TRANSFER OF INVESTMENT PROJECTS, KEY CONSIDERATION ON CONDITIONS AND PROCEDURE

The transfer of investment projects is not only a tool for resource restructuring but also a strategic activity in the context of economic development. However, in addition to concerns about implementation efficiency, investors must fully comply with legal conditions and transfer procedures to minimize legal risks and safeguard their legitimate rights and interests.

Projects may be transferred wholly or in part

The transfer of an investment project is a legal act by which an investor, whether an organization or an individual, transfers in whole or in part of their rights and obligations related to their investment project to another investor.

Under the Law on Investment. Such transfers must comply with the applicable provisions of investment law, including specific conditions defined for the project and relevant legal regulations.

To transfer an investment project, compliance with legal conditions is required

Pursuant to Article 46 of the Law on Investment 2020, the conditions for transferring part or the entirety of an investment project include:

– The investment project or the portion of the project being transferred must not have been terminated.

– In cases where the transferee is a foreign investor, the investment project or portion thereof must satisfy conditions regarding market access, national defense, security, as well as land use and management.

– Conditions under land laws must be met in cases of transferring investment projects associated with the transfer of land use rights and assets attached to the land.

– Compliance with laws on housing and real estate business is required for the transfer of investment projects involving housing development or real estate projects.

– Conditions specified in the investment policy approval document, the Investment Registration Certificate, or other relevant legal regulations (if any) must be fulfilled.

– State-owned enterprises are required to comply with regulations on the management and use of state capital invested in production and business activities at enterprises before implementing any adjustment to the investment project.

Legal procedures required to complete the transfer of investment project

If the investment project satisfies the conditions for transfer, the applicable procedures will vary depending on the characteristics and legal status of the project, in accordance with current legal guidelines.

Investors must undertake procedure for adjustment on investment project:

Procedure for adjustment on investment project is applied to cases where the investor has been approved through one of the following methods: (i) Auctioning land use rights in accordance with land law provisions; (ii) Bidding to select investors as stipulated by the law on bidding; (iii) Direct investor approval in specific cases as prescribed by laws.

Investors must comply with applicable legal provisions:

For investment projects not belong to the above-mentioned cases, the transfer of the investment project or the transfer of asset ownership to the receiving investor must be carried out in accordance with the relevant provisions of civil law, corporate law, real estate business law, and other applicable legal regulations.

Additional considerations on investment project transfer

The transfer of an investment project only considered to be valid upon approval by the investment registration authority, requiring full compliance with prescribed documentation and procedures. Beyond the legal formalities, investors should pay attention to the following factors to ensure a smooth and effective transaction, to:

– Review the legal aspects of the investment project, ensuring land use rights, legal documentation, and the project’s compliance with applicable laws.

– Reasonably assess the transferee’s capacity, including civil legal capacity, capacity for civil acts (for individuals), financial capability, and fulfillment of technical requirements.

– Ensure the project transfer agreement is complete and precise, clearly defining the scope of rights and obligations while avoiding any violations of legal prohibitions.

– Monitor and update relevant legal regulations regularly to ensure compliance both during and after the completion of the project transfer.

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