Investment Project Termination Service In Vietnam

Are you considering terminating an investment project but concerned about complex legal procedures and potential risks to your reputation?

Terminating a project is not simply about closing down but also involves various issues such as asset liquidation, settlement of tax and labor obligations.

If not handled properly, you may face administrative penalties and difficulties with future projects. VPL’s investment project termination advisory service will help you manage the entire process quickly, lawfully, and efficiently, saving both time and costs.

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Cases of investment project termination

Article 48 of the 2020 Law on Investment stipulates:

Benefits our service brings to investors

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Scope of Work

VPL’s investment project termination service covers a wide range of specialized tasks, assisting investors in completing all legal and financial procedures comprehensively. The scope of work is generally divided into the following main stages:

Stage 1: Initial consulting and assessment

  • Legal analysis: Advising on the provisions of the Investment Law and related regulations to determine the client’s project termination case.
  • Risk assessment: Analyzing potential legal, tax, labor, and financial risks that investors may encounter during the termination process.
  • Planning: Developing a clear and detailed roadmap for the entire project termination process, including required steps and expected timelines.

Stage 2: Documentation preparation and administrative procedures

  • Document drafting: Preparing and drafting all legal documents required by law for submission to the competent authorities.
  • Filing representation: Representing investors in working directly with authorities such as the Department of Finance and Industrial/Economic Zone Management Boards to submit dossiers and address any issues related to project termination.
  • Monitoring and obtaining results: Tracking the processing status, liaising with state agencies to obtain results, and handing them over to the client.

Stage 3: Handling related matters

  • Financial and tax consulting: Assisting with tax finalization, debt settlement, and other financial obligations.
  • Asset liquidation consulting: Guiding the asset liquidation process, optimizing recovery value, and ensuring compliance with tax and accounting regulations.
  • Labor consulting: Supporting procedures for terminating labor contracts, paying allowances, and notifying labor management authorities.

Frequently Asked Questions

Pursuant to Clause 2, Article 57 of Decree No. 31/2021/ND-CP:

Procedures for termination of operation of an investment project are as follows:

a/ In case an investor itself/himself/herself decides to terminate operation of the investment project according to Point a, Clause 1, Article 48 of the Law on Investment, the investor shall send the decision on termination of operation of the investment project together with the investment registration certificate (if any) to the investment registration agency within 15 days after making the decision;

b/ In case the operation of the investment project is terminated according to terms and clauses of the contract or regulations of the enterprise charter or upon expiration of the project’s operation duration according to Point b or c, Clause 1, Article 48 of the Law on Investment, the investor shall notify thereof to the investment registration agency and return the investment registration certificate (if any) to the latter, enclosed with a copy of the document acknowledging the termination of operation of the investment project, within 15 days after the project’s operation is terminated. The investment registration agency shall notify such termination to related agencies;

c/ In case the operation of the investment project is terminated according to Clause 2, Article 48 of the Law on Investment, the investment registration agency shall decide on termination of the project’s operation and concurrently revoke the investment registration certificate, for investment projects already granted investment registration certificates. The investment registration certificate shall cease to be effective on the effective date of the decision on termination of the operation of the project.

When terminating an investment project, the Investor is required to report to the state authority that granted the investment license. This is an important legal procedure to complete the project’s termination in a lawful manner.

The purpose of the report is to officially inform the regulatory authority of the project’s status. Failure to report, or reporting in violation of regulations, may result in administrative sanctions. In addition, reporting is also a prerequisite for carrying out subsequent steps such as asset liquidation and tax finalization, ensuring the Investor’s rights and compliance with the law.

Terminating the operation of an investment project does not require dissolving the enterprise. These are two independent legal procedures.

  • Terminating an investment project: This only suspends the operation of a specific project registered in the Investment Registration Certificate. The enterprise continues to exist and may undertake other business activities or new projects.
  • Dissolving an enterprise: This completely terminates the enterprise’s existence in the market. Once dissolved, all projects and business activities of the enterprise cease.

An enterprise may have multiple projects, and terminating the operation of one project does not mean that the entire enterprise must be dissolved.

The duration of terminating an investment project depends on various factors such as asset liquidation, labor settlement, and tax finalization. Although the administrative procedure at the state authority usually takes only about 15–20 working days after submitting a complete application, completing the other obligations may take longer. Therefore, detailed planning and strict compliance with legal regulations from the outset are essential to ensure the project is terminated smoothly.

Pursuant to Point dd, Clause 2, Article 15 of Decree 122/2021/ND-CP, an enterprise may be fined VND 30,000,000 to VND 50,000,000 if it fails to send a notification of investment project termination to the investment registration authority within 15 working days from the date of investment project termination.

According to Point b, Clause 2, Article 57 of Decree 31/2021/ND-CP, in cases where an investment project is terminated upon the expiration of its operation term, the investor must notify the investment registration authority and return the Investment Registration Certificate (if any), together with a copy of the document evidencing the termination of the project’s operation, within 15 days from the date of termination.

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If you are in need of a reputable legal consultancy unit, effective and dedicated companion in every legal issue, do not hesitate to contact VPL today!

 

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