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How to modify investment projects and business registration details?

How to modify investment projects and business registration details?
How to modify investment projects and business registration details?

Currently, several investors at the initial stage often invest in basic industries to explore the Vietnamese market, and after a period of operation, those acknowledging Vietnam as a potential market and opt to supplement other industries, capital contribution and other contents to their business. Vietnamese law grants this right to all investors, enabling investors to adjust the registration of their business. For doing so, the investor must adjust the investment project, and the contents of the enterprise’s operation registration. This article shall help investors gain insights into these issues.

1. When should investors carry out procedures for adjustment of investment projects?

In order to facilitate the management of the operation schedule and the effectiveness of the business activities of investors in Vietnam, the law requires investors to carry out procedures for adjusting investment projects at the investment registration agency when there are certain changes to the business.  This is mandatory for both investment projects subject to policy approval and projects that are not subject to approval.

The investment law stipulates that investors must carry out procedures for adjusting investment projects when the following changes arise: adjusting the objectives, transferring part or all of the investment project, merging projects, or splitting, or separating one project into multiple projects, utilizing land use rights and assets on land under investment projects to contribute capital to establish enterprises, or business cooperation. The changes must be registered in compliance with the provisions of law.

The investor shall carry out procedures for adjusting the Investment Registration Certificate when changes to the investment project (e.g: changing the owner of the project) require modifying the Investment Registration Certificate.

Investors whose investment projects have been approved must carry out the procedures for adjusting the investment policies if they fall under one of the following cases:

– Changing the objectives specified in the written approval of investment policy, or supplementing objectives subject to investment policy approval.

– Changing the size of the area of land use by over 10% or by over 30 hectares, or changing the investment location.

– Changes to total investment capital by 20% or more, or changing the size of the investment projects.

– Delaying the implementation of the investment project, or when the time of the project exceeds by 12 months compared to what was specified in the written approval of the first investment policy.

– Adjusting the operating term of the investment project – Investor who wishes to shorten or extend the investment project against the previously approved and certified deadline shall not do so by more than 24 months compared to the duration of the investment project specified in the written approval of the first investment policy. There are certain exceptions to this rule such as: increasing the total investment capital by 20% or more, changing the size of the investment project, changing the objectives specified in the written approval of the investment policy, and supplementing the objectives subject to investment policy approval.

– Technological changes that have been appraised and consulted during the approval of investment policies.

– Changing the investor of the project before the project begins to operate or changing the conditions for investors (if any).

2. Where should the investor apply for adjustment of investment projects?

State agencies that have previously approved the investment policy shall have the authority to approve any adjustments to such investment policies. ‘The Department of Planning and Investment’ shall adjust the ‘Investment Registration Certificate’ for investment projects outside industrial parks, export processing zones, high-tech parks, and economic zones, except for projects implemented at two or more provincial administrative units, or projects implemented in and out of industrial parks, export processing zones, high-tech parks and economic zones, etc.

If adjusting the investment project leads to the investment project falling under a high level authority, such higher authority shall approve the adjustment of the investment policy.

3. Changing the content of business registration

Companies changing the content of business registration must identify the clear cause of such change. If a foreign-invested company changes the contents of the ‘Enterprise Registration Certificate’ without changing the contents of the investment registration, it is necessary to carry out procedures for changing the ‘Business Registration Certificate’ at the ‘Business Registration Office – Department of Planning and Investment’.

The contents that need to be changed may include business names, head office addresses, information of legal representatives, or information related to business lines.

The enterprise is responsible for notifying the change of the contents of the enterprise registration within 10 days from the date of the change.

A joint stock company must notify in writing to the business registration office where the company is headquartered when there are changes to shareholders who are foreign investors registered in the company’s shareholder register. The notice must include the following:

– Name, business registration number, and head office address.

– For shareholders who are foreign investors transferring shares – the name and address of the head office of the shareholder (for organizations), the name, nationality, and contact address of shareholders (for individuals), the number of shares, types of shares and the proportion of ownership of their existing shares in the company, and number of shares and types of transferred shares.

– For shareholders who are foreign investors receiving share transfers – the name and address of the head office of the shareholders (for organizations), the name, nationality and contact address of shareholders (for individuals), number of shares and types of share transfers, number of shares, type of shares and proportion of their respective share ownership in the company.

– Full name and signature of the legal representative of the company.

Changing business registration information is simple and takes only three days. However, enterprises must comply with the notice period of change within 10 days to avoid fines. In some cases, delay could lead to inspection by authorities, which could disrupt the business plan as the processing time of the inspectorate is often extended depending on the nature of the case, and when the case is being inspected, some procedures of the enterprise at the business registration agency are suspended.

The article is based on applicable law at the time noted as above and may no longer be appropriate at the time the reader approaches this article as the applicable law has changed and the specific case that the reader wishes to apply. Therefore, the article is only for reference.