Notable changes in the Investment Law 2014

On 26 November, 2014, the National Assembly of the Socialist Republic of Viet Nam passed Law No. 67/2014/QH13 on Investment (Investment Law 2014) with many new provisions that have significant impacts for both foreign and domestic investors. The law will take effect on July 1, 2015. Investment Law 2014 has shown several outstanding points compared with the Investment Law 2005.

Granting Investment Certificate

Domestic investment projects with capital from 15 billion VND and up, or projects in conditional investment sectors must be registrated for investment certificates granting, as stipulated at Article 45 of the Investment Law 2005.

But, under the Investment Law 2014, domestic investors shall apply for business registration certificate only, and they do not need to file for investment certification.

Investment Law 2005 stipulates that foreign-invested projects must file for Investment Certificates even though the foreign stake is just 1%. Meanwhile, the Investment Law 2014 provisions, only foreign investor(s) holding 51% or more of its charter capital need to make registration certificates. Projects with less than 51% of foreign stake will be treated as domestic investment projects.

According to the Law on Investment 2005, Investment Certificate is also Business Registration Certificate. However, according the new Law, such procedures will be separated into two different ones. Foreign investors who want to establish enterprises in Vietnam are required to apply for an Investment Registration Certificate under Investment Law, then apply for Business Registration Certificates under the Enterprises Law.

More projects eligible to enjoy investment incentives:

Several business sectors given investment incentives are concretized, such as production of clean and renewable energy, production of products with at least 30% value added and energy-saving products.

Investment projects in which the scale of capital is at least VND 6,000 billion;

Investment projects in rural areas that employ 500 workers and more;

High-tech companies, scientific and technological companies and organizations.

Investment activities to be prohibited

The Investment Law 2014 provides details of investment activities to be prohibited such as drugs, chemicals and minerals; specimens of wild fauna or flora, and specimens of species of endangered and rare wild fauna or flora specified in the Investment Law 2014 and other laws; prostitution; human trafficking or the trafficking of human body parts; and businesses related to asexual reproduction.

Shortening of time in registration certificate investment

The time limit for registering Investment Certificates in Investment Law 2014 was significantly reduced compared with the Investment Law 2005. Under the provisions of the Investment Law 2014, deadline for granting investment certificates is 5 working days from the date of receiving of the written decision on official investment approval; also for other projects is 15 working days from the date of receiving of validity of the records. The time limit for registration certificates adjusted investment is 10 working days from the date of receiving of validity of the records.

Procedures for decision on investment policies

Articles 30, 31 and 32 of the Investment Law in 2014 defined the large scale projects must get approval of investment policy from the National Assembly, the Prime Minister or PPCs. Thus, Investment Law 2014 formally acknowledged the procedure for approval of investment policy while Investment Law 2005 unofficially acknowledged this case for some projects.

Translated by: Huynh Anh

Written by: 
Hong Hanh