Investment approval authority

The hierarchy of authority to approve investment projects is as follows: 

Prime Minister ("PM")	Projects regardless of capital source or capital level within specified sectors: airports & air transportation; national seaports; minerals exploration & mining, petroleum exploration, production & processing; radio & TV broadcasting; casinos; cigarette manufacturing; universities; establishment of industrial zones, export processing zones, high-tech zones and economic zones ("zones")
	Projects regardless of capital source with capital level over VND1,500 billion within specified sectors: electricity business; mineral processing; metallurgy; construction of railways, roads & internal waterway infrastructure; alcohol & beer production & trading
	Projects with foreign invested capital source regardless of capital level within specified sectors: such as: sea transportation; post, delivery, telecommunications & internet networks; printing & distribution of newspapers & other printed matter; publishing; independent scientific research establishments
Provincial/municipal people's committee ("PC")	Projects outside zones and not within PM approval authority
	Projects for development of infrastructure in zones in localities with no MB
Provincial/municipal zone management board ("MB")	Projects in zones and not within PM approval authority
	Projects for development of infrastructure in zones

 

Investment certificate-issuing authority

All investment certificates will be issued by the relevant PC or MB. The only exception is in specialized sectors, eg banking or insurance, where the relevant line ministry has investment approval authority and fulfils the certificate-issuing role.

The MPI will have no investment approval authority and will not even retain its role as the certificate-issuing body for projects within PM authority.

Where proposed investment projects falling within PM authority are already provided for in an approved master plan and/or satisfy market-opening conditions prescribed in law or international treaties, the relevant PC or MB may issue the investment certificate without making any submission for PM approval. They will issue certificates in accordance with the master plan and/or satisfy market-opening conditions prescribed in law or international treaties.

Where proposed projects are not provided for in an approved master plan or do not satisfy prescribed market-opening conditions, the relevant PC or MB must obtain opinions from the relevant line ministry, the MPI and other bodies and collate into a submission to the PM for a decision on investment policy.

Where there is no approved master plan, the relevant PC or MB must obtain opinions from the relevant line ministry, the MPI and other bodies and collate into a submission to the PM for a decision on investment policy.

 

Conditional sectors

Under the 2005 Law on Investment, all investment projects (regardless of whether foreign invested or domestic) in the following sectors are conditional projects and subject to investment evaluation (by the relevant PC or MB or by the PM, as above) prior to issuance of an investment certificate:

- Sectors impacting on national defense and security, social order and safety

- Banking and finance sector

- Sectors impacting on public health

- Culture, information, press and publishing

- Entertainment services

- Real estate business

- All aspects of natural resources; the ecological environment

- Development of education and training

- A number of other sectors in accordance with law

For foreign investors, the range of conditional sectors is wider still, and includes any sector for which Vietnam has committed to market-opening conditions in international treaties.

Appended to Decree 108 is the following list of sectors in which foreign investment is conditional:

- Broadcasting and TV

- Production, publishing and distribution of cultural products

- Exploration and exploitation of minerals

- Establishment of infrastructure for telecommunications networks, transmission and provision of internet and telecommunications services

- Establishment of public postal networks and provision of postal services and express delivery services

- Construction and operation of river ports, seaports, terminals and airports

- Transportation of goods and passengers by railway, air, road, sea and inland waterways

- Catching of aquaculture

- Production of tobacco

- Real estate business

- Import, export and distribution business

- Education and training

- Hospitals and clinics

- Other investment sectors for which Vietnam has committed to market-opening conditions in international treaties

 

Summarized by Phillips Fox (www.vietnamlaws.com)

The table and flowchart below show which investment projects are entitled to investment registration and which must undergo investment evaluation prior to issuance of an investment certificate:

Table: 

Is the invested capital more than VND300billion?	Yes	Investment evaluation
	No	Is it in a conditional sector?
Is it in a conditional sector?	Yes	Investment evaluation
	No	What is the investment source?
What is the investment source? (If not in a conditional sector)	Partly or completely foreign	Investment registration
	Domestic only	VND15 billion up: Investment registration
		Under VND15 billion: Business registration only

Note: Apart from the above, the question “Is it under PM’s approving authority?” should be answered to determine whether the proposed project has to be submitted to PM for investment policy or not.

Flowchart:     

 

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