Answer: The Government on November 11, 2015 issued Decree 118/2015/ND-CP detailing and guiding the implementation of some articles of the 2014 Investment Law (Decree 118).
Under Decree 118, if foreign investors invest in conditional sectors/areas they must satisfy the conditions for investment such as (i) the percentage of ownership of charter capital in entity; (ii) investment form; (iii) the scope of investment activities; (iv) conditions for the Vietnamese partner participating in the investment; and (v) other conditions prescribed by law.
For the sectors and service subsectors that Viet Nam have not been specified in the Schedule of Commitment of Viet Nam in the WTO and international agreements on other investments that Viet Nam has no legal provision with respect to foreign investment, the investment registration authority (IRA) will consult the Ministry of Planning and Investment and the specialized management ministry for its decision.
Where foreign investors has already been permitted in those business lines, and these lines were also published in the national portal of foreign investment, the IRA will compare the investment operation of foreign investment in those business lines to other investors with similar projects, and come to a decision without consultation of a specialized management ministry again.
In addition, Decree 118 also provides investment policy for investors from those countries and territories that are not WTO members. Accordingly they are also entitled to investment as applied to the States and territories which are members of the WTO, unless the laws and international treaties between Viet Nam and those countries or territories otherwise provide. This is a new advancement of Decree 118 in order to attract investors from countries around the world.
Decree 118 also clarifies the kind of investor which must provide a deposit in cases where the State allocates or leases land and permits conversion of land use purpose to ensure implementation of an investment project, except to cases where investors win a contract or are transferred from projects already in receipt of a deposit or had the land use rights transferred and assets attached to land from other people; and some other cases as specified in Decree 118.
The amount required to be deposited will be in percentage to the capital of the investment project – from 3% to 1% for capital up to VND 300 billion the deposit level is 3%; for capital of over VND 300 billion to VND 1,000 billion, the deposit level is 2%; for capital of over VND 1,000 billion, the deposit level is 1%.
The deposit amount will be refunded by 50% when investors complete the procedure of land allocation, land lease, permission of the conversion of use purpose of land and is receives its license or its otherwise approved as prescribed by law; investors are refunded the remaining deposit amount and interest arising from the deposit at the time of acceptance of work completed according to the schedule as specified in the investment registration certificate or approval certificate./.