PROCEDURE FOR TERMINATING THE OPERATION OF AN INVESTMENT PROJECT

Expanding the scale and scope of operations through the establishment of dependent units, such as branches or representative offices, serves as a strategic imperative for various corporate forms, including limited liability companies, joint-stock companies, partnerships, and private enterprises. Under current statutory regulations, these dependent entities may be established within the same province or city as the head office or in different jurisdictions to meet commercial expansion and representation objectives. The contemporary legal framework establishes a unified operational registration procedure, striking a balance between corporate administrative autonomy and effective state oversight over dependent business networks.

1. Scope of Application

The procedure for terminating an investment project’s operation applies to projects that have been granted an Investment Registration Certificate and/or Investment Policy Approval, in one of two scenarios: (i) the investor voluntarily decides to terminate the project, terminates it per conditions agreed in a contract or the company’s charter, or the project’s operating term has expired; and (ii) the investment registration authority issues a decision to terminate the project, in whole or in part, due to the investor’s violations or other statutory grounds for mandatory termination. This procedure applies uniformly to both domestic and foreign investors’ projects.

2. Grounds for Project Termination

For voluntary termination by the investor, the grounds include: the investor’s own decision to end the project; termination per conditions already set out in a contract or the company’s charter; or expiration of the project’s operating term as stated in the Investment Policy Approval or Investment Registration Certificate.

For termination initiated by the investment registration authority, the grounds are more varied, including: the project falls within the scope of mandatory suspension and the investor is unable to remedy the conditions; more than 24 months have passed since the deadline for achieving the project’s operational objectives (in whole or by phase) without completion, and the project does not qualify for a schedule adjustment; the investor is no longer permitted to use the investment site and fails to adjust the site within 6 months; the project has been suspended continuously for 12 months and the authority cannot contact the investor; the project is subject to land recovery; the investor fails to make the required deposit or provide a guarantee for project implementation; the project was established based on a sham civil transaction; pursuant to a court judgment, decision, or arbitral award; or an economic organization has dissolved without properly terminating or transferring the project as required by law. For projects subject to Investment Policy Approval, termination may only proceed after obtaining the opinion of the approving authority.

3. Legal Procedure Required

Procedure name: Notification/Decision on Termination of Investment Project Operations.

Where the investor voluntarily terminates the project, it must submit the notification and termination decision, together with the Investment Policy Approval (if any) and Investment Registration Certificate (if any), to the investment registration authority within 15 working days of the decision. Within 3 working days of receiving the complete dossier, the authority notifies relevant agencies of the termination.

Where termination occurs due to contractual/charter conditions or expiration of the operating term, the investor returns the Investment Policy Approval (if any) and Investment Registration Certificate (if any), together with a copy of the document evidencing termination, within the same 15-working-day period; the authority likewise notifies relevant agencies within 3 working days.

Where the investment registration authority itself initiates termination (due to violations or other statutory grounds), it directly issues the termination decision and simultaneously revokes the Investment Policy Approval (if any) and the Investment Registration Certificate for projects that had been granted one.

Outcome: The Investment Policy Approval and/or Investment Registration Certificate cease to be effective from the date the project termination decision takes effect.

4. Legal Consequences

Terminating a project gives rise to obligations to address related matters — asset liquidation, employee entitlements, and financial obligations to the State and business partners under relevant land, tax, and labor regulations. Where termination is initiated by the investment registration authority due to a violation, the authority simultaneously revokes the Investment Registration Certificate, except in cases of partial termination. An investor that fails to meet the 15-working-day notification deadline, or fails to return the previously issued approval documents and certificates, may face delays in processing subsequent procedures following the project’s termination.