PART 1: SPECIAL MECHANISMS OF LAW ON PLANNING, LAW ON INVESTMENT
On November 29th, 2024, The National Assembly passed the Law on amendment, supplementation of the Law on Planning, the Law on Investment, the Law on PPP Investment, and the Law on Bidding (“Law No. 57) that has several notable changes in order to create more open mechanisms for investment activities, thereby better mobilizing resources for country’s construction and development. In this article, ATA will present to our valued clients
Part 1: Special Mechanism of the Law on Planning and Investment.
1. Amendments and supplements of the Law on Planning 2017: special mechanism on adjustment of planning under simplified procedures
Law No. 57 amends fundamental regulations allowing adjustment of national-level planning, regional planning and provincial planning under simplified procedures if based on any of the following grounds:
a) Implementation of resolutions of the National Assembly, the National Assembly Standing Committee, or the Government on ensuring national defense and security, organization of administrative units, national important projects which causes changes of one or more criteria of such planning;
b) Such planning conflicts with planning approved by higher level competent authority;
c) Such planning conflicts with planning approved by same level competent authority;
d) Implementation of urgent projects or tasks causing changes of one or more criteria of such planning under regulations of the Government.
In case that adjustments under simplified procedures are required due to conflicts with higher-level or same-level planning, regional and provincial planning are no longer required approval of the Government or the Prime Minister. Instead, the Government and Prime Minister only consider and approve the "adjustment policy", such authority, for approval of adjusted planning in such cases, is transferred to Ministers and chairman of Provincial People's Committees. Essentially, this regulation creates a more open and favorable mechanism for planning adjustments to quickly resolve conflicts between different planning.
2. Amendments and supplements to the Law on Investment 2020: special mechanisms for special investment procedures
2.1. Attracting investment in priority development fields through special investment procedures
To facilitate investment attraction in priority development areas, Law No. 57 allows projects in industrial zones, export processing zones, high-tech zones, IT concentrated zones, free trade zones, and functional areas within economic zones to operate in the following fields:
- Investment in building innovation centers, research and development (R&D) centers; investment in the semiconductor integrated circuit industry, technology design, manufacturing components, integrated circuits (ICs), flexible electronics (PEs), chips, and semiconductor materials;
- Investment in high-tech fields prioritized for development, manufacturing of products in high-tech products list as encouraged development under the Prime Minister's decision.
These projects are eligible for registration under special investment procedures. The "special" nature of these procedures is defined as follows:
a) Projects, registered under special investment procedures, are exempt from several processes, such as approval of investment policies, technology expertizing, environmental impact assessment reports, detailed planning, construction permits, and other approvals related to construction and fire safety (before starting construction, investors only need to submit a notification of commencement to the local construction management authorities and the management boards of the industrial zone or economic zone, along with a Construction Investment Technical-Economic Report and the results of its verification by qualified organizations or individuals).
b) The Investment Registration Certificate serves as the basis for leasing land, changing land use purposes, completing administrative procedures, conducting inspections, monitoring, evaluations, handling administrative violations, and managed under State regulations related to the projects.
The special investment procedures under Law No. 57 can be considered one of the most significant and beneficial incentives for businesses compared to current investment policies. These procedures help investors save considerable time and effort in obtaining permits according to regulations of laws, significantly speeding up the investment process. The benefits of these regulations are clear, however, State agencies must enhance monitoring and inspecting to prevent misuse of these investment incentives.
2.2. Authority, for approval of investment policies of projects on construction and business of industrial parks and export processing zones infrastructure, transferred to the Provincial People's Committee.
Previously, the authority, for approval of investment policies of projects on construction and business of industrial parks and export processing zones infrastructure, belongs to the Prime Minister; however, to promote the development of this type of real estate, Law No. 57 transfers the authority for approval of investment policies from the Prime Minister to Provincial People's Committees.
Additionally, to ensure investment stability, Law No. 57 provides transitional principles as follows: From January 15, 2025, eligible documents, on proposal for approval or adjustment of investment policies of projects on construction and business of industrial parks and export processing zones infrastructure, received before this date but not yet resolved shall be handled, based on principles as follows:
- If the project was submitted to the Prime Minister for approval but does not meet the requirements for approval, the Ministry of Planning and Investment shall transfer the project documents, expertizing opinions, and expertizing reports to the Provincial People's Committees for resolving within their authority.
- If the project was not submitted to the Prime Minister, the Ministry of Planning and Investment will transfer project documents, expertizing opinions (if any) to the Provincial People's Committees for resolving under their authority provided by Law No. 57.
2.3. Projects, having 24 months-delayed implementation progress, shall be canceled
The Law on Investment 2020 stipulates that if investors delay project implementation progress and have already been administratively punished but continue to delay, their projects may be suspended. If the suspension sustains without remedy, the competent authority may terminate the project.
Law No. 57’s amendments have more flexible but still tightly controlled approach to handle project having delayed progress. Accordingly, investors’ projects, having delayed implementation progress, shall not immediately considered to be suspended but shall remedy that delay within 24 months (from the regulated implementation progress deadline of such project). After this period, if the delay is still not resolved and the project is not eligible for extension of implementation progress, the project shall be terminated and revoked.
Law No. 57 takes effect from January 15, 2025, except for following cases: (+) BT contracts implementation are paid by land funds or State budget (+) List of Sectors and Trades Subject to Conditional Business Investment will take effect from July 1, 2025.
(To be continued...)
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