What are the procedures for establishing a project-operating enterprise? In what cases is a business required to have an investment registration certificate?

Why establish a project enterprise?

According to Clause 10, Article 4 of the 2013 Bidding Law (Amended and supplemented by Point c, Clause 1, Article 99 of the Law on Investment in a parallel manner). Public-Private Partnership 2020) regulations on project enterprises are as follows:

“Article 4. Interpretation of terms

10. A project enterprise is an enterprise established by an investor to carry out an investment project using land.”

Accordingly, investors who want to carry out investment projects using their own land must establish a project enterprise.

What are the procedures for establishing a project enterprise?

According to current law, there is no separate process for establishing a project enterprise, but it is still established according to the provisions of general enterprise law. Specifically, Article 26 of the Law on Enterprises 2020 stipulates the order and procedures for establishing an enterprise as follows:

“Article 26. Order and procedures for business registration

1. The business founder or authorized person shall register the business with the Business Registration Authority in the following manner:

a) Register the business directly at the Business Registration Office;

b) Register the business via postal services;

c) Business registration via electronic information network.

2. Business registration via electronic information network is when a business founder submits a business registration application via electronic information network at the National Business Registration Portal. The application for business registration via electronic information network includes data as prescribed by this Law and is presented in electronic document form. Electronic business registration documents have the same legal value as paper business registration documents.

3. Organizations and individuals have the right to choose to use digital signatures in accordance with the law on electronic transactions or use business registration accounts to register businesses via electronic information networks.

4. Business registration account is an account created by the National Business Registration Information System, issued to individuals to register a business via the electronic information network. The individual who is granted a business registration account is responsible before the law for the registration and use of the business registration account to register a business via the electronic information network.

5. Within 03 working days from the date of receipt of the dossier, the Business Registration Authority is responsible for reviewing the validity of the business registration dossier and issuing the business registration; In case the dossier is not valid, the Business Registration Authority must notify in writing the content that needs to be amended or supplemented to the business founder. In case of refusal to register a business, it must be notified in writing to the business founder and clearly state the reason.

6. The Government regulates documents, order, procedures, and connections in business registration.”

In what cases is an enterprise required to have an investment registration certificate?

Pursuant to Article 37 of the Law on Investment 2020 stipulates the following cases of carrying out procedures for issuance of Investment Registration Certificates:

“Article 37. Cases of carrying out procedures for issuance of Investment Registration Certificate

1. Cases where procedures for issuance of an Investment Registration Certificate must be carried out include:

a) Investment projects of foreign investors;

b) Investment projects of economic organizations specified in Clause 1, Article 23 of this Law.

2. Cases where procedures for issuance of an Investment Registration Certificate are not required include:

a) Investment projects of domestic investors;

b) Investment projects of economic organizations specified in Clause 2, Article 23 of this Law;

c) Investment in the form of capital contribution, share purchase, purchase of capital contribution of economic organizations.

In addition, Article 23 of the Law on Investment 2020 regulates the implementation of investment activities of foreign-invested economic organizations as follows:

“Article 23. Implementation of investment activities of economic organizations with foreign investment capital

1. Economic organizations must meet the conditions and carry out investment procedures as prescribed for foreign investors when investing in establishing other economic organizations; Investing in capital contribution, purchasing shares, purchasing capital contributions from other economic organizations; Invest in the form of a BCC contract if the economic organization falls into one of the following cases:

a) There are foreign investors holding more than 50% of charter capital or the majority of partners are foreign individuals for economic organizations that are partnerships;

b) There are economic organizations specified in Point a of this Clause holding more than 50% of charter capital charter;

c) There are foreign investors and economic organizations specified in point a of this clause holding more than 50% of the charter capital.”

From the above legal basis, it can be seen that members of that project enterprise are not required to have an Investment Registration Certificate. Because according to the provisions of the Law on Investment 2020, only in the following cases is an Investment Registration Certificate required.