WHAT OBLIGATIONS MUST BE FULFILLED BEFORE CARRYING OUT PROCEDURES TO TERMINATE THE OPERATION OF AN INVESTMENT PROJECT?
QUESTION
Dear TLK Law Firm, we hope that your company will answer to the following problem: In the near future, my company will have a number of projects that will expire. We have no plans to continue exploiting these projects so we decided to carry out procedures to terminate investment projects. So let me ask, what obligations does our company need to fulfill before carrying out procedures to terminate the investment project? 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. 01/2021/ND-CP issued by the Government on January 4, 2021 on business registration;
4. Other legal documents providing relevant guidance.
CONSULTATION CONTENT
Currently, there are many investment projects that have reached the end of their operating term or fall into situations where operations need to be terminated. However, investors are confused because they do not know what obligations they need to fulfill in addition to the administrative procedures prescribed by law before terminating the investment project's operations. The issue of obligations that need to be fulfilled before proceeding with the procedure to terminate the investment project that you are having problems with will be consulted by us through the article below.
Photo 1. What obligations must be fulfilled before carrying out procedures to terminate the operation of an investment project?_Hotline: 0972118764
I. SOME IMPORTANT LEGAL ISSUES RELATED TO OBLIGATIONS INVESTORS MUST PERFORM BEFORE PROCEDURE TO TERMINATE INVESTMENT PROJECT ACTIVITIES
1. What is an investor?
According to the concept stipulated in the Investment Law 2020, investors are organizations and individuals carrying out business investment activities, including domestic investors, foreign investors and economic organizations with investment capital foreign investment.
1.1. Investor rights
Pursuant to the Investment Law 2020, a number of investors' rights are regulated throughout the provisions of the law, specifically as follows:
- Right to choose industries and professions to carry out business investment activities;
- Right to self-determination in business investment activities;
- Ownership of assets, investment capital and income;
- Right to ensure business investment activities;
- Right to enjoy incentives in case of changes in law.
1.2. Obligations of investors
Regarding obligations, investors have a number of obligations prescribed in the Investment Law 2020 as follows:
- Comply with the provisions of the Investment Law, laws on planning, land, environment, construction, labor, fire prevention and fighting, other relevant laws, and policy approval documents Investment (if any) and Investment Registration Certificate (if any) during the implementation of the investment project;
- Fulfill financial obligations fully and promptly.
Thus, investors are organizations and individuals permitted by competent authorities to carry out business investment activities. Investors have rights and obligations prescribed under the Investment Law, including a number of basic rights to smoothly carry out investment projects and the main obligations are to comply with legal regulations, implement Perform financial obligations well.
2. Cases of termination of investment projects
Pursuant to the Investment Law 2020, investment projects terminate operations due to decisions from the investors themselves or from the investment registration agency. In particular, each group has specific cases as follows:
2.1. Investors terminate investment activities and investment projects
Investors terminate investment activities and investment projects in the following cases:
- The investor decides to terminate the operation of the investment project;
- According to the conditions for termination of operations specified in the contract and charter of the enterprise;
- Expiration of the investment project's operating term.
2.2. The investment registration agency terminates or partially terminates the activities of the investment project
The investment registration agency terminates or partially terminates the operation of an investment project in the following cases:
- The investment project falls into one of the cases specified in the Investment Law in which the investor is unable to overcome the conditions of cessation of operations;
- 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 prescribed cases at Point d of this Clause;
- The investment project has stopped operating and at the end of 12 months from the date of shutdown, the investment registration agency cannot contact the investor or the investor's legal representative;
- 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;
- 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;
- Investors carry out investment activities on the basis of fake civil transactions according to the provisions of civil law;
- According to court judgments, decisions, and arbitration awards.
Thus, the termination of an investment project is different depending on whether the entity deciding this termination is the investor or the investment registration agency. Since then, the procedures for terminating the operation of investment projects also have differences in document elements as well as implementation sequence.
3. Obligations of investors before carrying out procedures to terminate operations of investment projects
Pursuant to the Investment Law and Decree No. 01/2021/ND-CP, before carrying out procedures to terminate the operation of an investment project, investors are responsible for fully fulfilling a number of obligations such as after:
3.1. Obligation to liquidate corporate assets
Regarding the liquidation of assets when the investment project terminates operations, the investor will conduct the liquidation procedures themselves, except for handling land use rights and assets attached to land because this issue will be carried out independently and comply with the provisions of land law and other relevant laws.
3.2. Obligation to handle land use rights and assets attached to land
Land is an asset owned by the entire people, managed on behalf of the State. The use of land for investment projects has been reviewed and approved by competent authorities and according to legal regulations to ensure the rights of relevant entities. Therefore, when handling land use rights and assets attached to land in case of termination of investment project operations, investors do not do so arbitrarily but must comply with the provisions of land law belt and other relevant legal regulations.
3.3. Tax and financial obligations
An investment project that terminates operations is similar to a dissolved enterprise, therefore, tax and financial obligations also need to be resolved by the investor before completing procedures to terminate the operation of the investment project privately. Investors are responsible for providing information about the termination of investment project activities to tax authorities, fulfilling tax obligations to tax authorities, paying all debts,...
Thus, before carrying out procedures to terminate the operation of an investment project, investors need to perform a number of obligations such as: liquidating assets, handling land use rights and assets attached to land according to the laws, fulfilling tax and financial obligations,...
=> See more: What industries can foreign-invested enterprises operate in?
II. PROCEDURE FOR IMPLEMENTING PROCEDURES FOR TERMINATION OF INVESTMENT PROJECT ACTIVITIES
1. Steps to carry out procedures for terminating investment project operations
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.
=> See more: Where to submit an application to establish a foreign-invested enterprise?
2. Document components and procedures for terminating investment project operations
A. Document components:
Documents for carrying out procedures for terminating investment project activities include a number of documents corresponding to the following 2 cases:
(1) In case of self-decision to terminate the operation of an investment project, the dossier includes:
1. Decision to terminate the operation of the investment project;
2. Investment registration certificate (if any).
(2) In case of termination of operation of an investment project according to the conditions specified in the contract, enterprise charter or expiration of the investment project's operating term, the dossier includes:
1. Notice of investors;
2. Investment registration certificate (if any);
3. Copy of documents recording the termination of investment project operations.
Number of documents: 01 set.
Note: In addition to the above documents, each case needs to be accompanied by the following documents:
1. Power of attorney for the person submitting the application (in case of authorizing someone else to do so);
2. Certified copy of personal legal documents (ID card, citizen identification card, valid passport) of the person performing the procedure;
3. Other documents required by competent state agencies (if any).
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: Can foreign individuals establish a company in Vietnam? What are conditions?
Photo 2. What obligations must be fulfilled before carrying out procedures to terminate the operation of an investment project?_Hotline: 0972118764
III. SUMMARY OF THE ANSWER SECTION: WHAT OBLIGATIONS MUST BE PERFORMED BEFORE IMPLEMENTING PROCEDURES FOR TERMINATION OF INVESTMENT PROJECT ACTIVITIES?
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. 01/2021/ND-CP, before carrying out procedures to terminate the operation of an investment project, investors are responsible for fulfilling a number of obligations, as follows:
1. Liquidation of assets when the investment project terminates operations;
2. Handle land use rights and assets attached to land according to the provisions of land law and a number of other relevant legal regulations;
3. Fulfill tax and financial obligations similar to the case of business dissolution.
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;
Fifth: Professional, thoughtful, flexible and logical service provision process to optimize work performance and save customers' time;
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Seventh: Rich services in both fields of supply and service packages in the same field for customers to choose the appropriate service package, as well as comprehensive support for customers throughout the operation process. movement;
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.
=> See more: Comprehensive investment project termination and consulting services
V. SOME QUESTIONS RELATED TO OBLIGATIONS INVESTORS MUST PERFORM BEFORE PROCEDURE TO TERMINATE INVESTMENT PROJECT ACTIVITIES
Question 1: Can an investment project that terminates operations be transferred?
Reply:
The answer is no.
Pursuant to the Investment Law 2020, the investment project is not terminated according to the provisions of the Investment Law which is one of the conditions for the investment project to be partially or completely transferred. Thus, once the investment project has terminated its operation, it is not allowed to be transferred.
Question 2: The investment project has ceased operations and after 06 months from the date of termination, if the investment registration agency cannot contact the investor or the investor's legal representative, will the project have been discontinued?
Reply:
The answer is no.
Pursuant to the Investment Law 2020, one of the cases where the investment registration agency decides to terminate the operation of an investment project is when the investment project has stopped operating and the 12-month period has expired from the date of cessation, the investment registration agency cannot contact the investor or the investor's legal representative. Therefore, if the investment project stops operating for only 6 months and the investment registration agency cannot contact the investor or the investor's legal representative, then there is not enough time for the registration agency to register. Investor decides to terminate the operation of the investment project.
Question 3: In what cases does the investment registration agency decide to terminate investment project operations but not revoke the Investment Registration Certificate?
Reply:
According to the provisions of the Investment Law 2020, when the termination of an investment project is decided by the investment registration agency, this agency will revoke the investor's Investment Registration Certificate. However, in case of only partial termination of investment project activities, the investment registration agency will not revoke this Certificate.
=> See more: How long does it take to dissolve an investment project?
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).
Thank you very much!
Administrative Procedures Department - TLK Law Firm
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