Procedures to ensure the implementation of investors’ projects according to legal regulations

Is there a conflict between the provisions of the Investment Law and Decree 31/2021/ND-CP regarding deposit obligations or is there a guarantee for deposit obligations?

1. Regulations on ensuring investment project implementation?

Pursuant to Article 43 of the Law on Investment 2020, ensuring the implementation of investment projects is regulated as follows:

– Investors must deposit or have a bank guarantee on deposit obligations to ensure the implementation of investment projects that require the State to allocate land, lease land, or allow change of land use purpose, except in the following cases:

+ The investor who wins the auction for land use rights to implement an investment project is allocated land by the State with collection of land use fees, and leases land with a one-time land rental fee for the entire lease period;

+ The investor wins the bidding to implement an investment project using land;

+ Investors are allocated or leased land by the State on the basis of receiving transfer of investment projects that have made deposits or have completed capital contributions and capital mobilization according to the schedule specified in the investment policy approval document and Investment Registration Certificate;

+ Investors are allocated or leased land by the State to implement investment projects on the basis of receiving transfer of land use rights and assets attached to land from other land users.

– Based on the scale, nature and implementation progress of each investment project, the deposit level to ensure investment project implementation ranges from 01% to 03% of the investment project’s investment capital. In case an investment project includes many investment stages, the deposit amount is paid and refunded according to each stage of investment project implementation, except in cases where it is not refundable.

Specifically, this issue is guided in Article 25 of Decree 31/2021/ND-CP, ensuring the investor’s project implementation is carried out as follows:

Except for the cases specified in Points a, b, c and d, Clause 1, Article 43 of the Law on Investment, investors must deposit or have a guarantee from a credit institution or foreign bank branch established under Vietnamese law (hereinafter referred to as credit institutions) on deposit obligations to ensure the implementation of investment projects for which the State allocates land, leases land, or allows change of use purpose. land.

– In case of guaranteeing the deposit obligation, the credit institution is responsible for paying the deposit amount that the investor must pay in the case specified in Clause 10, Article 26 of this Decree.

– The contract for guaranteeing the deposit obligation between the credit institution and the investor is signed and implemented in accordance with the provisions of civil, credit, bank guarantee and relevant laws. quan.

2. Regulations on procedures to ensure investor’s project implementation?

Pursuant to Article 26 of Decree 31/2021/ND-CP, procedures to ensure investor’s project implementation are prescribed as follows:

The investor’s obligation to ensure project implementation according to the provisions of Clause 1, Article 25 of this Decree is implemented on the basis of written agreement between the investment registration agency and the investor. The agreement to ensure the implementation of an investment project includes the following main contents:

– Project name, objectives, location, scale, investment capital, implementation progress, and operating term of the investment project according to the provisions of the Decision approving the investment policy, the Decision approving the investment policy concurrently with the investor’s approval or the Investment Registration Certificate;

– Documents method to ensure the implementation of investment projects (deposit or guarantee deposit obligations according to the provisions of Clause 1, Article 25 of this Decree);

– The amount of security for implementation of investment projects is determined according to the provisions of Clauses 2, 3 and 4 of this Article;

– Time and duration of guarantee for implementation of investment projects as prescribed in Clauses 5, 6 and 4. 7 This Article;

– Conditions for refund, adjustment, termination of investment project implementation guarantee as prescribed in Clause 9 of this Article;

– Handling measures in cases specified in Clause 10 of this Article;

– Other rights, obligations and responsibilities of the parties related to the content specified in Points a, b, c, d, dd and e of this clause;

– Other contents as agreed between the parties but not contrary to the provisions of the Investment Law, this Decree and relevant laws.

3. Are there any conflicts between the provisions between the Investment Law and Decree 31/2021/ND-CP on deposit obligations or having guarantees on deposit obligations?

Based on the answer in subsection 57, section I, Appendix issued with Official Dispatch 2541/CV-TCT dated April 18, 2022, stipulating that investors do not have to deposit deposits or have bank guarantees deposit obligations in case an investor wins an auction for land use rights to carry out an investment project and is allocated land by the State with land use fees collected, or leases land with a one-time land rent payment for the entire lease period.

Therefore, in the case of an investor who wins an auction for land use rights to carry out an investment project and is leased land by the State with annual land rent payment, it is still subject to a deposit to ensure project implementation. Clause 5, Article 26 of Decree No. 31/2021/ND-CP stipulates that investors must perform escrow obligations or submit a credit institution’s guarantee certificate on escrow obligations after the decision to approve the auction winning results is in accordance with the provisions of Clause 1, Article 43 of the Investment Law mentioned above.