Approval for investment guidelines is when a competent authority approves the objectives, location, scale, schedule, and duration of a project; investor or form of selection of investor and special mechanisms or special policies (if any) to execute an investment project.
Approving an investment policy is, therefore, a preliminary approval of the intention and direction of implementing an investment project with the following content:
– Project objectives, location, scale, progress, and duration;
– Investor or investor selection form;
– special policies (if any) to execute an investment project
A competent State agency must grant such authorization and each type of investment project has a different investment policy approval agency depending on the field and size of the project.
1. The project must apply for investment guidelines of the National Assembly
The National Assembly grants approval for investment guidelines of the following investment projects:
1.1. Investment projects with significant or potentially significant environmental consequences, such as:
a) Nuclear power plants;
b) Projects requiring the repurposing of land for special-use forests, headwater protection forests, or border protection forests of at least 50 hectares; sand-fixing and windbreak coastal forests or protection forests for wave prevention of at least 500 hectares; and production forests of at least 1,000 hectares.
1.2. Investment projects requiring the repurposing of land previously used for wet rice farming and requiring the planting of two or more crops totaling at least 500 hectares;
1.3. Investment projects involving the transfer of 20,000 or more people in hilly areas or 50,000 or more people in other locations;
1.4. Investment projects that necessitate the use of a unique procedure or policy, which must be approved by the National Assembly
2. The project must apply for investment guidelines of the Prime Minister
The Prime Minister must approve the investment guidelines for the following projects (listed below), with the exception being for those in which applications must be made to the National Assembly:
2.1. Investment projects – regardless of capital sources – in any one of the following cases:
a) A relocation requirement of 10,000+ persons in mountainous areas or 20,000+ persons in other areas;
b) Construction of: airports and aerodromes; airport runways and aerodromes; international passenger terminals; airport cargo terminals and aerodromes with a capacity of at least 1-million tons per year;
c) New investment projects on passenger air transport businesses;
d) Construction of ports and wharves of special seaports; ports and wharves involving an investment of at least 2.3 -billion VND within the category of Class I seaports;
d1) Petroleum processing;
e) Gambling and casino services – excluding businesses involving prize-winning electronic games for foreigners;
g) Construction of residential housing (for sale, lease, or lease purchase) and urban areas requiring at least 300-hectares of land or with a population of at least 50,000 people;
g1) Investment projects regardless of the area of land used or population within the safety perimeter of level I relics recognized by the competent authority as national and special national relics; or within the safety perimeter of level II relics recognized by the competent authority as special national relics under the World Heritage List;”.
h) Construction and operation of infrastructure in industrial zones and export processing zones.
2.2. Foreign investors’ investment projects in the following fields: provision of telecommunications services with network infrastructure; afforestation; publication, press;
2.3. Investment projects which at the same time fall within the power of at least two provincial People’s Committees to grant approval for investment guidelines;
2.4. Miscellaneous investment projects subject to approval for their investment guidelines or subject to investment decision by the Prime Minister as prescribed by law.
3. The project must apply for investment guidelines of provincial People
3.1. With the exception of investment projects applying for investment guidelines of the National Assembly and the Prime Minister, the provincial People’s Committees grant approval for investment guidelines of the following investment projects:
a) Those that request the State to allocate or lease out land without auction or bidding for or receipt of land use rights, as well as investment projects that request permission to repurpose land – except for circumstances concerning allocation, lease or permission for repurposing of land of households or individuals not subject to the written approval by the provincial People’s Committee in accordance with the regulations of law on land;
b) Those involving construction of residential housing (for sale, lease, or lease purchase) and urban areas that use less than 300-hectares of land or with a population of less than 50,000 people;
b1) Those, regardless of the area of land used or population within the safety perimeter of level II relics recognized by the competent authority as national and special national relics; except for the special national relics under the World Heritage List; investment projects regardless of the area of land used or population within a restricted development area or within a historic inner area (determined in accordance with urban area planning projects) of a special urban area;
c) Investment in golf course construction and business;
d) Those of foreign investors and foreign-invested business organizations executed on islands or in border or coastal communes; in other areas affecting national defense and security.
3.2. The investment guidelines of investment projects in Points a, b and d Clause 3.1 executed in industrial parks, export-processing zones, hi-tech zones, and economic zones – conforming with planning approved by competent authorities – must be approved by management boards of such industrial parks, export-processing zones, hi-tech zones, and economic zones.
Why is approval for investment guidelines required in Vietnam?
When it comes to approval for investment guidelines, everyone must have the same question as to why it is necessary to obtain approval for investment guidelines but not immediately issue an Investment Registration Certificate for the project because in the process of document appraisal. Investment registration must also consider aspects of the project.
First and foremost, it is important to emphasize that not all projects, but just certain types of projects, are require an approval for investment regulations or guidelines.
The purpose of applying for approval of investment policy for such projects is to:
– Ensure economic balance and development congruent with the country’s overall master plan (direction);
– Investors themselves and agencies in charge of project formulation, must conduct a thorough survey and study – which is costly and time consuming – in an effort to avoid the situation in which – after surveying and researching – the project is rejected by competent State agencies.
