WHEN MUST AN INVESTOR SUSPEND THE OPERATION OF AN INVESTMENT PROJECT UNDER THE 2025 INVESTMENT LAW?

The legal framework governing the suspension of investment project operations serves as a crucial mechanism balancing corporate management autonomy with state regulatory oversight. Under current statutory provisions, the full or partial suspension of an investment project is categorized into two distinct operational mechanisms: (i) voluntary suspension initiated by the investor upon written notification to the investment registration authority; and (ii) mandatory suspension imposed by competent state authorities. This regulatory regime applies uniformly to all investment projects that have been granted Investment Registration Certificates or In-principle Investment Approvals, irrespective of whether the investor is domestic or foreign.

1. Scope of Application

Under the 2025 Investment Law (effective from 1 March 2026), the suspension of an investment project’s operation falls into two categories: (i) voluntary suspension by the investor, who must notify the investment registration authority in writing; and (ii) mandatory suspension ordered by a competent state authority — either the investment registration authority or the Prime Minister. These rules apply to all investment projects that have been granted an Investment Registration Certificate or an Investment Policy Approval, regardless of whether the investor is domestic or foreign.

2. Specific Grounds for Suspending Project Operations

Voluntary suspension typically arises from a need to restructure production or business activities, or due to a force majeure event. Notably, where suspension results from force majeure, the investor may be considered for exemption from land rental fees or reduction of land use fees during the suspension period, to help address the consequences of the force majeure event.

For mandatory suspension ordered by a state authority, the grounds include: the need to protect historical relics, antiquities, and national treasures under cultural heritage law; remedying environmental protection violations at the request of the environmental management authority; implementing occupational safety measures at the request of the labor management authority; compliance with a court judgment, decision, or arbitral award; or where the investor has already been administratively sanctioned or formally notified by the investment registration authority for failing to comply with the approved investment policy or Investment Registration Certificate, yet continues to violate the terms (excluding violations related solely to project implementation schedule). In addition, the Prime Minister has the authority to order the suspension, in whole or in part, of a project’s operations where its implementation causes or risks causing harm to national defense, security, or the environment.

3. Legal Procedure Required

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

For voluntary suspension, the investor submits a written notification to the investment registration authority that issued the Investment Registration Certificate or the Investment Policy Approval. For mandatory suspension, the competent authority (the investment registration authority or the Prime Minister, depending on the nature of the case) issues a decision suspending the project in whole or in part, specifying the legal grounds and any required remedial measures. The Government provides detailed guidance on the conditions, order, procedures, and duration of project suspension in its implementing regulations.

Outcome: The suspension decision or notification is recorded in the national investment information system, serving as the basis for monitoring and any subsequent action.

4. Legal Consequences of Failing to Remedy the Situation

Suspension of a project’s operations does not automatically mean the project is terminated. However, if the investor is unable to remedy the conditions that led to the suspension, or if the project has remained suspended for 12 consecutive months and the investment registration authority is unable to contact the investor or its legal representative, the authority will issue a decision to terminate the project, in whole or in part. Beyond these two grounds, a project may also be terminated in other circumstances, such as: failing to achieve its approved operational objectives within 24 months of the applicable deadline; being unable to continue using the investment site and failing to adjust the site within 6 months; being subject to land recovery under land law; or failing to make the required deposit to secure project implementation. Businesses should therefore proactively address the underlying causes of a suspension within the prescribed timeframe to avoid the risk of full project termination.