Decree No. 78/2007/ND-CP on investment under Build-Operate-Transfer (BOT), Build-Transfer-Operate (BTO), and Build-Transfer (BT) Contract Forms.

 

 

 

 

DECREE

Regarding investment under the Build-Operate-Transfer (BOT), Build-Transfer-Operate (BTO), and Build-Transfer (BT) contract forms,

BOT, BTO, and BT contracts,

THE GOVERNMENT

Pursuant to the Law on Government Organization No. 32/2001/QH10 dated December 25, 2001;

Pursuant to the Investment Law No. 59/2005/QH11 dated November 29, 2005;

Pursuant to the Construction Law No. 11/2002/QH11 dated November 26, 2003;

Pursuant to the Enterprise Law No. 60/QH11 dated November 29, 2005;

Considering the proposal of the Minister of Planning and Investment.

DECREE:

PART I

GENERAL PROVISIONS

Article 1. Scope of application

1. This Decree stipulates the scope, conditions, procedures, formalities, and incentives for projects investing in infrastructure construction carried out under the BOT, BTO, and BT contract forms.

2. The Prime Minister decides on implementing other similar contract forms.

Article 2. Definitions

In this Decree, the following terms shall be understood as follows:

1. The Build-Operate-Transfer Contract (hereinafter referred to as the BOT Contract) is a contract signed between the competent State agency and the Investor to construct and operate infrastructure works within a specified period; at the end of the period, the Investor transfers the work无偿地移交给越南国家。

2. The Build-Transfer-Operate Contract (hereinafter referred to as the BTO Contract) is a contract signed between the competent State agency and the Investor to construct infrastructure works; after completion, the Investor transfers the work无偿地移交给越南国家；the Government grants the Investor the right to operate the work for a specified period to recover the investment capital and profit.

3. The Build-Transfer Contract (hereinafter referred to as the BT Contract) is a contract signed between the competent State agency and the Investor to construct infrastructure works; after completion, the Investor transfers the work to the Vietnamese State; the Government creates conditions for the Investor to implement another project to recover the investment capital and profit or pay the Investor according to the agreement in the BT Contract.

4. "Project Contract" refers to the BOT Contract, BTO Contract, or BT Contract.

5. "Competent State Agency signing the Project Contract" (hereinafter collectively referred to as the Competent State Agency) includes Ministries, ministerial-level agencies, agencies under the Government, Provincial People's Committees (hereinafter collectively referred to as Provincial People's Committees) or subordinate agencies authorized to sign the Project Contract.

6. "Investor" refers to organizations or individuals investing capital in the Project, including:

a) Enterprises established under the Enterprise Law 2005;

b) Business households, individuals;

c) Cooperatives, cooperative federations established under the Cooperative Law;

d) Foreign-invested enterprises already established and operating in Vietnam;

đ) State-owned enterprises established before the Enterprise Law 2005 came into effect;

e) Organizations or individuals from foreign countries, overseas Vietnamese; foreigners permanently residing in Vietnam.

7. "Project" refers to a set of proposals related to the investment in constructing, operating new infrastructure works or renovating, expanding, modernizing, operating, and managing existing works under the BOT, BTO, and BT Contracts as stipulated in this Decree.

8. "Infrastructure Works" refer to works encouraged to be implemented as prescribed in Article 3 of this Decree.

9. "Other Projects" refer to projects implemented by the Investor to recover investment capital and profit, conducted concurrently or after completing the infrastructure works as stipulated in Clause 3 of this Article. Other Projects are carried out in accordance with laws on investment and enjoy incentives as prescribed in this Decree or according to the agreement in the Project Contract.

10. "BOT Enterprise," "BTO Enterprise," "BT Enterprise" (hereinafter collectively referred to as Project Enterprise) is an enterprise established by the Investor in accordance with Vietnamese law to manage and operate the Project. A BOT Enterprise or BTO Enterprise may directly manage and operate the Project works or hire an organization to manage them, provided that the Enterprise bears full responsibility for the management organization.

Article 3. Scope of Project Implementation

1. The Government encourages the implementation of projects for constructing and operating new infrastructure works or renovating, expanding, modernizing, operating, and managing existing works as follows:

a) Roads, bridges, tunnels, and related facilities and utilities;

b) Railways, tramways;

c) Airports, seaports, river ports, ferry terminals;

d) Water supply plants, drainage systems, wastewater treatment plants, waste disposal facilities;

đ) Power plants, power transmission lines;

e) Other infrastructure works as decided by the Prime Minister.

2. The Government protects the ownership rights and other legitimate benefits of Investors implementing Projects as prescribed in this Decree and relevant laws.

3. Investors and Project Enterprises have the right to recover investment capital and profit according to the agreement in the Project Contract.

Article 4. Sources of Project Funding

1. The Investor or Project Enterprise, according to the agreement in the Project Contract, must arrange funding sources to implement the Project. The Government encourages financially capable, technically skilled, and well-managed Investors to mobilize funds to implement the Project.

2. The Investor's own capital for implementing the Project must be mobilized according to the agreed schedule in the Project Contract and must meet the minimum ratio as follows:

a) For Projects with total investment capital under 75 billion VND, the Investor's own capital shall not be less than 30% of the total investment capital of the Project.

b) For Projects with total investment capital from 75 billion VND to under 1,500 billion VND, the Investor's own capital shall not be less than 20% of the total investment capital of the Project;

c) For Projects with total investment capital of 1,500 billion VND or more, the Investor's own capital shall not be less than 10% of the total investment capital of the Project;

3. The investor or Project Enterprise, pursuant to the agreement in the Project Contract, shall have the obligation to mobilize investment capital to implement the Project in accordance with the schedule committed in the Project Contract and shall bear all responsibilities related to changes in the total investment capital, except in cases of force majeure and other cases as stipulated in the Project Contract.

Article 5. Utilizing state capital to participate in contributing capital or supporting the implementation of the Project.

1. Depending on specific circumstances, state capital may be utilized to participate in or support the implementation of the Project in the following forms:

a) State enterprises participating in contributing capital to implement the Project at a ratio not exceeding 49% of the owner's equity of the Investor as provided for in Clause 2, Article 4 of this Decree.

b) The competent state agency constructing ancillary works or organizing compensation and land clearance to support the implementation of the Project. This portion of the support capital shall not be included in the sources of capital for implementing the Project as prescribed in Article 4 of this Decree.

2. The utilization of state capital to support the Project as prescribed in Point b, Clause 1, Article 4 of this Decree shall be carried out under a separate, independent project and must comply with regulations on the management of state capital usage.

3. The utilization of state budget funds for activities within the responsibility of the competent state agency or other obligations stipulated in the Project Contract shall be implemented in accordance with the guidance of the Ministry of Finance.

Article 6. Inter-ministerial Working Group

1. Depending on the needs for negotiating and implementing the Project, the competent state agency may establish an inter-ministerial working group for the BOT Project, BTO Project, or BT Project (hereinafter referred to as the Inter-ministerial Working Group), comprising:

a) A representative of the leadership of the competent state agency serving as the Head of the Group;

b) Representatives of central agencies and local agencies where the Project is expected to be implemented or which are related to the Project;

c) Some independent legal, technical, and financial experts as decided by the competent state agency.

2. The Inter-ministerial Working Group shall have the following tasks:

a) Reviewing the criteria for selecting investors to negotiate the Project Contract as prescribed in Articles 10, 11, and 12 of this Decree;

b) Supporting the competent state agency in negotiating the Project Contract and performing tasks as prescribed in this Decree;

c) Participating in resolving issues arising during the implementation of the Project;

d) Performing other tasks as required by the competent state agency.

3. The duration of operation of the Inter-ministerial Working Group shall be determined by the competent state agency based on the requirements for implementing the Project.

4. The operating expenses of the Inter-ministerial Working Group, including expenses for fulfilling the obligations of the competent state agency as agreed upon in the Project Contract, shall be allocated from the state budget based on the approved budget estimate.

Chapter II

CONSTRUCTION AND ANNOUNCEMENT OF THE PROJECT LIST

Article 7. Construction of the Project List

1. Based on planning, development orientations for the economy and society in each period and the provisions of Article 3 of this Decree, Ministries, ministerial-level agencies, and government agencies (hereinafter collectively referred to as Sector Management Ministries) and provincial People's Committees shall construct and approve the Project List calling for investment under BOT Contracts, BTO Contracts, and BT Contracts in their respective sectors and localities. The Project List shall include the following main contents:

a) Name of the Project;

b) Objectives of the Project;

c) Expected location for implementing the Project;

d) Summary of key technical parameters and estimated total investment capital for implementing the Project;

đ) Name, address, telephone number, and fax number of the competent state agency.

2. The Project List as stipulated in Clause 1 of this Article shall be sent to the Ministry of Planning and Investment, relevant ministries and sectors, and provincial People's Committees where the Project is expected to be implemented to seek opinions.

3. The opinion-seeking documents from the agencies mentioned in Clause 2 of this Article shall clearly state the necessity, objectives, location, designed capacity, estimated investment capital, minimum technical and financial requirements of the Project, recommendations to the competent state agency, and the form of selecting investors to negotiate the Project Contract.

4. The Ministry of Planning and Investment, relevant ministries and sectors, and provincial People's Committees where the Project is expected to be implemented shall provide opinions on the Project List and the issues mentioned in Clause 3 of this Article within thirty working days from the date of receipt of the Project List.

Article 8. Announcement of the Project List

1. After reaching consensus with the relevant agencies mentioned in Clause 4 of Article 7, the ministries, sectors, and provincial People's Committees shall announce the Project List on their respective electronic information websites and publish it in central and local daily newspapers for three consecutive issues.

2. The Project List shall be announced annually and must include the main contents prescribed in Clause 1 of Article 7 of this Decree.

3. Investors may directly contact the competent state agency designated in the Project List to obtain more detailed information about the Project.

Article 9. Preparation and Approval of the Project Proposal

1. On the basis of the Project List announced in Article 8, the competent state agency shall designate domestic or foreign consulting contractors to prepare the Project Proposal and tender documents for selecting investors to negotiate the Project Contract.

2. The Project Proposal shall include the following main contents:

a) The necessity for investment construction, favorable and unfavorable conditions;

b) Estimated capacity, location, construction area, project components, land use requirements;

c) Preliminary analysis and selection regarding technology, technical conditions, supply of materials and equipment, raw materials, energy, services, infrastructure, land clearance and resettlement plans (if applicable), environmental impact, fire prevention, security;

d) Preliminary determination of total investment capital, project implementation period, capital mobilization plan according to progress, and economic and social benefits of the Project.

3. The competent state agency shall review and decide to approve the Project Proposal.

4. The cost of preparing the Project Proposal and tender documents shall be allocated from the state budget. Each year, ministries, sectors, and provincial People's Committees shall proactively budget for the expenses to carry out the tasks stipulated in this Article.

Chapter III

SELECTION OF INVESTORS TO NEGOTIATE

THE PROJECT CONTRACT

Article 10. Tendering to select investors to negotiate the Project Contract

1. Except for the cases provided for in Article 11 and Article 12 of this Decree, the competent State agency must organize open bidding either domestically or internationally to select the Investor to negotiate the Project Contract.

2. The tender dossier shall include the following contents:

a) Instructions for bidders;

b) Minimum technical, commercial, and financial requirements of the Project, evaluation criteria, preferential conditions, taxes, and other conditions;

c) Project proposals;

d) Draft Project Contract including the contents prescribed in Article 15;

đ) Other related documents as decided by the competent State agency.

3. Depending on the scale and nature of the Project, the competent State agency decides the bidding method to select the Investor to negotiate the Project Contract.

4. The Ministry of Planning and Investment shall provide detailed regulations on the tender dossier, bidding methods, procedures, and processes for selecting the Investor to negotiate the Project Contract.

Article 11. Directly Negotiating with the Investor to Sign the Project Contract

Direct negotiation with the Investor to sign the Project Contract may only be carried out when one of the following conditions is met:

1. The competent State agency has conducted prequalification for Investors to negotiate the Project Contract, but only one Investor meets the prequalification requirements.

2. The Project needs to be implemented urgently to meet the urgent demand for infrastructure construction or to ensure the continuity of product or service usage without being able to conduct bidding to select the Investor to negotiate the Project Contract.

3. Other cases as decided by the Prime Minister.

Article 12. Projects Proposed by the Investor

1. The Investor may proactively propose a Project outside the list of Projects published according to the provisions of Article 8 of this Decree and must prepare a Project Proposal.

2. The dossier for the Project Proposal submitted to the competent State agency shall include the following contents:

a) The Project Proposal including the contents prescribed in Clause 2 of Article 9 of this Decree;

b) A document verifying the legal status and financial and technical capacity of the Investor;

c) Other necessary documents for explaining the Project Proposal.

3. In case the Project Proposal is consistent with the approved master plan, the competent State agency shall organize opinions from relevant agencies and decide to approve the Project Proposal according to the procedures stipulated in Clauses 2, 3, and 4 of Article 7 of this Decree. If the Project Proposal does not fall within the approved master plan, the competent State agency shall submit it to the sectoral management ministry for consideration and supplementation of the master plan within its authority or submit it to the Prime Minister for approval to supplement the master plan.

4. The competent State agency shall examine and decide to approve the Project Proposal according to the provisions of Clause 2 of this Article and notify the Investor in writing of the decision to approve or not approve the Project Proposal within 45 working days from the date of receipt of a valid dossier. In case the Project Proposal is approved, the competent State agency shall organize negotiations on the Project Contract with the Investor according to the provisions of Chapter IV of this Decree.

5. In case two or more Investors propose to implement the same Project, the competent State agency shall organize bidding to select the Investor to negotiate the Project Contract according to the provisions of Article 10 of this Decree.

Chapter IV

NEGOTIATING AND SIGNING THE PROJECT CONTRACT

Article 13. Establishing and Approving the Investment Project for Construction

1. After making the decision to select the Investor to negotiate the Project Contract according to the provisions of Article 10, Article 11, or Article 12 of this Decree, the competent State agency shall instruct the Investor to establish the investment project for construction as the basis for negotiation.

2. The investment project for construction shall be established and approved in accordance with the laws on construction. In case the negotiation is successful, the cost of establishing the investment project for construction shall be recorded in the investment capital of the Project.

Article 14. Negotiating and Signing the Project Contract and Related Contracts

1. The competent State agency shall lead the negotiation of the Project Contract and the government guarantee agreement (if any) with the selected Investor. For projects requiring government guarantees, the competent State agency shall submit the guarantee requirements to the Prime Minister for examination and approval before negotiating the Project Contract.

2. Contracts regarding land lease, construction, installation of machinery and equipment, consulting services, inspection, raw material purchase, product and service sale, technical service provision, loan, collateral, mortgage, and other contracts may be negotiated simultaneously with the negotiation of the Project Contract. The competent State agency shall urge the negotiation of related contracts to ensure their compatibility with the Project Contract.

3. The Project Contract and related contracts shall be reviewed concurrently with the issuance of the Investment Certificate according to the provisions of Article 17 of this Decree.

Article 15. Contents of the Project Contract

1. The Project Contract must include the following main contents:

- Name, address, authorized representative of the parties participating in signing the Project Contract;

- Objectives, scope of activities of the Project and other projects; payment method and progress of construction investment capital (for BOT projects);

- Sources of capital, financial capacity, total investment capital, progress of implementing the Project;

- Capacity, technology, and equipment, design requirements, and technical standards of the works; quality standards.

- Provisions on supervision and quality inspection of the works;

- Provisions on protection of natural resources and the environment;

- Conditions for land use, infrastructure works, and auxiliary works necessary for construction and operation;

- Construction progress, operating period of the Project Enterprise, and handover time of the works;

- Rights, obligations of the parties, and commitments of guarantee, risk sharing between the parties signing the Project Contract, measures to handle risks arising from the fault of one of the parties;

- Provisions on price, fees, and revenue (including methods for determining price, fees, and revenue; conditions for adjusting price, fee, and revenue levels).

- Obligation to maintain normal operation of the works;

- Provisions on consulting, inspection, design, equipment, construction, acceptance, operation, and maintenance of the works;

- Technical conditions, operational status, quality of the project at the time of transfer, principles for determining the value of the project, and procedures for transferring the project;

- Conditions regulating the Project Contract;

- Circumstances for terminating the Project Contract before the term and conditions for transferring the Project Contract;

- Methods for resolving disputes between parties to the Project Contract;

- Handling breaches of obligations under the Project Contract;

- Force majeure cases and principles for handling them;

- Provisions regarding support and commitments from government agencies;

- Responsibilities of the Investor and the Project Enterprise in transferring technology and training management and technical skills for operating the project after transfer;

- Effectiveness of the Project Contract;

2. Rights and obligations of the Project Enterprise, the relationship between the Project Enterprise and the Investor shall be agreed upon by the parties in the Project Contract. To confirm these issues, the parties may agree in the Project Contract to implement one of the following methods provided that they comply with all provisions of the Project Contract;

a) The Project Enterprise, after being established in accordance with Article 20 of this Decree, signs the Project Contract to jointly form one party of that Contract with the Investor;

b) The Project Enterprise takes over the rights and obligations of the Investor related to the implementation of the Project. The takeover must be formalized by a written agreement signed among the Project Enterprises, the Investor, and the competent State agency. This document is an integral part of the Project Contract;

3. The parties may agree in the Project Contract on other contents, including the right of the lender to take over part or all of the rights and obligations of the Project Enterprise (hereinafter referred to as the right to take over the Project) in case the Project Enterprise or the Investor fails to fulfill their obligations under the Project Contract or the loan contract, provided that the lender fulfills the corresponding obligations of the Project Enterprise or the Investor stipulated in the Project Contract. The conditions, procedures, and content of implementing the right to take over the Project by the lender must be specified in the loan contract, guarantee document, or other agreements signed between the Project Enterprise or the Investor and the lender and must be approved by the competent State agency;

Article 16. Application of foreign law to regulate the Project Contract relationship;

For Projects with foreign investment capital, the Parties signing the Project Contract, the Parties signing contracts guaranteed by the competent State agency for the performance of the contract as stipulated in Article 38 of this Decree, and the Parties signing other related contracts as agreed in the Project Contract may agree to apply foreign law if such agreement does not contravene the fundamental principles of Vietnamese law;

Article 17. Review and issue Investment Certificate;

1. The Ministry of Planning and Investment shall organize the review and issuance of the Investment Certificate for Projects;

2. The procedure for reviewing and issuing the Investment Certificate shall be carried out as follows:

a) The Investor submits ten sets of documents to the Ministry of Planning and Investment, including at least one original set, for the purpose of review and issuance of the Investment Certificate. The Project dossier includes:

- The Project Contract;

- The construction investment project and other projects (for BT Projects);

- Joint venture contracts and the charter of the Project Enterprise (if applicable);

- Related contracts concerning the implementation of the Project that have been signed or preliminary agreements on purchasing raw materials and selling products (if applicable);

b) Within three working days from the date of receiving valid documents as prescribed in point a, Clause 1 of this Article, the Ministry of Planning and Investment shall seek opinions from relevant Ministries, sectors, and provincial People's Committees;

c) Within fifteen working days from the date of receiving valid documents, the agencies mentioned in point b, Clause 1 of this Article shall provide written comments on the Project;

d) Within fifteen working days from the date of receiving written comments from relevant agencies, the Ministry of Planning and Investment shall issue the Investment Certificate for the Project;

Article 18. Content of the Investment Certificate;

The Investment Certificate shall include the following main contents:

- Name and address of the Investor and the Project Enterprise;

- Registration number and date of the business registration certificate (for investors who have established economic organizations);

- Objectives and location of the Project;

- Total investment capital of the Project;

- Investment incentives and guarantees from the Government (if any) in accordance with the Project Contract;

Article 19. Guaranteeing the fulfillment of obligations under the Project Contract;

1. The Investor must implement measures to guarantee the fulfillment of obligations under the Project Contract in the form of bank guarantees or other security measures as prescribed by civil law. The amount of the guarantee for fulfilling the obligations under the Project Contract must meet the minimum ratio as follows:

a) For Projects with total investment capital of VND 1.5 trillion or more: at least equal to 1% of the total investment capital of the Project;

b) For Projects with total investment capital of VND 75 billion to less than VND 1.5 trillion: at least equal to 2% of the total investment capital of the Project;

c) For Projects with total investment capital of less than VND 75 billion: at least equal to 3% of the total investment capital of the Project;

2. The guarantee for fulfilling the obligations under the Project Contract shall be effective from the date the Project Contract is officially signed until the completion of the construction works;

Chapter V

IMPLEMENTATION OF THE PROJECT;

Article 20. Business registration, establishment, and organizational management of the Project Enterprise;

1. For Projects using domestic investment capital, after completing the procedures as prescribed in Article 17 of this Decree, the Investor shall register for business to establish a Project Enterprise or supplement the business registration certificate (for Investors who have already established economic organizations). The documents, procedures, and process of business registration or supplementary business registration shall be in accordance with the Law on Enterprises;

2. The Investment Certificate issued to foreign Investors in accordance with Article 17 of this Decree shall also serve as the business registration certificate of the Project Enterprise;

3. The organizational structure, powers, and responsibilities of the Project Enterprise shall be determined by the Investor in accordance with the Law on Enterprises, the Law on Investment, and relevant laws.

Article 21. Conditions for Implementing the Project

The competent State agency and the Investor shall agree in the Project Contract on the conditions for implementing the Project.

Article 22. Signing Contracts to Implement the Project

The Project Enterprise shall independently decide on selecting consultants, purchasing goods, construction works, and signing other contracts to implement the Project. The results of the contractor selection must be reported to the competent State agency.

Article 23. Land Preparation for Construction

1. The Project Enterprise shall take the lead, coordinate with the competent State agency and the People's Committee of the province where the Project is implemented to establish a Land Clearance Board according to the plan stated in the approved construction project investment proposal. In special cases, this shall be decided by the Prime Minister.

2. The People's Committee of the province where the Project is implemented shall be responsible for completing the procedures for transferring land or leasing land to implement the Project in accordance with the provisions of the law and the conditions regarding land use committed to in the Project Contract.

3. The costs for compensation and land clearance shall be paid by the Project Enterprise and included in the total investment capital of the Project, except when state budget funds are used to support compensation and land clearance as stipulated at point b, Clause 1, Article 5 of this Decree and if the Project Contract does not provide otherwise.

Article 24. Preparing Technical Design and Commencing Construction Works

The Project Enterprise shall prepare the technical design of the construction works in accordance with the laws on construction and submit it to the competent State agency for supervision and inspection. If the technical design is inconsistent with the approved basic design, the Project Enterprise must present it to the competent State agency for review and decision.

Article 25. Supervising Construction and Acceptance of Works

1. The Project Enterprise may conduct its own supervision or hire an independent consulting organization to supervise construction, inspect individual components, and accept the entire construction work according to the approved design.

2. The hired consulting organization shall be responsible to the Project Enterprise and the law for the quality of the Project construction works.

Article 26. Management and Operation of the Works

The BOT Enterprise, the BTO Enterprise, or the management organization as stipulated in Clause 10, Article 2 of this Decree shall manage and operate the entire works according to the conditions agreed upon in the Project Contract.

Article 27. Price and Service Fees

1. The price and service fees provided by the Project Enterprise shall be determined based on the principle of covering all costs, taking into account market prices, ensuring the interests of the Project Enterprise and users, and must be specified in the Project Contract.

2. The conditions for increasing prices, fees, and revenues must be agreed upon and stipulated in the Project Contract. When adjusting prices, fees, and revenues, the Project Enterprise must notify the competent State agency thirty days in advance. Adjustments to prices, fees of products and services managed by the State, or revenues outside the scope defined in the Project Contract must be approved by the competent State agency.

Article 28. Support for Service Fee Collection

The Project Enterprise shall be provided with every favorable condition to collect the correct and full amount of service fees and lawful revenues from operating the Project works. In necessary cases, the Project Enterprise may request the competent State agency to assist in collecting service fees or other revenues from operating the Project works.

Article 29. Obligation to Provide Services and Operate the Works

The Project Enterprise has the obligation:

1. To treat all legitimate users of the Project Enterprise's products and services equally. It is strictly prohibited to use the operation of the Project works to discriminate against or refuse service to any user.

2. To perform regular maintenance and repair of the works according to the Project Contract, ensuring that the works operate as designed.

3. To supply products and services in quantity and quality as agreed upon in the Project Contract during the business period until the works are transferred.

4. To ensure the continued use of the works in accordance with the conditions stipulated in the Project Contract.

Chapter VI

TRANSFER OF THE WORKS AND TERMINATION OF THE PROJECT CONTRACT

TRANSFER OF THE PROJECT WORKS AND TERMINATION OF THE PROJECT CONTRACT

Article 30. Transfer of the Project Works

1. For BOT Projects, when the business term of the Project works ends as stipulated in the BOT Contract, the investor shall transfer the non-reimbursable Project works and related documents on the exploitation and operation of the works to the State. The assets transferred do not include debts incurred by the Project Enterprise. All financial obligations of the investor and the Project Enterprise towards the State related to the Project must be settled before the transfer date.

2. For BTO or BT Projects, after completion, the investor shall transfer the works to the State according to the conditions stipulated in the BTO Contract or BT Contract and as provided in Articles 32 and 33 of this Decree.

In addition to the conditions stipulated herein, the transfer of BT Project works must comply with the provisions of Clauses 5 and 6, Article 31 of this Decree.

Article 31. Procedures for Handing Over the BOT Project Works

1. One year before the transfer is carried out, the investor must publish in central and local daily newspapers about the transfer of the works to the State, the procedures, formalities, and deadlines for terminating the Contract and settling debts.

2. One year before the transfer deadline specified in the Project Contract, the competent State agency shall organize a quality inspection of the works to determine any damages (if any) and require the Project Enterprise to carry out repairs and maintenance of the works.

3. The competent State agency will only accept the transfer when the works and related equipment and assets for operating the works have been maintained and repaired as agreed in the Project Contract.

4. The investor and the competent State agency shall prepare handover documents as legal basis for the transfer of the works.

5. The investor and the Project Enterprise must ensure that the transferred assets are not used as collateral for financial obligations or pledged to secure other obligations of the Project Enterprise arising before the transfer date.

6. The Project Enterprise shall be responsible for transferring technology and training necessary business operations to the entity assigned by the State to continue operating the project facility.

7. The Project Enterprise shall be responsible for fulfilling warranty and regular maintenance obligations to ensure that the technical conditions for normal operation of the project facility comply with the requirements of the Project Contract.

Article 32. Conditions for handing over the project facility

When handing over the project facility, the competent state agency and the Investor must examine whether the transfer conditions stipulated in the Project Contract are met, including the following issues:

1. The status of the project facility at the time of transfer;

2. The list of assets to be transferred, including documents related to surveying, design, construction, installation, operation, maintenance, and management of the project facility;

3. Documentation appraising the value and quality of the transferred project facility;

4. The responsibilities of the parties regarding the continued operation of the transferred project facility;

5. The timeframe and conditions for maintenance and warranty of the project facility after transfer;

6. Environmental protection conditions;

7. Contracts and other necessary conditions to maintain and operate the project facility after transfer.

Article 33. Acceptance and utilization of the project facility after handover

1. The competent state agency shall accept the transfer of the project facility according to the conditions stipulated in the Project Contract and prepare the receiving mechanism so that the project facility can operate normally after transfer.

2. The competent state agency may assign the project facility to a business entity with sufficient management and technical capacity to continue managing and operating it.

Article 34. Effectiveness of the Project Contract

1. The Project Contract ceases to be effective upon expiration of the agreed term in the Contract.

2. The Project will cease operations and the Investor shall bear all responsibilities under the Project Contract if the construction of the project facility does not commence within the agreed timeframe, except where the Project Contract provides otherwise.

Chapter VII

INVESTMENT INCENTIVES AND GUARANTEES FOR THE INVESTOR AND THE PROJECT ENTERPRISE

AND PROJECT ENTERPRISES

Article 35. Tax incentives

1. The BOT Enterprise and the BTO Enterprise shall enjoy corporate income tax incentives as prescribed for projects in special investment priority sectors. These tax rate incentives shall apply throughout the duration of the Project.

2. The Project Enterprise and subcontractors shall be exempt from import duties to implement the Project in accordance with laws on export and import taxes.

3. Intellectual property rights holders, trade secrets, technological processes, and technical services during the implementation of the Project shall be exempt from taxes related to technology transfer and royalty income.

4. In addition to the tax incentives mentioned in Clauses 1, 2, and 3 of this Article, the Investor and the Project Enterprise shall pay other types of taxes as prescribed by law.

5. Tax incentives for other Projects implemented by the Investor to recover capital invested in the BT Project shall be applied in accordance with this Article or as agreed in the Project Contract, consistent with laws on investment and relevant laws, taking into account the capital recovery period of the BT Project and the profitability potential of other Projects.

Article 36. Taxes for contractors participating in the Project

1. Foreign contractors (if any) participating in the Project shall pay various taxes and enjoy exemptions and reductions in taxes as prescribed by laws applicable to foreign contractors.

2. Vietnamese contractors shall fulfill their tax obligations in accordance with laws applicable to Vietnamese enterprises.

Article 37. Land use incentives

The Project Enterprise shall be exempt from land use fees for the area of land allocated by the State or from land rental fees throughout the duration of the Project.

Article 38. Guarantee of the Investor's and the Project Enterprise's obligations and those of other enterprises

In cases deemed necessary, depending on the nature of the Project, the Government may designate a competent authority to guarantee loans, provide raw materials, purchase products, and other contractual obligations for the Investor, the Project Enterprise, or other enterprises participating in the Project as specified in the Project Contract, and guarantee the obligations of state-owned monopoly enterprises selling raw materials, purchasing products, and services from the Project Enterprise.

Article 39. Right to mortgage assets

1. During the implementation of the Project, the Project Enterprise may pledge or mortgage assets and land use rights in accordance with the law.

2. The pledging or mortgaging of assets by the Project Enterprise must be approved by the competent state agency and must not affect the objectives, progress, and activities of the Project as stipulated in the Project Contract, in compliance with the law.

Article 40. Right to purchase foreign currency

1. During the construction and operation of the project facility, the Investor or the Project Enterprise may purchase foreign currency from authorized financial institutions to meet current transactions, capital transactions, and other transactions as prescribed by foreign exchange management laws, including:

a) Payment for leasing equipment and machinery from abroad;

b) Importation of machinery, equipment, and other products and services to implement the Project;

c) Repayment of foreign debts (including principal and interest);

d) Repayment of bank loans denominated in foreign currency for the importation of machinery, equipment, and other products and services to implement the Project;

e) Transfer of capital, profits, proceeds from liquidation of investments, payments for provision of technology, services, intellectual property, and other lawful income to foreign countries (applicable to foreign investors).

2. The Government shall ensure balance or support balance of foreign currency for energy projects, transportation infrastructure construction, and waste treatment projects.

Article 41. Assurance of public service provision

1. The Project Enterprise may use land, roads, and other auxiliary facilities to implement the Project in accordance with the law.

2. In cases of scarcity of public services or restrictions on the use of public facilities, the Project Enterprise shall be given priority in providing services or obtaining the right to use public facilities to implement the Project.

3. The competent state agency shall be responsible for supporting the Project Enterprise in completing the necessary procedures and documents to be granted priority in using services and public works.

Article 42. Dispute Resolution

1. For Projects funded with domestic capital, disputes between the competent state agency and the Investor or the Project Enterprise, and disputes between the Project Enterprise and economic organizations participating in the implementation of the Project, which are guaranteed by the competent state agency to fulfill the obligations under Article 38 of this Decree, shall first be resolved through negotiation and mediation. In cases where disputes cannot be resolved through negotiation and mediation, the parties may bring the dispute to arbitration or the Vietnamese court according to Vietnamese law.

2. For Projects funded with foreign capital, disputes shall first be resolved through negotiation and mediation. If disputes cannot be resolved through negotiation and mediation, the parties may resolve disputes according to the following provisions:

a) Disputes between the competent state agency and the foreign Investor or the Project Enterprise shall be resolved through arbitration or the Vietnamese court, except where otherwise agreed upon in the Project Contract.

b) Disputes between the Project Enterprise and foreign organizations or individuals or with Vietnamese economic organizations, or disputes among foreign Investors shall be resolved in accordance with Clause 3 of Article 12 of the Investment Law.

Article 43. Capital and Asset Guarantee

1. The investment capital and lawful assets of the Investor shall not be nationalized or confiscated by administrative measures.

2. In cases where it is necessary to compulsorily purchase or requisition the assets of the Investor as provided for in Article 6 of the Investment Law, the State shall ensure payment or compensation for the assets and capital of the Investor at market value or by other means as agreed upon.

Chapter VIII

IMPLEMENTING PROVISIONS

Article 44. Effectiveness

This Decree shall take effect fifteen days from the date of publication in the Official Gazette and shall replace the following Decrees:

1. Decree No. 77/CP dated June 18, 1997 of the Government promulgating regulations on investment under the Build-Operate-Transfer (BOT) contract form applicable to domestic investment;

2. Decree No. 62/1998/NĐ-CP dated August 15, 1998 of the Government promulgating regulations on investment under BOT, Build-Transfer-Operate (BTO), and Build-Transfer (BT) contracts applicable to foreign investment in Vietnam;

3. Decree No. 02/1999/NĐ-CP dated January 27, 1999 of the Government amending and supplementing certain provisions of the regulations on investment under BOT, BTO, and BT contracts applicable to foreign investment in Vietnam.

Article 45. Investment projects related to the provisions at Amendment 1:2025 QCVN 07:2023/BXD issued accompanying this Circular that have been approved before this Circular takes effect shall continue to be implemented according to the regulations at the time of approval; the investment decision maker has the right to choose to apply Amendment 1:2025 QCVN 07:2023/BXD issued accompanying this Circular.

1. Project Enterprises funded with domestic capital established before the effective date of this Decree shall not need to re-register for business operations.

2. Project Enterprises funded with foreign capital established before the effective date of this Decree may choose to re-register or not to re-register in accordance with Clause 2 of Article 170 of the Enterprise Law and related provisions. Re-registration shall not affect the commitments made in the Project Contract.

3. Projects that have been granted Investment Licenses prior to the effective date of this Decree shall not need to reapply for Investment Certificates unless requested by the investor.

4. Investors who signed Project Contracts before the effective date of this Decree and have not yet been granted Investment Licenses or Investment Certificates shall not need to amend the Project Contracts but must complete the procedures for obtaining Investment Certificates in accordance with this Decree.

Article 46. Implementation

1. The Ministry of Planning and Investment shall take the lead and coordinate with relevant ministries and sectors to guide the implementation of this Decree.

2. Ministers, Heads of ministerial-level agencies, Heads of agencies under the Government, Chairpersons of People's Committees of provinces and centrally governed cities within their respective functions and powers shall be responsible for implementing this Decree./.