On 14 February 2022, the Ministry of Planning and Investment issued Circular No. 2/2022/TT-BKHDT containing guidelines for inspection and assessment of foreign investment in Vietnam (Circular 2).
Circular 2 came into effect on 1 April 2022.
The following could be inspected at economic organisations and foreign investment projects:
The implementation schedule of the capital contribution and capital disbursement compared to the registered schedule;
The implementation schedule of the project and the project’s objectives, in particular the satisfaction status of the project in relation to conditional investments, market access conditions, investment incentives, etc.;
Fulfilment status of financial obligations (such as taxes, land rental fee) to the state budget;
Compliance status with respect to laws and regulations on labour, foreign exchange control, environment, land, construction, firefighting and prevention, and other specialised regulations; and
Financial status and capacity of foreign-owned companies.
On a periodic and ad hoc basis, or as required in specialised regulations, the authorities will select certain methods relevant to each inspection content and the practical situation. Methods set out in Circular 2 include:
Inspection via the national information system on investment;
Inspection via the submission of a self-assessment report; and
Establishment of an on-site inspection team.
In comparison to the previous regulation on inspection and assessment of foreign investment Circular No. 9/2016/TT-BKHDT (Circular 9), Circular 2 has simplified the methods of inspection down to the three mentioned methods. This helps the competent authorities to conduct the inspection in a more efficient manner as they do not have to perform unnecessary administrative procedures, such as: organising a meeting, and collaboration sessions with relevant parties.
It is also worth noting that under Circular 2, the authorities may inspect on an ad hoc basis if there is evidence of violation during an investment operation.
Similar to Circular 09, Circular 2 classifies the assessment activities into three groups:
Assessment of finalisation status: the focus is on the compliance of the capital contribution schedule, implementation schedule, labour, land use, environment protection, implementation of financial liabilities to the state, etc.;
Assessment of impact: the focus is on the implementation of the scale of the investment, the investment efficiency (such as the use of human resources, land, and business management skills), and the compliance with report requirements (such as reports related to the investment project, foreign loans, and accounting; and
Ad hoc assessment: the focus is on the acknowledgement of an unexpected event and its respective causes and consequences, as well as the feasibility of completion of the project’s objectives.
For more information, please contact:
Thang Nguyen / Special Counsel
Cuong Ta / Associate
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This legal update is not an advice and should not be treated as such.
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