Circular No. 05/2001/TT-BKH guiding the activities of foreign investment by Vietnamese enterprises

CIRCULAR
Guidelines on Overseas Investment Activities of Vietnamese Enterprises

Pursuant to Decree 22/1999/NĐ-CP dated April 14, 1999 of the Government on overseas investment activities of Vietnamese enterprises;

Pursuant to Decree 75/CP dated November 1, 1995 of the Government on the functions, tasks, and powers of the Ministry of Planning and Investment;

The Ministry of Planning and Investment issues this Circular guiding the implementation of overseas investment activities as follows:

Article 1. Scope of Application

1. Vietnamese enterprises eligible for overseas investment under this Circular include:

a) Enterprises established under the Enterprise Law;

b) Cooperatives established under the Cooperative Law;

c) Enterprises established under the Enterprise Law (hereinafter referred to collectively as Vietnamese enterprises).

2. This Circular applies only to Vietnamese enterprises investing overseas in the form of transferring capital in cash or other permitted assets abroad for direct investment as stipulated in Decree 22/1999/NĐ-CP dated April 14, 1999 of the Government.

3. This Circular does not apply to the following cases:

a) Overseas investment by enterprises with foreign invested capital established under the Law on Foreign Investment in Vietnam;

b) Overseas investment by Vietnamese enterprises in the forms of credit lending; purchasing shares; international bidding; and overseas investment in financial, banking, and insurance sectors.

Article 2. Issuance of Overseas Investment License

1. Vietnamese enterprises are only permitted to invest overseas after being issued an Overseas Investment License by the Ministry of Planning and Investment.

2. The issuance of the Overseas Investment License shall be carried out according to the provisions of Article 6 of Decree 22/1999/NĐ-CP dated April 14, 1999 of the Government based on compliance with economic and social development requirements at each period and shall be conducted through one of the following two procedures:

a) Registration for issuance of Overseas Investment License;

b) Examination for issuance of Overseas Investment License.

Article 3. Documents for Registration for Issuance of Overseas Investment License

1. For overseas investment projects where the investor does not belong to the state-owned economic sector and has an investment capital of less than US$1,000,000 as stipulated in Clause 2 of Article 6 of Decree 22/1999/NĐ-CP dated April 14, 1999 of the Government, Vietnamese enterprises shall prepare project documents for registration for issuance of Overseas Investment License to be submitted to the Ministry of Planning and Investment, including the following documents:

a) Application for overseas investment;

b) Copy of the Business Registration Certificate of the enterprise (certified true copy);

c) Approval document for investment issued by the competent authority of the receiving country (if any); contract, agreement with the foreign party regarding the investment project (in the case of joint ventures or other types of investment involving foreign parties).

d) Financial report of the enterprise for the most recent year (audited).

2. The documents for registration for issuance of Overseas Investment License shall be prepared in five sets, of which at least one set must be original. The application for overseas investment shall be made in accordance with Form 1 of Appendix I attached hereto.

3. The Ministry of Planning and Investment shall complete the registration procedure for issuance of Overseas Investment License within fifteen working days from the date of receipt of valid documents.

Article 4. Investment Permit Approval Application Documents

1. For overseas investment projects of state-owned enterprises regardless of scale and purpose, and for other economic sector investment projects with investment capital of US$1,000,000 or more as stipulated in Clause 1, Article 6 of Decree No. 22/1999/ND-CP dated April 14, 1999 of the Government, Vietnamese enterprises shall prepare project application documents according to the overseas investment permit approval process and submit them to the Ministry of Planning and Investment. The project application documents for investment permit approval include the following documents:

a) Overseas investment application form.

b) Copy of the Business Registration Certificate of the enterprise (certified true copy);

c) Explanation of the investment project;

d) Investment approval document issued by the competent authority of the host country (if any); contracts, agreements with foreign parties regarding the investment project (for joint ventures or other types of investments involving foreign parties).

e) Financial report of the enterprise for the most recent one year period (audited).

g) Overseas investment approval document issued by the establishment decision-making body of the enterprise (if it is a state-owned enterprise) or by the provincial People's Committee where the enterprise registers its business (if it is an enterprise belonging to other economic sectors).

2. The investment permit approval application documents shall be prepared in eight sets, including at least one original set. The overseas investment application form and the Explanation of the investment project shall be carried out according to Model 2 and 3 of Appendix I attached to this Circular.

3. The review process and content are regulated in Article 10 of Decree No. 22/1999/ND-CP dated April 14, 1999 of the Government.

Article 5. Amendment and Supplement to Project Application Documents

1. In cases where the project application documents specified in Articles 3 and 4 of this Circular are not valid or complete, within fifteen working days from the date of receipt of the project application documents, the Ministry of Planning and Investment shall issue a document requesting the enterprise to supplement and amend the project application documents.

2. Within thirty working days from the date of receipt of the request for amendment and supplementation, the enterprise shall be responsible for submitting to the Ministry of Planning and Investment the amended and supplemented documents; if the enterprise does not respond with a document or the response does not meet the requirements beyond the aforementioned time limit, the enterprise’s application for issuance of an overseas investment permit shall be deemed to have lost its consideration value.

Article 6. Adjustment of Investment Permit

During the process of overseas investment, Vietnamese enterprises investing abroad may request the Ministry of Planning and Investment to adjust the terms stipulated in the Investment Permit to be consistent with the overseas investment activities in the following cases:

a) There is a change in the overseas investment objectives;

b) Expansion of the scale of overseas investment;

c) Transfer of overseas investment capital.

Article 7. Process for Adjusting Investment Permit

1. Vietnamese enterprises investing abroad must prepare adjustment application documents for the Investment Permit including the following documents:

a) Application for adjustment of Investment Permit;

b) Explanation of reasons and contents of adjustment.

c) Report on the operation of overseas investment up to the time of adjustment of the Investment Permit.

2. The adjustment application documents for the Investment Permit shall be prepared in three sets, including at least one original set. The adjustment application documents for the Investment Permit shall be carried out according to Model 4 and 5 of Appendix I attached to this Circular.

Article 8. Registration to implement the project

1. Within sixty days from the date the investment project of the enterprise is approved according to the laws of the receiving country, the enterprise must submit a copy of the approval decision (or equivalent documents) to the Ministry of Planning and Investment and report on the registration to implement the project.

2. The contents of the report on the registration to implement the project include:

a) Name and main office address of the enterprise; branch offices and representative offices (if any);

b) Objectives and business sectors;

c) Registered capital of the company; the portion of capital contributed by Vietnamese enterprises;

d) Full name and permanent residence address of the representative of the Vietnamese enterprise abroad and the representative of the enterprise in Vietnam.

3. When changes occur in the above contents, the Vietnamese enterprise must re-register with the Ministry of Planning and Investment within thirty working days from the date of change.

4. The Ministry of Planning and Investment shall be responsible for sending copies of the Investment License and copies of the report on the registration to implement the project to the tax authority, Bank, and relevant economic and technical management agencies to carry out state management within their respective functions.

5. Within six months from the date of issuance of the Overseas Investment License, if the investment project is not approved by the receiving country or the project does not commence operations, the enterprise must report to the Ministry of Planning and Investment. Depending on specific circumstances, if there is a basis to determine that the reasons for non-commencement or non-approval by the receiving country are not objective, the Ministry of Planning and Investment will issue a decision to revoke the Investment License and notify this decision to the agencies mentioned in Clause 4 of this Article.

In cases of justifiable reasons, the enterprise must report to the Ministry of Planning and Investment to request an extension and must obtain the approval of the Ministry of Planning and Investment.

Article 9. Reporting System

1. Vietnamese enterprises investing abroad must comply with the periodic reporting system as stipulated in Article 17 of Decree No. 22/1999/NĐ-CP dated April 14, 1999, of the Government.

2. If necessary, the Ministry of Planning and Investment may require Vietnamese enterprises investing abroad to report on their investment activities overseas.

3. The report on the situation of investment activities of the enterprise is prepared according to Appendix II attached to this Circular.

Article 10. Termination of Overseas Investment Activities

1. Vietnamese enterprises terminate overseas investment activities in the following cases:

a) The Vietnamese enterprise terminates the overseas investment project according to Article 15 of Decree No. 22/1999/NĐ-CP dated April 14, 1999, of the Government;

b) The enterprise established abroad is dissolved or declared bankrupt according to foreign laws;

c) The Vietnamese enterprise fails to comply with the registration implementation reporting system and operational reporting requirements as stipulated in this Circular.

2. In these cases, the Ministry of Planning and Investment issues a decision to terminate overseas investment activities, revokes the Investment License, and notifies relevant agencies.

Article 11. Awards and Handling of Violations

1. Vietnamese enterprises investing abroad and individuals with outstanding achievements in overseas investment activities are awarded according to the provisions of the law.

2. Handling of violations in overseas investment activities is carried out according to the provisions of Article 19 of Decree No. 22/1999/NĐ-CP dated April 14, 1999, of the Government, this Circular, and other relevant provisions of Vietnamese law.

Article 12. Implementation Provisions

1. This circular shall take effect 15 days after the date of signature.

2. Investment projects abroad granted an Investment License before the effective date of this Circular must immediately implement the registration to implement the project as stipulated in Article 8 of this Circular with the Ministry of Planning and Investment.

3. During the implementation of overseas investment projects and the execution of this Circular, if there are difficulties, the enterprise should promptly reflect them to the Ministry of Planning and Investment for review and appropriate adjustments, if necessary.