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DECREE
ON
INVESTMENT ON THE
BASIS OF BUILD-OPERATE-TRANSFER (BOT),
BUILD-TRANSFER-OPERATE (BTO) AND BUILD-TRANSFER (BT) CONTRACTS
The Government
Pursuant to the
Law on the
Organization of the Government
32-2001-QH10 dated 25
December, 2001;
Pursuant to the
Law on Investment
59-2005-QH11
dated 29 November 2005;
Pursuant to the
Law on Construction
11-2003-QH11
dated 26 November 2003;
Pursuant to the
Law on Enterprises
60-2005-QH11
dated 29 November 2005;
Having considered the
proposal of the Minister of Planning and Investment;
DECREES:
CHAPTER I
General Provisions
Article 1
Governing scope
1. This Decree stipulates
the sectors, conditions, order, procedures and incentives applicable to investment projects for
development of infrastructure facilities on the basis of build-operate-transfer (BOT),
build-transfer-operate (BTO) or build-transfer (BT) contract.
2. The Prime Minister
shall make decisions on implementation of other similar contractual forms.
Article 2
Interpretation
of terms
In this Decree, the
following terms shall be construed as follows:
1.
Build-Operate-Transfer Contract
(hereinafter referred to
as BOT contract) means a contract entered into by an authorized
State body and an investor(s) for the construction and commercial operation of an infrastructure facility
for a certain period of time; upon the expiry of such period, the investor(s) shall transfer, without
compensation, such facility to the State of Vietnam.
2.
Build-Transfer-Operate Contract
(hereinafter referred to
as BTO contract) means a contract entered into by an authorized
State body and an investor(s) for the construction of an infrastructure facility upon the completion of
which the investor(s) shall transfer such facility to the State of Vietnam. The Government shall grant the
investor(s) the right to commercially operate such facility for a certain period of time in order to
recover the investment capital and earn profit.
3.
Build-Transfer
Contract
(hereinafter referred to as BT contract) means a contract entered into by an authorized State body and
an investor(s) for the construction of an infrastructure facility upon the completion of which the
investor(s) shall transfer such facility to the State of Vietnam. The Government shall
facilitate implementation of other project(s) by the investor(s) in order to
recover the investment capital and
earn profit or shall make payments to the investor(s) under the agreement in the BT contract.
4.
Project contract
means a BOT
contract, BTO contract or BT contract.
5.
State body
authorized to enter into project contracts
(hereinafter collectively
referred to as authorized State body) means
ministries, ministerial equivalent bodies, Government bodies, people’s committees of provinces or
cities under central authority (hereinafter referred to as provincial people's committees) or
any subsidiary bodies thereof which are authorized to enter into project contracts.
6.
Investor(s)
means any organization
or individual investing capital to perform a project, including:
(a) Enterprises of
economic sectors established under the
2005 Law on
Enterprises.
(b) Business households
and individuals.
(c) Co-operatives and
unions of co-operatives established under the
Law on
Co-operatives.
(d) Foreign invested
enterprises which were established and have operated in Vietnam;
(dd) State owned
enterprises which were established prior to the date of effectiveness of the
2005 Law on Enterprises;
(e) Foreign organizations
and individuals; overseas Vietnamese people and foreigners permanently residing in
Vietnam.
7.
Project
means a collection of
proposals relating to the expenditure of capital in order to invest in construction and operation
of a new infrastructure facility or in renovation, expansion, modernization, operation or management of
existing facilities on the basis of a BOT contract, BTO contract or BT contract as stipulated in
this Decree.
8.
Infrastructure
facilities mean
facilities the implementation of which is encouraged in accordance with the provisions of article
3 of this Decree.
9.
Other project(s)
means any
project(s) carried out by the investor for the purpose of recovering investment capital and
earning profit and which are conducted concurrently with, or after completion of, an infrastructure
facility in accordance with clause 3 of this article. Other project(s) shall be
carried out in accordance with the
provisions of the law on investment and shall enjoy incentives in accordance with the
provisions of this Decree or an agreement in the project contract.
10.
BOT enterprise, BTO
enterprise or BT enterprise
(hereinafter collectively
referred to as project enterprise) means any
enterprise set up by an investor in accordance with the law of Vietnam to organize and manage the
business of a project. A BOT enterprise or BTO enterprise may directly manage or commercially
operate the project facility or hire a management organization, provided that the enterprise shall
solely bear the responsibilities of such management organization.
Article 3
Sectors in which
project is implemented
1. The Government
encourages the implementation of projects for constructing and operating new infrastructure facilities
or for renovating, expanding, modernizing, operating or managing the following existing
facilities:
(a) Roads, bridges,
tunnels and relevant utilities and facilities;
(b) Railways and tramways;
(c) Airports, seaports,
river-ports and ferry-landings.
(d) Water plants, drainage
systems and waste or sewage treatment systems;
(dd) Power plants, power
transmission lines;
(e) Other infrastructure
facilities as decided by the Prime Minister.
2. The Government shall
protect the ownership and other legitimate interests of investors carrying out projects in accordance
with this Decree and the relevant laws.
3. Investors and project
enterprises shall be entitled to recover their capital invested and to earn
profit as stipulated in a project
contract.
Article 4
Capital sources
for carrying out projects
1. Investor(s) or the
project enterprise must, as agreed in the project contract, arrange capital
sources by themselves in order to
carry out the project. The Government encourages investors of [good] financial, technical and
administrative capacity to jointly raise capital to carry out projects.
2. The equity of an
investor used for carrying out a project shall be raised in accordance with the schedule agreed in the
project contract and must reach the following minimum ratio:
(a) With respect to
projects with total investment capital of below 75 billion Dong, the equity of
the investor must not be lower
than 30% of the total investment capital of such project;
(b) With respect to
projects with total investment capital of between 75 billion Dong and below 1,500 billion Dong, the
equity of the investor must not be lower than 20% of the total investment capital of such
project;
(c) With respect to
projects with total investment capital of 1,500 or more billion Dong, the equity of the investor must not
be lower than 10% of the total investment capital of such project.
3. Investor(s) or the
project enterprises shall, as agreed in the project contract, be obliged to
raise investment capital in
order to carry out the project in accordance with the schedule already undertaken in the project
contract and bear all responsibilities in relation to any change in the total investment capital, except
for events of
force majeure
and other cases
set out in the project contract.
Article 5
Using State
owned capital to make capital contributions to, or to support the implementation
of, projects
1. Subject to each
specific case, State owned capital may be used for making capital contributions
to, or supporting the
implementation of a project by one of the following methods:
(a) Making capital
contribution by State owned enterprise(s) for implementation of the project at a ratio of 49% or less of
the equity of the investor as stipulated in article 4.2 of this Decree.
(b) Carrying out the
construction of support facilities or arranging for compensation and site clearance by the
authorized State body in order to support the implementation of such project. This amount of capital for
support shall not be included in any capital sources for implementing the project stipulated in
article 4 of this Decree.
2. Any use of State owned
capital for supporting a project in accordance with the provisions of clause
1(b) of this article shall
be carried out under a separate project which is independent of the BOT project, BTO project or BT
project and must conform with the regulations on management of investment using State
owned capital.
3. The use of State Budget
funds to serve activities under the responsibility of the authorized State body or other obligations
stipulated in the project contract shall be carried out in accordance with guidelines provided by the
Ministry of Finance.
Article 6
Inter-branch
working group
1. Subject to requirements
of negotiations or the performance of projects, the authorized State body shall establish an
inter-branch working group for a BOT project, BTO project or BT project (hereinafter referred to
as inter-branch working group), comprising:
(a) A representative of
the head of the authorized State body as the head of the group;
(b) Representatives of
central bodies and local bodies of the locality in which the proposed project will be performed or which
is related to the project;
(c) A number of
independent legal, technical or financial experts as decided by the authorized State body.
2. The inter-branch
working group shall have the following duties:
(a) To consider criteria
for selection of investors for project contract negotiations in accordance with the provisions of
articles 10, 11 and 12 of this Decree.
(b) To support the
authorized State body in entering into project contract negotiations and performing the duties
stipulated in this Decree.
(c) To take part in
resolution of matters arising during implementation of the project;
(d) To perform other
duties upon the request of the authorized State body.
3. The duration of
operation of the inter-branch working group shall be decided by the authorized
Sate body subject to the
requirements for implementation of the project.
4. The budget for
operation of the inter-branch working group, including the budget for
performance of the obligations of the
authorised State body as agreed in the project contract, shall be funded by the State Budget on the basis
of the estimated budget approved by the authority.
CHAPTER II
Formulation and
Publication of Lists of Projects
Article 7
Formulation of a
list of projects
1. Based on planning,
guidelines for socio-economic development from time to time and the provisions of article 3 of this
Decree, ministries, ministerial equivalent bodies or Government bodies
(hereinafter referred to as ministries
in charge of management of branches) and provincial people’s committees shall formulate and
approve a list of projects calling for investment capital on the basis of BOT contracts, BTO contracts
and BT contracts in their respective branches and localities. The list of projects shall contain the
following main items:
(a) Name of projects.
(b) Objectives of
projects.
(c) Proposed location of
implementation of projects.
(d) Summary of essential
technical specifications and proposed total investment capital for implementation of the
respective projects.
(dd) Name, address,
telephone number and facsimile number of the authorized State body.
2. The list of projects
referred to in clause 1 of this article shall be submitted to the Ministry of
Planning and Investment, relevant
ministries or branches and the provincial people's committees of the localities in which the
proposed projects will be implemented, for their opinions.
3. The document seeking
opinions of the bodies referred to in clause 2 of this article must specify the necessity, objectives,
location, designed capacity and proposed investment capital and minimum technical and financial
requirements of the projects; and recommendations on an authorized State body and forms of
selection of investors for project contract negotiations.
4. The Ministry of
Planning and Investment, relevant ministries or branches and the provincial
people’s committees of the
localities in which the proposed projects will be implemented shall provide
their opinion about the list of
projects and the issues referred to in clause 3 of this article within 30
working days from the date of
receipt of the list.
Article 8
Publishing lists
of projects
1. Upon agreement with the
relevant bodies referred to in article 7.4, the ministries, branches and the provincial people’s
committees shall publish the lists of projects on the website of respective ministries, branches and
localities and at the same time in three consecutive issues of central and local daily newspapers.
2. The List of projects
shall be published periodically once each year and must contain the main items stipulated in article 7.1
of this Decree.
3. For further information
about projects, investors should directly contact the authorized State body designated in the list of
projects.
Article 9
Formulation and
approval of proposals for projects
1. Based on the published
list of projects referred to in article 8, the authorized State body shall
appoint a domestic or foreign
consultant contractor to formulate a proposal for a project and tender
invitation documents for selection of
investor(s) for project contract negotiations.
2. The proposal for a
project shall comprise the following main items:
(a) Necessity of investing
in construction of facilities, favourable conditions and difficulties;
(b) Proposed capacity,
location and construction area, project items and need for land use;
(c) Analyses and
preliminary selection of technology or technique; terms for provision of
supplies, equipment, fuel, energy or
services; technical infrastructure; plan of site clearance and resettlement (if any);
effects of the project on the ecological environment; fire and explosion fighting and prevention;
and security;
(d) Preliminary
calculation of the total investment capital, duration of implementation of the
project and plan for raising
capital in accordance with the schedule and socio-economic efficiency of the project.
3. The authorized State
body shall consider and decide on approval of the proposal for the project.
4. The budget for
formulation of proposals for a project and tender invitation documents shall be
funded by the State Budget.
Ministries, branches and provincial people’s committees shall prepare on their own initiative a budget
for implementation of the works referred to in this article on an annual basis.
CHAPTER III
Selection of
Investors for Project Contract Negotiations
Article 10
Tendering
for selection of the investor(s) for project contract negotiations
1. Except for the cases
stipulated in articles 11 and 12 of this Decree, the authorized State body must hold open domestic or
international tendering for selection of the investor(s) for project contract negotiations.
2. The tender invitation
documents shall comprise the following items:
(a) Instructions for
tenderers;
(b) Minimum technical,
commercial and financial requirements of the project; criteria for assessment; preferential
conditions; taxation and other conditions;
(c) Proposal for the
project;
(d) Draft project
contract, including the items set out in article 15;
(dd) Other relevant
documents as determined by the authorized State body.
3. Subject to the scale
and nature of the project, the authorized State body shall decide on the method of tendering for selection
of the investor(s) for project contract negotiations.
4. The Ministry of
Planning and Investment shall make detailed regulations on tender invitation documents, and the method,
order and procedures for tendering for selection of investors for project contract negotiations.
Article 11
Appointment
of investors to directly enter into project contract negotiations
The appointment of the
investor(s) to directly enter into project contract negotiations shall only be conducted when one of the
following conditions is satisfied:
1. The authorized State
body has carried out pre-qualification of investors for project contract negotiations, but there is
only one investor who satisfies the requirements of the pre-qualification;
2. The project is required
to be implemented in order to satisfy an urgent requirement for use of infrastructure facilities
or to ensure a continuous requirement for use of products or services, but it is unable to carry out
tendering for selection of the investor(s) for project contract negotiations;
3. Other cases as decided
by the Prime Minister.
Article 12
Projects
proposed by investors
1. An investor may propose
on its own initiative a project other than those in the list of projects which
is published in accordance
with the provisions of article 8 of this Decree, and must prepare a proposal for the project.
2 The proposal file for a
project submitted to the authorized State body shall comprise the following items:
(a) Proposal for the
project containing the items specified in article 9.2 of this Decree;
(b) Document evidencing
the legal status and the technical and financial capacity of the investor;
(c) Other documents
necessary for explaining the proposal for the project.
3. Where the proposal for
the project conforms with the master plan approved by the authority, the authorized State body
shall organize the collection of opinions from the relevant bodies and decide to approve the proposal for
the project in accordance with the procedures specified in clauses 2, 3 and 4 of article 7. Where the
proposal for the project has not yet been included in the approved master plan, the authorized State
body shall submit it to the ministry in charge of management of the relevant branch for
consideration and addition to the master plan under its authority, or for submission to the Prime
Minister for his approval of and addition to the master plan.
4. The authorized State
body shall consider and decide on approval of the proposal for the project in accordance with the
provisions of clause 2 of this article and notify the investor in writing of its decision to approve or
refuse the proposal for the project within forty five (45) working days from the date of receipt of the
valid file. Where the proposal for the project is approved, the authorized State body shall enter into
project contract negotiations with the investor in accordance with the
provisions of Chapter IV of this
Decree.
5. Where two or more
investors submit proposals for implementation of one project at the same time, the authorized State body
shall hold tendering for selection of an investor for project contract negotiations in accordance
with the provisions of article 10 of this Decree.
CHAPTER IV
Negotiation and
Signing of Project Contracts
Article 13
Preparation
and approval of investment projects for construction of facilities
1. After a decision on
selection of the investor(s) for project contract negotiations is made in
accordance with the provisions of
article 10, 11 or 12 of this Decree, the authorized State body shall direct the investor(s) to prepare an
investment project for construction of a facility which shall be used as the basis for the
negotiations.
2. The investment project
for construction of a facility shall be prepared and approved in accordance with the laws on
construction. Where the project negotiations are successful, costs for
preparation of the investment project for
construction of a facility shall be charged to the investment capital of the project.
Article 14
Negotiations
and signing of project contract and relevant contracts
1. The authorized State
body shall preside over the project contract negotiations and agree with the selected investor(s) on a
Government guarantee (if any). With respect to a project which requires a Government guarantee, the
authorized State body shall submit it to the Prime Minister for his consideration and approval
of the requirement for a guarantee prior to project contract negotiations.
2. The negotiations of
contracts for land lease, construction, installation of machinery and equipment, consultancy services,
inspection, purchase of raw materials, sale of products, services, provision of technical services, loans,
mortgage or pledge of property and other contracts may be conducted concurrently with the
project contract negotiation. The authorized State body shall activate the negotiation of relevant
contracts in order to ensure they are consistent with the project contract.
3. The project contract
and relevant contracts shall be evaluated concurrently with the evaluation and issuance of an investment
certificate in accordance with article 17 of this Decree.
Article 15
Contents of
project contracts
1. A project contract
shall contain the following main items:
. Names, addresses and
authorized representatives of the parties entering into the project
contract; . Objectives, scope of
operation of the project and other projects; method and schedule of payment of capital
invested in construction of facilities (in respect of BT projects);
. Capital sources,
financial ability, total investment capital and schedule of implementation of
the project;
. Capacity, technology and
equipment; requirement for design and technical standards of the facilities; quality
standards;
. Provisions regarding
control and inspection of the quality of the facilities;
. Provisions regarding
protection of the environment and natural resources;
. Conditions relating to
the use of land, infrastructure facilities and support facilities necessary for construction and
operation;
. Schedule of construction
of the facilities, the duration of operation of the project enterprise and the time of transfer of
the facilities;
. Rights and obligations
of the parties; undertakings to provide guarantees and to share risks between the parties
entering into the project contract; method of dealing with risks which might occur at the fault of one
of the parties;
. Provisions regarding
prices, fees and other charges (including methods of determination of prices, fees and other
receivables; conditions and terms of adjustment thereof);
. Obligation to maintain
normal operation of the project facilities;
. Provisions on
consultancy and inspection of design, equipment, construction, acceptance, operation, and maintenance
of the project facilities;
. Technical conditions,
status of operation, quality of the facilities upon transfer; principles used for valuation of the
facilities and order of transfer of the facilities;
. Conditions for
adjustment of the project contract;
. Circumstances of early
termination of the project contract and conditions for assignment of the project contract;
. Methods of resolution of
disputes between the parties entering into the project contract;
. Dealing with breaches of
the obligations in the project contract;
. Events of
force majeure
and principles
for resolution;
. Provisions regarding
assistance and undertakings of Government bodies;
. Responsibilities of the
investor(s) and the project enterprise for technology transfer and training of managerial and
technical skills for operation of the facilities after transfer;
. Validity of the project
contract.
2. The rights and
obligations of a project enterprise, [and] the relationship between the project enterprise and the
investor shall be agreed by the parties in the project contract. To confirm
these issues, the parties may
agree in the project contract on the implementation of one of the following methods provided that all
provisions of the project contract must be complied with:
(a) The project
enterprise, after being established in accordance with the provisions of article
20 of this Decree, shall enter
into the project contract and, together with the investor, shall constitute a party to such contract.
(b) The project enterprise
shall assume the rights and obligations of the investor relating to the implementation of the
project. The assumption must be legalized by a written document signed between the project
enterprise, the investor and the authorized State body. This document shall constitute an
integral part of the project contract.
3. The parties may agree
in the project contract on other items, including the right of the lender(s) to take over all or part of
the rights and obligations of the project enterprise (hereinafter referred to as project step-in
right) in the
case where the project enterprise or the investor(s) fails to perform its obligations under the
project contract or loan agreement(s) provided that the lender(s) must perform all of the respective
obligations of the project enterprise or the investor(s) as stipulated in the
project contract. The conditions,
procedures and contents of the project step-in right of the lender(s) must be specified in the loan
agreement(s), security agreement(s) for loans or other agreements signed between the project
enterprise or the investor(s) and the lender(s) and must be approved by the authorized State body.
Article 16
Application
of foreign laws to govern contractual relations
With respect to projects
with foreign invested capital, the parties entering into a project contract, the
parties entering into contracts
whose contractual obligations are guaranteed by the authorized State body in accordance with article 38
of this Decree and parties entering into other contracts relating to the project shall be allowed to agree
in the Contract on application of foreign laws provided that such agreement is
not inconsistent with the
basic principles of the law of Vietnam.
Article 17
Evaluation
and issuance of investment certificates
1. The Ministry of
Planning and Investment shall be the core point to organize evaluation and
issuance of investment certificates
to projects.
2. Procedures for
evaluation and issuance of investment certificates shall be performed as
follows:
(a) An investor shall
submit ten (10) sets of the file, including at least one set of original copies,
to the Ministry of Planning
and Investment for evaluation and issuance of an investment certificate. The project
file shall comprise:
. Project contract;
. Investment project for
construction of facilities and other projects (in the case of BT projects);
. Joint venture contract
and charter of the project enterprise (if any);
. Initialled contracts
relating to implementation of the project or preliminary agreements for purchase of raw materials
or sale of products (if any).
(b) Within a time-limit of
three working days from the date of receipt of the valid file in accordance with the provisions of
clause 1(a) of this article, the Ministry of Planning and Investment shall seek opinions from
relevant ministries, branches and provincial people's committees;
(c) Within a time-limit of
fifteen (15) working days from the date of receipt of the valid file, the bodies referred to in
clause 1(b) of this article shall provide their written opinions about the project.
(d) Within a time-limit of
fifteen (15) working days from the date of receipt of the written opinions of the relevant bodies, the
Ministry of Planning and Investment shall issue an investment certificate to the
project.
Article 18
Contents of
investment certificates
An investment certificate
shall include the following main contents:
. Names and addresses of
the investor(s) and the project enterprise;
. Number and date of
issuance of the business registration certificate (in the case of investors
which have established an
economic organization);
. Objectives and location
of implementation of the project;
. Total investment capital
of the project;
. Investment incentives
and Government guarantee (if any) consistent with the project contract.
Article 19
Security for
obligation to perform project contract
1. An investor must
provide security in the form of a bank guarantee for its obligations under the
project contract or security for
other obligations in accordance with the civil law. The amount of money as security for the
obligation to implement the project contract must be equal to the following
minimum percentage:
(a) One percent (1%) of
the total investment capital of the project in respect of projects with total investment capital of
1,500 billion Dong or more.
(b) Two percent (2%) of
the total investment capital of the project in respect of projects with total investment capital from 75
billion Dong to below 1,500 billion Dong;
(c) Three percent (3%) of
the total investment capital of the project in respect of projects with total investment capital of
below 75 billion Dong.
2. The security for the
obligation to implement the project contract shall be effective from the date on which the contract is
officially signed to the date of completion of the construction work.
CHAPTER V
Implementation of
Projects
Article 20
Business
registration, establishment and organization of management of project
enterprises
1. With respect to
projects funded by domestic investment capital, upon completion of the
procedures stipulated in article 17
of this Decree, the investor shall carry out business registration to establish
a project enterprise or
amend its business registration certificate (in the case of investors which have established an economic
organization). Documents, order and procedures for business registration or for amendment of
business registration shall be subject to the provisions of the
Law on Enterprises.
2. The investment
certificate issued to a foreign investor(s) in accordance with the provisions of
article 17 of this Decree shall
also be the business registration certificate of the project enterprise.
3. The organizational
structure of the management apparatus, and rights and responsibilities of the project enterprise shall
be decided by the investor consistent with the
Law on Enterprises,
the Law on Investment and relevant
laws.
Article 21
Conditions
for commencement of implementation of projects
The authorized State body
and an investor(s) shall agree in the project contract on conditions for commencement of
implementation of the project.
Article 22
Entering
into sub-contracts to proceed with implementation of project
A project enterprise shall
be entitled to decide by itself on selection of contractors for consultancy, procurement of goods or
construction and installation and to enter into other contracts to implement the project. The result of the
selection of a contractor must be notified to the authorized State body.
Article 23
Preparation
of construction site
1. The project enterprise
shall preside over and co-ordinate with the authorized State body and the provincial people’s
committee of the locality in which the project will be implemented in
establishing a council for site clearance
for construction in accordance with the plan set out in the approved investment project for
construction of a facility. Special cases shall be decided by the Prime
Minister.
2. The provincial people's
committee of the locality in which the project will be implemented shall be responsible for completing
the procedures for allocation or lease of land for implementation of the project in accordance with
law and the conditions for land use already undertaken in the project contract.
3. Costs of compensation
and site clearance shall be paid by the project enterprise and included in total investment capital of the
project, except for a case where State Budget funds are used to support compensation and site
clearance as stipulated in article 5.1(b) of this Decree and unless otherwise stipulated in the project
contract.
Article 24
Preparation
of technical designs and commencement of construction of facilities
A project enterprise shall
prepare a technical design of the facility in accordance with the law on construction and submit it
to the authorized State body for supervision and inspection. Where the technical design is inconsistent
with the approved basic design, the project enterprise must submit it to the authorized State body for
consideration and decision.
Article 25
Supervision
of construction process and acceptance of facilities
1. A project enterprise
may supervise by itself, or hire an independent consultancy organization to supervise, the
construction process and accept various work items and the whole facility in accordance with the
approved design.
2. The hired consultancy
organization shall be responsible to the project enterprise and before the law for the quality of the
project facility.
Article 26
Management
and commercial operation of facilities
The BOT enterprise, BTO
enterprise or the management organization specified in article 2.10 of this Decree shall conduct
management and commercial operation of the whole facility in accordance with the conditions agreed in the
project contract.
Article 27
Service fees
and prices
1. Charges and fees
applicable to products or services provided by a project enterprise shall be determined on the
principle of sufficient cost recovery taking into account their balance with the market price and assurance
of interest of the project enterprise and [service or product] users; and must be specified in the
project contract.
2. Conditions for increase
in prices, fees and other charges must be agreed upon and provided for in the project contract. Upon
any changes in prices or fees and other charges, the project enterprise must provide 30 days prior
notice to the authorized State body. Any changes in prices and fees applicable to products or
services controlled by the State or other charges other than those contemplated and agreed in
the project contract must be approved by the authorized State body.
Article 28
Support for
collection of service fees
Project enterprises shall
be given all favourable conditions to collect properly and in full service fees
and prices as well as other
legitimate charges from commercial operation of the project facility. Where necessary, the project
enterprise may request the authorized State body to support the collection of
fees or other charges from
commercial operation of the project facility.
Article 29
Obligation
to supply services and operate facilities
Project enterprises shall
have the obligation:
1. To provide equal
treatment to all legitimate users of products and services provided by the
project enterprise. Any exercise
of the right to conduct commercial operation of the project facility in order to discriminate against, or
to refuse to provide services to, any user shall be strictly prohibited.
2. To ensure periodical
maintenance or repairs of the facility under the project contract, to ensure
that the project operates in
accordance with its design.
3. To supply products and
services in the quantity and with the quality as agreed in the project contract for the duration of
commercial operation until the facility is transferred.
4. To ensure and maintain
the regime of use of the facility in accordance with the conditions stipulated in the project contract.
CHAPTER VI
Transfer of
Facilities and Termination of Project Contracts
Article 30
Transfer of
project facilities
1. With respect to BOT
projects, upon expiry of the duration of commercial operation of a project
facility as stipulated in the BOT
Contract, the investor shall transfer, without compensation, the project facility and the documents
relating to exploitation or operation of the facility to the State. The property to be transferred
shall not include any debts incurred by the project enterprise. All the financial obligations of
the investor and the project enterprise to the State relating to the project
must be fulfilled before the
time the project is transferred.
2. With respect to BTO
projects and BT projects, upon completion of construction, the investor shall transfer the facility to
the State in accordance with the conditions stipulated in the BTO contract or BT contract and the
provisions of articles 32 and 33 of this Decree. In addition to the
conditions specified in this clause, the transfer of facilities of a BT project
must comply with the provisions
of clauses 5 and 6 of article 31 of this Decree.
Article 31
Procedures
for handover of facilities of BOT projects
1. One year before the
transfer takes place, the investor must publish in a daily central and local newspaper the transfer of
the project to the State and the order, procedures and time-limit for liquidation of contracts
and for discharge of debts.
2. One year before the
deadline for transfer as stated in the project contract, the authorized State
body shall organize an
inspection of the quality of the facility in order to identify damage (if any)
and to request the project
enterprise to repair and maintain the facility.
3. The authorized State
body shall only take over the transfer if the facility and equipment or property relating to the operation
of the facility have been maintained and repaired as agreed in the project contract.
4. The investor and the
authorized State body shall prepare documents of handover of the facility to serve as the legal basis
for the transfer of the facility.
5. The investor and the
project enterprise must ensure that the property to be transferred shall not be used to provide a
guarantee for the implementation of a financial obligation or shall not be
mortgaged or pledged as security for
other obligations of the project enterprise arising before the time of such transfer.
6. The project enterprise
shall be responsible for technology transfer, training and provision of necessary operational
guidelines to the entity assigned by the State to further operate the facility.
7. The project enterprise
shall be responsible for carrying out periodical warranty or maintenance to ensure technical
conditions for normal operation of the facility in accordance with the
requirements of the project contract.
Article 32
Conditions
for handover of facilities
Upon the handover of a
facility, the authorized State body and the investor must consider whether all
the conditions for transfer
stipulated in the project contract have been met, including the following
issues:
1. Status of the facility
upon transfer.
2. List of assets
transferred, including documents relating to surveys, design, construction,
installation, operation, maintenance and
management of the facility.
3. Document on inspection
of the value and quality of the facility transferred.
4. Responsibilities of the
parties for the continuous operation of the facility transferred.
5. Duration, conditions
for maintenance and warranty of the facility after it has been transferred.
6. Conditions for
environmental protection.
7. Other contracts and
conditions necessary for the maintenance and operation of the facility after it
has been transferred.
Article 33
Take-over
and use of facilities after being handed over
1. The authorized State
body shall take over the transfer of the facilities in accordance with the conditions stipulated in
the project contract and prepare the apparatus in charge of such take-over to enable normal operation of
the facilities after the transfer.
2. The authorized State
body may assign the facilities to an enterprise with management and technical qualifications to continue
managing and operating such facilities.
Article 34
Effectiveness of project contracts
1. A project contract
shall terminate upon expiry of the duration as agreed in the contract.
2. The operation of a
project shall be terminated and the investor shall bear all responsibilities
under the project contract if the
construction of the project facility is not commenced within the agreed period, unless otherwise agreed in
the project contract.
CHAPTER VII
Investment
Incentives and Guarantees in Respect of Investors and Project
Enterprises
Article 35
Tax
incentives
1. BOT Enterprises and BTO
Enterprises shall be entitled to corporate income tax incentives as stipulated in respect of
projects included in the list of sectors entitled to special investment
incentives. Incentives relating to
corporate income tax rates applicable to such enterprises shall apply for the whole duration of
implementation of the project.
2. Project enterprises and
sub-contractors shall be exempt from import duty for implementation of projects in accordance
with the law on export and import duties.
3. Objects of industrial
property currently within the period of protection, technical know-how, technological processes
and technical services for implementation of a project shall be exempt from taxes relating to
technology transfer and income from royalties.
4. In addition to the tax
incentives stated in clauses 1, 2 and 3 of this article, investors and project enterprises must pay other
taxes in accordance with law.
5. Tax incentives for
other projects which are performed by investors in order to recover capital [invested] in BT projects
shall apply in accordance with the provisions of this article or as agreed in the project contract
consistent with the law on investment and relevant laws, taking into account the time for recovery of
capital [invested] in BT project facilities and profitability of other projects.
Article 36
Taxes
applicable to contractors participating in implementation of project
1. Any foreign
contractor(s) (if any) participating in the implementation of a project shall
pay taxes and shall be entitled to tax
incentives in relation to exemption from or reduction of taxes in accordance with the law on taxation
applicable to foreign contractors.
2. Any Vietnamese
contractor(s) shall perform tax obligations in accordance with the law on
taxation applicable to Vietnamese
enterprises.
Article 37
Incentives
relating to land use
A project enterprise shall
be exempt from land use fees for the area of land allocated by the State or
shall be exempt from land rent
for the whole duration of implementation of the project.
Article 38
Guarantees
for obligations of investors, project enterprises and other enterprises
Where necessary, subject
to the nature of a project, the Government shall appoint an authorized body to provide on behalf of the
Government a guarantee for loans, provision of raw materials, sale of products
and other contractual
obligations to the investor, project enterprise or other enterprises
participating in the implementation of the
project as defined in the project contract and a guarantee for the obligations
of State enterprises which have a
monopoly over sale of raw materials or purchase of products and services of the project enterprise.
Article 39
Right to
mortgage property
1. During the
implementation of a project, project enterprises shall be permitted to mortgage
or pledge property and land use
rights in accordance with law.
2. Any mortgage or pledge
of property by a project enterprise must be approved by the authorized State body and must not affect
the objectives, progress and operation of the project stipulated in the project contract, and must
be consistent with law.
Article 40
Right to buy
foreign currency
1. During the construction
and commercial operation of facilities, investors or project enterprises shall be permitted to buy
foreign currency from credit institutions authorized to conduct foreign exchange activities in order to
serve current transactions, capital transactions and other transactions in accordance with the law on
foreign exchange control, including:
(a) Payments for lease of
equipment and machinery from abroad.
(b) Import of machinery,
equipment and other products or services to carry out the project.
(c) Repayment of foreign
loans (including principal and interest thereon).
(d) Repayment of bank
loans in foreign currency (including principal and interest thereon) for the purpose of import of
machinery, equipment and other products or services to carry out the project.
(dd) Remittance of
capital, profit, proceeds from investment liquidation, payments for provision of technology, services and
intellectual property and other legitimate income abroad (applicable to foreign investors).
2. The Government shall
ensure or assist the foreign currency balance of projects for energy, construction of traffic
works and waste treatment.
Article 41
Assurance of
provision of public services
1. Project enterprises
shall be permitted to use land, roads and other support facilities to implement projects in accordance
with law.
2. Where public services
or facilities are scarce or limited to only certain cases, project enterprises
shall be given priority in the
provision of services or in being granted the right to use public facilities to implement the project.
3. The authorized State
body shall be responsible for assisting project enterprises in completing the necessary procedures and
documents in order to obtain priority in using public services and facilities.
Article 42
Dispute
resolution
1. With respect to
projects funded by domestic investment capital, any dispute as between the authorized State body and
an investor(s) or a project enterprise or between the project enterprise and economic organizations
participating in the implementation of the project whose contractual obligations are guaranteed
by the authorized State body as referred to in article 38 of this Decree, shall be first resolved
through negotiation and conciliation. In the case of failure to resolve such dispute through
negotiation and conciliation, the parties may refer the dispute to a Vietnamese arbitration organization
or a court of Vietnam for resolution in accordance with Vietnamese law.
2. With respect to
projects with foreign invested capital, all disputes shall be first resolved
through negotiation and
conciliation. In the case of failure to resolve such dispute through negotiation
and conciliation, the parties
may resolve the dispute in accordance with the following provisions:
(a) Disputes as between
the authorized State body and a foreign investor(s) or a project enterprise shall be
resolved at an arbitration [body] or a court of Vietnam, unless otherwise agreed in the project
contract.
(b) Disputes as between a
project enterprise and a foreign organization or individual or Vietnamese economic
organization(s) or disputes as between foreign investors shall be resolved in accordance
with the provisions of article 12.3 of the
Law on Investment.
Article 43
Assurance of
capital and property
1. Investment capital and
legitimate property of the investors shall not be nationalized or expropriated by administrative action.
2. In necessary cases
where acquisition and requisition of the State’s property are required in accordance with the
provisions in article 6 of the
Law on Investment,
the State must assure payment or compensation for
property and capital of the investors at market prices or by other methods as agreed.
CHAPTER VII
Implementation
Provisions
Article 44
Effectiveness
This Decree shall be of
full force and effect fifteen (15) days from the date of publication in the
Official Gazette and shall replace
the following Decrees:
1. Decree 77-CP of the
Government dated 18 June 1997 issuing regulations on investment on the basis of build-operate-transfer
(BOT) contracts applicable to domestic investment.
2. Decree 62/1998/ND-CP of
the Government dated 15 August 1998 issuing regulations on investment on the basis of
build-operate-transfer (BOT), build-transfer-operate (BTO) and build-transfer
(BT) contracts applicable to
foreign investment in Vietnam.
3. Decree 02/1999/ND-CP of
the Government dated 27 January 1999 on amendment of and addition to a number of articles of
the regulations on investment on the basis of build-operate-transfer (BOT), build-transfer-operate (BTO)
and build-transfer (BT) contracts applicable to foreign investment in Vietnam.
Article 45
Grandfather
clause
1. Project enterprises
which use domestic investment capital and which were established prior to the date of effectiveness of
this Decree shall not be required to carry out procedures for business
reregistration.
2. Project enterprises
with foreign owned capital which were established prior to the date of effectiveness of this
Decree may or may not carry out [procedures for] re-registration subject to the provisions of article
170.2 of the
Law on Enterprises
and relevant
provisions. Re-registration shall not be allowed to affect
undertakings in project contracts.
3. Projects which were
issued with an investment licence prior to the date of effectiveness of this Decree shall not be
required to carry out procedures for re-issuance of an investment certificate, unless the investor so
requests.
4. An investor who entered
into a project contract prior to the date of effectiveness of this Decree and who has not been granted
an investment license or investment certificate shall not be required to amend the project contract
but shall be required to carry out procedures for issuance of an investment license in
accordance with this Decree.
Article 46
Organization
of implementation
1. The Ministry of
Planning and Investment shall preside over and co-ordinate with relevant
ministries and branches to provide
guidelines for the implementation of this Decree.
2. Ministers, heads of
ministerial equivalent bodies and Government bodies, and chairmen of people's committees of provinces
and cities under central authority, depending on their respective functions and powers, shall be
responsible for the implementation of this Decree.
On behalf of the
Government
Prime Minister
NGUYEN TAN DUNG
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