Viet Nam - A Guide for Business and Investment - asean-korea centre

1. Selection of an InvestmentProject2. Project Classification andLicensing BodiesBased on the socio-economic development planningand orientation for each five year period, the Ministryof Planning and Investment issues a list of: (i) speciallyencouraged investment projects; (ii) encouraged investmentprojects; (iii) geographical regions in whichinvestment is encouraged; (iv) sectors in which thelicensing of investment is conditional; and (v) sectorsin which investment will not be licensed.Leaving aside sectors in which the licensing of investmentis conditional or in which investment willnot be licensed, an investor may on its own initiativeselect investment projects, investment partners, thelocality, the duration of investment, the markets forthe sale of products and its charter capital contributionproportion in accordance with the provisions ofthe Law on Investment and other related legal instruments.Also, the investor may generally decide onthe form of investment.However, a number of investment sectors that areunconditional for Vietnamese enterprises but conditionalfor FIEs (e.g. exploitation and processingof mineral resources, and investment in the fieldsof import, export, trading and distribution etc.). TheLaw on Investment and Decree 108, provide forsuch list of investment sectors, however, relevantsectorial legislation shall provide for what form of“conditions” that an FIE is required to meet. In certainindustries, this may mean that the FIE may onlyoperate in the form of a foreign-invested JVE witha majority or minority participation of a Vietnameseenterprise. In other sectors, FIEs operating in conditionalinvestment sectors may nevertheless operateas 100% FOEs but meet certain conditions such astheir capital structure, project-specific experienceand so forth...Annually, the Ministry of Planning and Investmentpublishes a list of national projects calling for foreigninvestment capital. Ministries, branches and provincialPeople’s Committees also publish such lists ofprojects for their respective industries and localities.In principle, the projects included in those lists areregarded as complying with current planning.The authority to approve investment projects is currentlydivided amongst (i) the Prime Minister of theGovernment (“PM”) with the scope of approval is limitedto the “investment policy”, (ii) the People’s Committeesin the provinces and cities under the centralState administration (“PCs”), and (iii) the managementboards of industrial zones, export processingzones, high-tech zones and economic zones in theprovinces and cities under the central State administration(“MBs”).The hierarchy of the investment approval and licensingauthority is as follows:• PM:– Projects regardless of capital source or capitalamount within specific sectors (airports, seaports,mining, oil & gas, TV broadcasting, casinos,cigarette manufacturing, universities, developmentof IZs, EPZs, HTZs and ECs (“Zones”)– Projects regardless of capital source with capitalamount over VND1,500 billion within specificsectors (electricity, metallurgy, alcohol & beerproduction, trading etc.)– FDI projects regardless of capital amount withinspecific sectors (sea transportation, post, telecom& internet networks, printing etc)• PCs:– Projects outside Zones and not within PM approvalauthority– Projects for development of infrastructure inZones in localities with no MA• MBs:– Projects in Zones and not within PM approvalauthority– Projects for development of infrastructure inZonesAll investment certificates (previously called “investmentlicences”) are now issued by either the relevantPCs or MBs. However, in specialised sectors such asbanking or insurance, the relevant line ministries arestill empowered with the approval and licensing authorityas previously were.PART IV. INVESTMENT PROCEDUREViet Nam - A Guide for Business and Investment 47