On 17 July 2020, the National Assembly of Vietnam issued Investment Law No. 61/2020/QH14 which will replace the current Investment Law No. 67/2014/QH13 of 26 November 2014 as of 1 January 2021.
Please run through key changes in bullet points as follows.
- Prohibition of ‘debt collection’ services and, still, the highly controversal prostitution; addition and removal of some conditional business activities (Article 6 and 7).
- First time introduction of negative approach to foreign investment (Article 9).
- Addition of special investment incentives (Article 20).
- The change of control threshold, which is employed to determine ‘foreign investor’ status of a Vietnam-based company, is reduced from less than 51% to more than 50% (Article 23).
- Tigher control of M&A in projects at sensitive areas such as islands, border areas or coastal areas (Article 26).
- For land-related projects, no auction or bidding requirements in case of industrial zone development projects; or the investors’ having land use rights or acquired land by way of receipt transfer, capital contribution or lease (Article 29).
- Projects of VND500 billion (approx. US$21.5 mil) no longer subject to in-principle approval of the Prime Minister (Article 31).
- During in-principle approval licensing process, only the preliminary environmental impact assessment is required (Article 33);
- In-principle approval must be sought again if, among others, land area increases by 10% or more or over 30 hectares; or investment capital increases by 20% or more (Article 41).
- Changes of investment schedules must not exceed 24 months against the initially-approved schedules.
- Land-related projects can be secured by either deposit placement or bank guarantees (Article 43).
- Extention of project’s lifespan is possible (Article 45).
- Investment projects can be forcefully terminated if it is deemed to be made on ‘fabricated’ transaction’s basis i.e. – a transaction that is created in order to hide another real transaction.