On March 26th, 2021, The Government promulgates Decree no. 31/2021/ND-CP detailing and guiding a number of articles of the Law on Investment of 2020, which takes effect on that day. Comparing to Decree no.81/2015/ND-CP and other guidance documents of the Law on Investment of 2014, Decree no. 31/2021/ND-CP has some new noticeable points as follows:
1, Adding schedule of restrictions on market access for foreign investors
Decree No. 31/2021/ND-CP promulgates a schedule of restrictions on market access for foreign investors, in which 25 business lines have not been accepted on market access in accordance with point A, Appendix I, and 59 conditional business lines.
2, Adding the subjects of List of Sectors and Trades Eligible for Investment Incentives
Decree no. 31/2021/ND-CP added more subjects of Sectors and Trades Eligible for Investment Incentives including:
- Invest in research and production of biotechnology products that purpose to make food.
- Manufacture of wooden products; artificial boards, including plywood, jointed boards, MDF boards.
- Investment in development, operation, and management of technical infrastructure work for industrial clusters.
- Invest in facilities to support gender-based violence prevention and control in the community for sex workers.
- Invest in making use of excess heat from exhaust gases to generate electricity for construction material production facilities.
3, Changing and merging investment project list in geographical areas with difficult socio-economic conditions
Decree no. 31/2021/ND-CP listed a detailed List of Geographical Areas for Investment Incentives in geographical areas with difficult socio-economic conditions or geographical areas with special difficult socio-economic conditions that were promulgated in Appendix III.
4, Adding conditions for subjects entitled to investment incentives
According to point c clause 4 Article 19 of Decree no. 31/2021/ND-CP, investment projects employing disabled labors must have at least 30% of the total annual average regular labor to enjoy investment incentives.
For product distribution chains of small and medium-sized enterprises enjoyed investment incentives when meeting the following conditions:
- Have at least 80% of participating enterprises are small and medium-sized enterprises;
- Have at least 10 locations to distribute goods to consumers;
- Have at least 50% of the chain’s revenue is generated by small and medium-sized enterprises just participating in the chains.
5, Regulation on the time to suspension investment projects
According to Article 56 Decree 31/2021/ND-CP, the time to suspension investment projects is as follows: Total suspension time of investment projects must not exceed 12 months. In case the time limit expires from the date of suspension, the investment registration authority will shut down the total or a part of that investment project.
In cases of suspension of investment projects under a judgment or decision of a court, an effective arbitral award or a decision of a state management authority in charge of investment, the duration of the suspension shall be as follows: an investment project’s time of suspension shall be determined according to such judgment or decision or arbitral award.
6, Adding cases of termination operation of investment projects
Decree no. 31/2021/ND-CP adds some cases where an investment project is terminated as follows:
- Where investors implement investment operation upon artificial civil transactions in accordance with provisions of civil law.
- Under a judgment or decision of a court, an arbitral award.