Investment conditions are one of the important and necessary issues when foreign investors need to find out when doing investment activities in Vietnam. In the scope of the article “Conditions of investors when adjusting investment licenses” Thanh Do Law would like to introduce conditions for investors when adjusting investment licenses.
I. Legal basis
– Law on Investment 2014
– Decree 118/2015/ND-CP detailing and guiding the implementation of a number of articles of the Investment Law.
– Other relevant legal documents.
II. Investment conditions
2.1. Definition of investment conditions for foreign investors
When investing in Vietnam, foreign investors must meet many conditions. To explain investment conditions for foreign investors, Clause 6, Article 2 of the 2014 Law on Investment stipulates as follows:
Investment conditions for foreign investors are the conditions that foreign investors must satisfy when conducting investment activities in conditional investment sectors or trades applicable to foreign investors as prescribed in laws, ordinances, decrees and international treaties on investment. Investment conditions for foreign investors are applied to investment activities of foreign investors in one of the following cases:
1) Investment in establishing economic organizations;
2) Investment in the form of capital contribution, share purchase, capital contribution in economic organizations;
3) Investment in the form of business cooperation contract;
4) Receiving the transfer of an investment project or other cases of receiving investment projects;
5) Amendment and supplementation of business investment lines and trades of foreign-invested economic organizations.
2.2. Investment conditions for foreign investors
Investment conditions for foreign investors specified in Clause 6, Article 2 of Decree No. 118/2015/ND-CP include:
1) Conditions on ratio of foreign investors’ ownership in charter capital of a business organization;
2) Condition of investment form;
3) The scope of investment activities;
4) Conditions for Vietnamese partners to participate in investment activities;
5) Other conditions as prescribed in laws, ordinances, decrees and international treaties on investment.
2.3. Principles of applying investment conditions to foreign investors
1) Foreign investors conducting investment activities in different industries and trades must satisfy all investment conditions for those industries and trades;
2) Foreign investors subject to international treaties on investment with different provisions on investment conditions may choose to apply the investment conditions specified in one of these treaties; In case a treaty has been selected, the foreign investor shall exercise his/her rights and obligations in accordance with such international treaty;
3) For service sectors and sub-sectors that have not been committed or are not specified in Vietnam’s WTO Schedule of Commitments and other international treaties on investment for which investment conditions are already provided by Vietnamese law. for foreign investors, the provisions of Vietnamese law shall apply;
4) Foreign investors in territories that are not WTO members conducting investment activities in Vietnam are entitled to the same investment conditions as prescribed for investors belonging to countries or territories that are WTO members, unless otherwise provided for by laws and international treaties between Vietnam and that country or territory;
5) For service sectors and sub-sectors that have not been committed or are not specified in Vietnam’s WTO Schedule of Commitments and other international treaties on investment for which investment conditions are not yet provided by Vietnamese law. investment for foreign investors, the investment registration agency shall consult the Ministry of Planning and Investment and the Ministry managing the sector for consideration and decision;
6) In case a foreign investor is permitted to conduct investment activities in the service sectors and sub-sectors specified at Point dd, Clause 2, Decree 118/2015/ND-CP and the service sectors and sub-sectors. This has been published on the National Information Portal (dautunuocngoai.gov.vn or fdi.gov.vn) on foreign investment in accordance with Article 13 of Decree No. 118/2015/ND-CP, to consider and decide on investment activities of foreign investors in the same industry or trade without consulting the line ministries.
Thus, when conducting investment activities, to satisfy the investment conditions, foreign investors will apply the following principles:
Case 1: If the business lines are not in Appendix IV of the Law on Investment 2014 and are not in the commitment schedule, the Investor when the first registration agency collects opinions of relevant Ministries;
Example: Brokerage center, job placement
Case 2: If the business lines are not in Appendix IV of the Law on Investment 2014 and are not in the commitment schedule, but the investor has been allowed to carry out the activity and has been published on the National Investment Information Portal. in foreign countries, the investment registration agency to consider and decide on investment activities of investors is not required to consult the concerned ministries;
Example: Cleaning services for buildings
Case 3: If the business lines are listed in Appendix IV of the Law on Investment 2014 and in the commitment schedule, the investor shall review the regulations on conditions according to the commitment schedule and the laws of Vietnam.
Example: Travel service
Case 4: If the business lines are in Appendix IV of the Law on Investment 2014 and are not in the commitment schedule, the investor shall apply the conditions under Vietnamese law.
Example: Real estate business
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