WHAT IS “SPECIAL” IN THE SPECIAL INVESTMENT PROCEDURE?

In the context of global competition for high-quality investment capital, Vietnam has demonstrated a strong commitment to reform by introducing regulations on the Special Investment Procedure. This marks a significant advancement in the country’s investment legal framework, emphasizing streamlined administrative processes and fostering an open, transparent investment environment – particularly in high-tech industries, innovation, and the semiconductor sector, which are identified as key drivers of growth in the digital economy era.

What is the special investment procedure and what makes it “special”?

Introduced under Law No. 57/2024/QH15 amending the Law on Planning, the Law on Investment, the Law on Public-Private Partnership Investment, and the Law on Bidding, the special investment procedure is a newly established legal mechanism designed to attract foreign investment into key sectors.

The special investment procedure is implemented through a streamlined process, under which many conventional procedures are not required.

This procedure adopts a post-licensing (ex-post) supervision mechanism instead of the traditional pre-licensing (ex-ante) approach, allowing investors to commit to compliance with requirements relating to construction, environment, and fire prevention and fighting during the project implementation process, rather than fulfilling them prior to licensing as required under standard procedures.

When opting to implement a project under the special investment procedure, investors are afforded greater facilitation through the exemption from several administrative procedures, including: (i) approval of investment policy; (ii) technology appraisal; (iii) preparation of environmental impact assessment reports; (iv) formulation of detailed planning; (v) issuance of construction permits and other approvals required for construction, fire prevention, and firefighting activities.

The special investment procedure helps shorten the licensing phase and accelerates the process of bringing projects into operation

With the post-licensing (ex-post) compliance mechanism as mentioned above, compared to the “traditional” approach, the special investment procedure offers a notable improvement in both timing and implementation efficiency, enabling projects to enter the operational phase sooner.

As provided under Law No. 57/2024/QH15, the application dossier will be reviewed, assessed, and approved by the management boards of industrial parks, export processing zones, high-tech zones, and economic zones. The investment registration certificate shall be issued within 15 days.

Which projects are eligible for the special investment procedure?

The special investment procedure is not applied broadly, but is reserved for projects that are aligned with national strategies and socio-economic development planning. To qualify, such projects must meet specific requirements regarding their investment location and sector.

Requirements on investment location

Only projects located within designated functional zones such as industrial parks, export processing zones, high-tech zones, centralized information technology parks, free trade zones, and functional subzones within economic zones are eligible for implementation under the special investment procedure. Accordingly, the authority to appraise applications and issue the investment registration certificate rests with the management boards of industrial parks, export processing zones, high-tech zones, and economic zones.

It is important to note that projects subject to investment policy approval by the National Assembly are not eligible for the special investment procedure.

Investment sector requirements

To ensure that the legal framework effectively serves strategic investors with strong technological, technical, financial capabilities, and a commitment to sustainable development in Vietnam, the special investment procedure is selectively applied not only based on the investment location but also on the investment sector.

Specifically, the special investment procedure applies to investment projects such as the construction of innovation centers, research and development (R&D) centers, investments in the semiconductor integrated circuit industry, design and manufacturing of components, integrated electronic circuits (ICs), flexible electronics (PE), chips, semiconductor materials, and high-tech projects related to the development and production of products listed in the high-tech product catalog encouraged for development by the Prime Minister’s decision.

What are the requirements regarding investor commitments?

Commitment to compliance with standards and regulations

At the project registration stage, investors are required to make clear and explicit commitments to fully comply with all legal regulations related to construction, environmental protection, and fire prevention and fighting. These commitments must be clearly stated in the written request for investment project implementation, serving as a basis for the evaluation and licensing of the project.

Guarantees for implementation of investment projects

Investors are also required to carry out investment guarantee procedures as a substantive commitment to timely and lawful project implementation. This obligation must be fulfilled either through a security deposit (escrow) or a guarantee commitment issued by a credit institution, as prescribed by law.

Legal consequences in case of non-compliance with commitments and guarantees

The “post-licensing” (ex-post) mechanism in the special investment procedure allows for a shortened processing time during the licensing phase. However, it imposes stricter accountability on investors regarding their commitments and guarantees in the post-licensing phase.

In the event of non-compliance, incomplete implementation, or failure to fulfill commitments, the investor may face administrative penalties, suspension, or even termination of operations.