Can a branch become an investor to implement an investment project according to the law?

Does the branch have legal status? What is an investment project?

Does a branch have legal status?

Pursuant to Article 84 of the 2015 Civil Code regulating branches and representative offices of legal entities:

Branch, representative office of legal entity

1. Branches and representative offices are dependent units of legal entities, not legal entities.

2. The branch is responsible for performing all or part of the functions of the legal entity.

3. Representative offices have the responsibility to represent within the scope assigned by the legal entity, protecting the interests of the legal entity.

4. The establishment and termination of branches and representative offices of legal entities must be registered in accordance with the law and announced publicly.

5. The head of the branch or representative office performs tasks authorized by the legal entity within the scope and time limit of authorization.

6. Legal entities have civil rights and obligations arising from civil transactions established and performed by branches and representative offices.

Accordingly, the branch is a dependent unit of the enterprise and has no legal status.

What is an investment project?

According to the provisions of Clause 4, Article 3 of the Law on Investment 2020:

An investment project is a collection of proposals to invest medium-term or long-term capital to conduct business investment activities in a specific area, within a specified period of time.

Additionally:

An expansion investment project is an investment project that develops an active investment project by expanding scale, increasing capacity, innovating technology, reducing pollution or improving the environment.

A new investment project is an investment project implemented for the first time or an investment project independent of an active investment project.

A creative startup investment project is an investment project that implements ideas based on exploiting intellectual property, technology, new business models and has the ability to grow rapidly.

Can a branch become an investor to implement an investment project according to the provisions of law?

Currently, there are no clear regulations on whether a branch can become an investor to implement a project or not.

However, according to the provisions of Clause 18, Article 3 of the Law on Investment 2020, investors are organizations and individuals carrying out business investment activities, including domestic investors, foreign investors and economic organizations with foreign investment capital.

Investor is defined in Clause 2, Article 4 of the 2023 Bidding Law as an agency or organization that owns capital, borrows capital or is assigned to directly manage, use capital, and manage the project implementation process; budget-using unit; Estimating units directly use procurement estimates outside the state budget; centralized purchasing unit.

At the same time, Clause 21, Article 3 of the 2020 Investment Law stipulates that economic organizations are organizations established and operating in accordance with Vietnamese law, including enterprises, cooperatives, cooperative unions and other organizations carrying out business investment activities.

From there, it can be seen that the branch is a dependent unit of the enterprise and has no legal status.

Therefore, the branch cannot be independent in exercising the rights and obligations of investors, nor can it be responsible for established transactions.

Therefore, it can be understood that a branch cannot become an investor or owner of an investment project according to regulations.

When are investors suspended, stopped, or terminated from business investment activities?

Pursuant to Article 5 of the 2020 Investment Law on policies on business investment:

Policies on business investment

1. Investors have the right to conduct business investment activities in industries and occupations that are not prohibited by this Law. For conditional business investment industries and professions, investors must meet business investment conditions according to the provisions of law.

2. Investors are allowed to make their own decisions and take responsibility for their investment and business activities according to the provisions of this Law and other relevant laws; to access and use credit sources, support funds, and use land and other resources in accordance with the law.

3. Investors may suspend, stop or terminate business investment activities if these activities cause harm or have the risk of harming national defense and security.

4. The State recognizes and protects ownership of assets, investment capital, income and other legal rights and interests of investors.

5. The State treats investors equally; have policies to encourage and create favorable conditions for investors to carry out business investment activities and sustainably develop economic sectors.

6. The State respects and implements international treaties on investment to which the Socialist Republic of Vietnam is a member.

Thus, investors are suspended, stopped, or terminated from business investment activities if these activities cause harm or have the risk of harming national defense and national security.