During the implementation of an investment project, investors may face difficulties, force majeure situations, or fall into cases where state management agencies force the project to be suspended. In such situations, investors are forced to temporarily halt the operation of the project in which they are investing. So, what are the documents, steps and procedures? Follow the article below.

Circumstances for suspension

According to Article 47 of Law on Investment 2020, investment projects will be suspended in the following cases:

- Investors decide to suspend their investment project.

Note that: If the project has to be suspended in a force majeure event, the State shall allow the investor to be exempt from paying land rents or reduce land levies for the suspension period with a view to remedy consequences caused by the force majeure event.

- The investment authority shall decide to suspend an investment project in part or in full in the following cases:

a) To protect sites/monuments, relics, antiques or national treasures in accordance with the Law on Cultural Heritage;

b) To rectify a violation of the law on environmental protection at the request of the environment authority;

c) To take measures to ensure occupational safety at the request of the labor authority;

d) Pursuant to a judgment or decision of a court or an arbitral award;

dd) The investor fails to adhere to the written approval for investment guidelines or the investment registration certificate and recommits administrative violations after incurring penalties.

- The Prime Minister shall decide to suspend a project in part or in full if the project execution is detrimental or potentially detrimental to national defense and security at the request of the Ministry of Planning and Investment.

Circumstances for suspension

Total period of suspension of an investment project

According to Article 56 (2) of Decree 31/2021/ND-CP, the total period of suspension of an investment project shall not exceed 12 months. If the investment project is suspended according to a court’s effective judgment or decision, effective arbitral award or investment authority’s decision, the suspension period shall be determined according to the court’s judgment or decision, effective arbitral award or investment authority’s decision.  If these documents do not specify the suspension period, the total suspension period shall not exceed the period prescribed in this Clause.

Procedures for suspension of investment projects

According to Article 56 (3) of Decree 31/2021/ND-CP, suspension procedures are as follows:

- If the investor decides to suspend the investment project himself/herself/itself, such investor shall send a notification to the investment registration authority within 05 working days from the date of making the decision. The investment registration authority shall receive the notification and notify the project suspension to relevant authorities.

- If the investment authority decides to suspend the investment project:

+ Such authority shall, according to the competent authorities’ opinions about the cases specified in Clause 2 Article 47 of the Law on Investment to decide to suspend part or whole of the investment project and notify relevant authorities and investor. 

+ The investment authority or competent authorities in the fields specified in Points a, b, c and dd Clause 2 Article 47 of the Law on Investment shall make a record prior to deciding to suspend or suspend part of the investment project. Where the investment project is suspended according to the court’s judgment or decision or arbitral award, the investment authority shall, according to the court’s effective judgment or decision or effective arbitral award, decide to suspend part or whole of the investment project;

- Regarding an investment project that is detrimental or potentially detrimental to the national defense and security, the provincial People’s Committee shall send a written notification to the Ministry of Planning and Investment. The notification shall contain the following contents: the investor executing the project; objectives, locations and contents of the project, process of executing the project; assessment of impacts or potential impacts of the project on national defense and security; proposal that part or whole of the project is suspended. At the request of the provincial People's Committee, the Ministry of Planning and Investment shall seek opinions of the Ministry of National Defense and Ministry of Public Security for submission thereof to the Prime Minister for decision to suspend part or whole of the project.

Procedures for suspension of investment projects

BUSINESS SUSPENSION

The suspension of an investment project does not mean the suspension of business operations. The implementation of investment projects is one of the aspects of the enterprise's business activities. “Suspended business” can be understood as the legal status of an enterprise that is in the process of suspending business in accordance with the Law on Enterprises. 

Circumstances for business suspension

According to Article 206 of Law on Enterprises 2020, business suspension will be implemented in the following cases:

- By enterprise’s own decision;

- The business registration authority and competent authorities are entitled to request an enterprise to suspend its business operation when:

  • The enterprise does not fully satisfy the conditions for doing business in restricted business lines must suspend or terminate business operation in the corresponding business lines.
  • Relevant authorities request the suspension in accordance with regulations of law on tax administration, environment and relevant laws;

Procedures for business suspension

  • According to Article 66 Decree 01/2021/ND-CP, when an enterprise decide to suspend its business: 

Step 1: The enterprise shall send a notification to the Business Registration Office of province where the enterprise is located at least 03 days before the planned date of suspension.

- If the enterprise is still suspended after the notified suspension period, another notification must be sent to the Business Registration Office at least 03 days before the planned date of suspension. 

- Each notified suspension period must not exceed one year.

Step 2: The Business Registration Office shall give a confirmation slip, examine the validity of received documents, and issue a certification that the enterprise has registered the business suspension ahead of schedule within 03 working days from the receipt of satisfactory documents.

After that, the Business Registration Office shall change the enterprise’s legal status on the National Enterprise Registration Database.

Application includes

- Notice of business suspension;

- Resolution, decision and copy of meeting minutes of the Members' Council, for limited liability companies with two or more members, partnerships, of the Board of Directors, for joint-stock companies; resolution, decision of the company owner for a single-member limited liability company on business suspension.

According to Article 67 Decree 01/2021/ND-CP, business suspension or termination at request of a competent authority will be implemented as follows:

- When the Business Registration Office receives a notification from a competent authority that an enterprise is engaging in conditional business lines/business lines restricted to foreign investors without satisfying all conditions as prescribed, it shall request the enterprise to suspend or terminate such business lines. If the enterprise fails to comply with the request, the Business Registration Office shall request the enterprise to submit report according to Point c Clause 1 Article 216 of Law on Enterprises.

- Within 03 working days from the day on which the Business Registration Office receives a notification from a competent authority that the enterprise is requested to suspend or terminate its business, or has served penalties or judicial measures in accordance with regulations of specialized laws, the Business Registration Office shall update information on the National Enterprise Registration Database and publish the same on the National Business Registration Portal.

Application includes

Obligations during business suspension

During the suspension period, the enterprise shall fully pay the unpaid taxes, social insurance, health insurance, unemployment insurance premiums and fulfill contracts with its clients and employees, unless otherwise agreed by the enterprise, creditors, clients and employees.

Note that: According to Article 4 (2a) of Decree 126/2020/ND-CP, during the business suspension period, taxpayers are not required to submit tax declaration dossiers, except for the case of temporary suspension for a full month, quarter or calendar year or fiscal year, they still have to submit monthly and quarterly tax declarations; annual settlement records.

Above are the basic information regarding investment project and business suspension under Vietnam’s regulations. Ngoc Phu Law Firm specializes in providing comprehensive legal services professionally related to Domestic and Foreign Investment; Enterprise; Real estate; Intellectual Property; Labor; Consulting, drafting, negotiating and supporting the signing of commercial contracts, domestic and foreign service contracts; Consulting and supporting the process of applying for all kinds of sub-licenses,.. With a team of profession lawyers and well-trained specialists, allow us to ease the burden by doing the paperwork for you.