WHEN ADJUSTING TO INCREASE INVESTMENT CAPITAL FOR FOREIGN INVESTMENT PROJECTS IN VIETNAM, DO INVESTORS HAVE TO ESCROW?
QUESTION
Dear TLK Law Firm, we hope that your company will answer the following question: I am a foreign investor implementing an investment project in Vietnam. Currently, I have mobilized additional investment capital for the project and implemented procedures to increase investment project capital. However, I don't know whether when increasing investment capital I have to pay more deposit or not. So, Lawyer let me ask: When adjusting to increase investment capital for foreign investment projects in Vietnam, do investors have to pay additional deposits? 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
Reality shows that in recent times capital from foreign investors has been a very important capital supplement channel, contributing to promoting the development and growth of the national economy. Recent achievements in attracting foreign capital have also enhanced Vietnam's position in the international market. Therefore, currently there are many foreign investors who have been implementing investment projects on a small to large scale in our country. During the process of foreign investors implementing investment projects in Vietnam, it is difficult to avoid some changes that lead to adjusting the investment project, especially when increasing the capital of the investment project. In this case, the foreign investor must carry out procedures to adjust the Investment Registration Certificate regarding the content of increasing investment capital at a competent authority in Vietnam. However, when customers increase the capital of an investment project, they do not know whether they will have to pay an additional deposit or not. Through the article below, we - TLK Law Firm will help you answer questions related to when adjusting to increase investment capital for foreign investment projects in Vietnam, Do investors have to pay an additional escrow?
Photo 1. When adjusting to increase investment capital for foreign investment projects in Vietnam, do investors have to escrow?_ Hotline: 0972118764
I. SOME IMPORTANT LEGAL ISSUES RELATED TO DEPOSITS WHEN INCREASING INVESTMENT PROJECT CAPITAL
1. Cases in which investors do not have to deposit a escrow
Pursuant to the Investment Law 2020, investors must deposit or have a bank guarantee on deposit obligations to ensure the implementation of investment projects that require the State to allocate land, lease land, or allow transfer of land use purposes, except for the following cases:
(1) The investor who wins the auction for land use rights to implement an investment project is allocated land by the State with land use fees, or leases land with a one-time land rent for the entire lease period;
(2) The investor wins the bid to implement an investment project using land;
(3) Investors are allocated land or leased land by the State on the basis of receiving transfer of investment projects that have made deposits or completed capital contributions and capital mobilization according to the schedule specified in the acceptance document, Investment policy agreement, Investment registration certificate;
(4) Investors are allocated or leased land by the State to implement investment projects on the basis of receiving transfer of land use rights and assets attached to land from other land users.
Thus, when implementing an investment project in Vietnam, foreign investors must deposit a deposit to ensure the implementation of an investment project that requires the state to allocate land, lease land, or allow change of land use purpose to avoid receiving land without using it. However, in some cases, investors are exempted from deposit deposits by the State to create favorable conditions for investors to carry out investment projects in Vietnam.
=> See more: Conditions for increasing investment capital?
2. Deposit level to ensure investment project implementation
Pursuant to the Investment Law 2020, depending on the scale, nature and implementation progress of each investment project, the deposit level to ensure the implementation of the investment project ranges from 01% to 03% of the project's investment capital. In case an investment project includes many investment stages, the deposit amount is paid and refunded according to each stage of investment project implementation, except in cases where it is not refundable.
Thus, the deposit level to ensure the implementation of the company's investment project will be calculated according to the percentage of investment capital of the investment project depending on the scale, nature and implementation progress of each project. The deposit level can be from 01% to 03% of the investment capital of the investment project.
3. Deposit when increasing investment capital of investment projects
Pursuant to Decree No. 31/2021/ND-CP, in case of adjusting to increase the project's investment capital, the investor must pay an additional deposit amount or supplement a deposit guarantee from the corresponding credit institution with increased investment capital as prescribed in the decision approving the adjustment of investment policies and the adjusted Investment Registration Certificate.
Note: In case 50% of the deposit paid before adjustment has been refunded, the investor only has to pay an amount equal to 50% of the additional deposit.
Thus, when increasing the investment capital of an investment project, the investor must pay an additional deposit calculated in a percentage corresponding to the increased investment capital. The level of additional payment is determined similarly to when making a deposit to ensure the implementation of an investment project.
=> See more: What is required to adjust the investment certificate to increase capital?
II. SUMMARY OF THE ANSWER SECTION: WHEN ADJUSTING TO INCREASE INVESTMENT CAPITAL FOR FOREIGN INVESTMENT PROJECTS IN VIETNAM, DO INVESTORS HAVE TO PAY MORE DEPOSIT?
Dear Customers, from the above synthesis and analysis, TLK Law Firm would like to give the following answer:
When increasing investment capital for a foreign investment project in Vietnam, investors must pay an additional deposit corresponding to the increased capital amount. The deposit level is determined according to the percentage of investment capital of the investment project (from 01% to 03%).
Note:
- In case 50% of the deposit paid before adjustment has been refunded, the investor only has to pay an amount equal to 50% of the additional deposit.
- In addition to deposit measures, investors implementing foreign investment projects in Vietnam can choose the option of having a bank guarantee as a measure to ensure the implementation of the investment project.
Photo 2. When adjusting to increase investment capital for foreign investment projects in Vietnam, do investors have to escrow?_ Hotline: 0972118764
III. 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;
Sixth: Reasonable and competitive service prices;
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.
IV. SOME QUESTIONS RELATED TO DEPOSITS WHEN INCREASING INVESTMENT PROJECT CAPITAL
Question 1: Is the deposit returned after completing the investment project?
Reply:
The answer is yes.
Pursuant to Decree No. 31/2021/ND-CP, the deposit will be refunded in stages as follows:
(1) Refund 50% of the deposited amount at the time the investor has been granted a decision on land allocation, land lease, or permission to change the land use purpose by a competent state agency and approved by the competent state agency. The country has the authority to issue licenses or other approvals to carry out construction activities (if any);
(2) Refund the remaining deposit and interest arising from the deposit (if any) at the time the investor has completed the acceptance of the construction work.
Note: In case of reducing the investment capital of the project, the investor will be refunded the deposit amount corresponding to the reduced investment capital as prescribed in the Decision approving the adjustment of investment policy, Certificate of registration. Signed investment adjustment.
Question 2: How is the deposit paid?
Reply:
Pursuant to Decree No. 122/2021/ND-CP, project implementation security money is paid into the account of the investment registration agency opened at a commercial bank established in accordance with the provisions of Vietnamese law, chosen by the investor; Investors bear costs related to opening and maintaining an account to ensure project implementation and performing transactions related to the account. In case of implementing multiple projects that require signing a Project Implementation Guarantee Agreement with the same investment registration agency, the investor can agree with the investment registration agency on using the same account to receive money to guarantee project implementation obligations for projects implemented in the area managed by that agency.
Question 3: Is it okay to increase investment capital of a foreign investment project in Vietnam without paying a deposit?
Reply:
Pursuant to Decree No. 122/2021/ND-CP, the act of increasing the investment capital of a project without paying an additional deposit or supplementing a deposit guarantee from a credit institution when required for additional in writing from the investment management agency will be fined from 50,000,000 VND - 70,000,000 VND.
In addition to being fined, investors are subject to remedial measures such as: Being forced to pay additional project performance guarantees in accordance with the law.
=> See more: Ways of increasing investment capital? In what ways do investors contribute capital to Vietnam?
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