other documents required by competent state agencies (if any).

Number of documents: 01 set.

B. Resolution agency

Department of Planning and investment.

C. How to do it

Submit applications directly, online or via postal service to the Department of Planning and Investment.

D. Implementation results

Decision to terminate investment project activities.

=> See more: The company provides services for establishing, adjusting and terminating professional investment projects

Photo 2. In case an investment project expires but the investor does not carry out procedures to terminate investment activities, how will it be resolved? Will investors be fined?_Hotline: 0972118764

III. SUMMARY OF THE ANSWER SECTION: IN CASE WHEN AN INVESTMENT PROJECT EXPIRES OPERATION PERIOD BUT THE INVESTOR DOES NOT PERFORM PROCEDURES FOR TERMINATION OF INVESTMENT ACTIVITIES, HOW IS IT RESOLVED? WILL INVESTORS BE PUNISHED?

Dear Customers, from the above synthesis and analysis, TLK Law Firm would like to give the following answer:

Pursuant to the provisions of the Investment Law 2020 and Decree No. 31/2021/ND-CP, in case the investment project expires but the investor does not carry out procedures to terminate investment activities the solution will be resolved. Decide in one of two ways:

1. In case the investor still wishes to continue implementing the investment project, he or she can apply for an extension of the investment project's operation. However, the extension is only approved if the investment project meets some requirements of the Investment Law 2020 and Decree No. 31/2021/ND-CP.

2. In case more than 15 days from the date the investment project terminates operations, the investor does not carry out the procedures to terminate the operation of the investment project, the Investment Registration Authority shall decide to terminate the operation of the investment projects, and at the same time revoke the Investment Registration Certificate for investment projects that are granted Investment Registration Certificates.

In this case, based on Decree No. 122/2021/ND-CP, investors will be subject to administrative penalties with fines ranging from 30,000,000 VND to 50,000,000 VND for uninformed behavior notify or fail to send the decision to terminate investment project activities to the investment registration agency within 15 days from the date of termination of investment project activities in case the investment project expires, At the same time, remedial measures must be taken, which is to force a notice or decision to terminate investment project operations to be sent to the investment registration agency.

IV. HOW SHOULD YOU BEST CHOOSE AN ORGANIZATION THAT PROVIDES LEGAL SERVICES?

An organization providing quality and reputable legal services should have the following criteria:

First: Must be an official legal organization with a legal operating license;

Second: It is better if the Board of Directors must be lawyers, experienced and have high degrees;

Third: Have a team of lawyers and a systematic, professional, and thoroughly trained human resources system;

Fourth: Friendly, dedicated and make every effort for the benefit of customers. Consider customer satisfaction and work quality as your own honor;

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Eighth: Have the ability to Connect - Promote commercial relationships for customers if customers have needs,...

Finding a comprehensive, professional and reputable legal consulting organization is what every customer wants. Because no one wants to risk losing both money and time while the results are not as expected. However, finding such an organization is not easy because the number of service providers in the Vietnamese market today is very large with varying quality.

A suggestion for you: Although our TLK Law Firm does not dare to claim to be the company providing the best legal services on the market, we satisfy all of the above criteria and more. will definitely be a good choice for you.

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V. SOME QUESTIONS RELATED TO IMPLEMENTATION OF DISSOLUTION OF INVESTMENT PROJECTS

Question 1: How long can the investment project's operating term be extended?

Reply:

Pursuant to Decree No. 31/2021/ND-CP, the operation extension period for investment projects will be considered and decided by the competent authority based on the objectives, scale, and location. , operational requirements of the project and do not exceed the maximum duration according to the following regulations:

1. The operating term of an investment project in an economic zone must not exceed 70 years.

2. The operating term of an investment project outside an economic zone must not exceed 50 years.

3. Investment projects implemented in areas with difficult socio-economic conditions, areas with particularly difficult socio-economic conditions or investment projects with large investment capital but capital recovery Slowly, the operating term of the investment project may be longer but not exceeding 70 years.

Question 2: Will investment projects in economic zones operating until the end of 70 years be terminated?

Reply:

The answer is yes.

Pursuant to the Investment Law 2020, one of the cases of terminating investment project activities is the expiration of the investment project's operating term. Investment projects in economic zones have an operating term of no more than 70 years. Therefore, when the 70-year period expires, the investment project in the economic zone will be terminated.

Question 3: Which investment projects are considered investment projects that use outdated technology, pose a potential risk of environmental pollution, are resource-intensive and cannot be extended?

Reply:

According to the provisions of Decree No. 31/2021/ND-CP, investment projects using outdated technology, with potential risks of environmental pollution and resource intensiveness cannot be adjusted or extended. Dynamics include:

1. Projects using technological lines when operating do not meet the provisions of National Technical Regulations on safety, energy saving, and environmental protection; or capacity (calculated according to the number of products created by the technological line in a unit of time) or the remaining technological line's efficiency is less than 85% of the design capacity or efficiency; or the consumption of raw materials and energy exceeds 15% of the design.

In case there is no national technical regulation on safety, energy saving, and environmental protection related to the project's technology line, technical standards of Vietnam's national standards or national standards of Vietnam or national standards shall apply. national standards of one of the G7 countries, Korea on safety, energy saving, and environmental protection;

2. Projects using machinery and equipment for production with commodity codes (HS codes) in Chapters 84 and 85 of Vietnam's List of Exported and Imported Goods that are older than 10 years or when in operation do not meet the provisions of National Technical Regulations on safety, energy saving, and environmental protection.

In case there are no national technical regulations on safety, energy saving, and environmental protection related to the project's machinery and equipment, technical standards according to Vietnam's national standards or technical standards shall apply. National standards of one of the G7 countries, Korea on safety, energy saving, and environmental protection.

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Above is some general advice that we would like to offer to our customers. As a service provider, we always understand and are ready to accompany and solve the needs and difficulties that customers are facing. If you still have questions or need more in-depth advice, please contact the hotline: 0972118764 to receive direct advice from a lawyer (completely free consultation).

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