One of the major policies of the State in the current period is to make the most of and maximise the investment capital of domestic and foreign entities wishing to invest in business. This policy comes from the strict requirements of the globalisation process, as well as the purpose of socio-economic development. That is why, in addition to measures to encourage investment, our state has been developing and perfecting measures to ensure open investment, with the policy of simplicity and transparency in regulations and application. equity among investors and efficiency, minimising costs, contributing to a stable investment environment, creating incentives as well as safety for investors. Accordingly, the 2020 Investment Law stipulates investment security measures, including:
First, the State commits to guarantee property ownership:
The law of Vietnam has a commitment that the investor’s legal assets are not nationalised or confiscated by administrative measures. This is a particularly important commitment for foreign investors because it creates peace of mind for investors when investing in Vietnam, ensuring that their assets are absolutely protected.
Measures to secure legal property ownership are specified in Article 10 of the 2020 Investment Law, demonstrating the investment and business encouragement for domestic and foreign investors so that they can be bold. invest capital to implement projects aimed at socio-economic development. And of course, with this principle, the ownership rights to the assets spent or created in the course of business will be guaranteed to the maximum, not threatened or illegally infringed.
In case the State requisitions or requisitions property for reasons of national defence and security, or in the national interest, in a state of emergency, or for natural disaster prevention and control, the investor shall be paid and compensated in accordance with regulations. of the law on requisition and requisition of property and other relevant provisions of law. From there, it shows the principles of the State of Vietnam still strictly complying with commitments with international conventions and investment protection.
This is the concretization of Article 32 of the 2013 Constitution, according to which the State must not use its special coercive power to infringe upon the legitimate assets of investors. Investors’ property rights are protected. In the case of expropriation or requisition of investors’ assets for special and legitimate reasons (Defence, security, national interests…). The State will make payment and compensation in accordance with the law on requisition and requisition of property and other relevant provisions of law. The measure to ensure legal ownership for investors takes effect from the time of project investors without going through any administrative procedures.
Second, the State commits to ensure business investment activities:
One of the reasons for investors to consider investing in a country depends on whether the investor’s investment activities are guaranteed to go smoothly. The state cannot guarantee that the investor will achieve the desired return because the investment result depends on many factors. But the State can commit to creating a free and equal business environment to be the strongest catalyst for effective investment. To create a truly free investment environment, the State does not force investors to fulfil the requirements specified in Article 11 of the 2020 Law on Investment.
In addition, investors are entitled to conduct business investment activities in industries and trades that are not prohibited by law. According to the current investment law, subjects are allowed to invest and do business in fields and industries not prohibited by law, instead of before, investing and doing business in industries permitted by law. For investment activities and business lines that are prohibited by law are specified in Clause 1, Article 6 of the 2020 Law on Investment. Of course, when conducting investment activities that are not prohibited by law, investors will still have to carry out necessary procedures as well as certain conditions as prescribed, especially for conditional business lines.
Third, the State guarantees the transfer of foreign investors’ assets abroad
The current law has kept the spirit of the old investment legal documents, continuing to recognize the right to transfer assets abroad of foreign investors having investment activities in Vietnam. The State allows investors to transfer abroad all kinds of assets: investment capital, investment liquidations, income from business investment activities, money and other property lawfully owned by the investor. investment.
However, this transfer of profits can only be carried out after the investor has fully fulfilled its financial obligations. The overseas transfer of the above amounts shall be made in a freely convertible currency at the exchange rate at the commercial bank selected by the investor. Currently, the remittance of profits abroad is regulated by Circular 186/2010/TT-BTC. This Circular specifically stipulates the profits that are not allowed to be remitted abroad to avoid investors taking advantage of forms such as transfer pricing, service fees, royalties to carry out acts of evading obligations. tax with the State.
Fourth, the State guarantees business investment in case of changes in the law.
The legal policy of a country is not a constant phenomenon. Based on the change of socio-economic relations, the state will amend or replace the old legal policies to match the new requirements of reality. The change of law has a great impact on the business activities of investors, in many cases destabilising, making it difficult for business investment activities. The State commits to guarantee business investment in case of changes in the law. Specifically:
Firstly, in case the newly issued legal document stipulates that investment incentives are higher than the investment incentives currently being enjoyed by the investor, the investor is entitled to investment incentives according to the provisions of the legal document. for the remaining incentive period of the project.
Second, in case the newly issued legal document stipulates that investment incentives are lower than the investment incentives previously enjoyed by the investor, the investor may continue to apply the investment incentives according to the previous regulations. that for the remaining incentive period of the project.
In case of changing the law for reasons of national defence, security, social order and safety, social ethics, community health, or environmental protection, investors are not entitled to incentives. before. At this time, the State ensures the interests of investors by one or a number of the following measures: Deducting actual losses of investors from taxable income; adjusting the operational objectives of the investment project; assisting investors to recover from damage.
Fifth, the State ensures a dispute settlement mechanism in business investment activities.
The State’s guarantee for investment activities does not include the guarantee that there will be no disputes during the implementation of the investment project. The principle of dispute settlement is first of all to respect the will of the parties to resolve themselves. Investors have the right to choose a dispute settlement mechanism suitable to the nature of the dispute and the requirements of the parties.
The State only participates in dispute settlement when the two sides have reached an impasse and have requested jurisdiction. From the perspective of economic management, Vietnam has built a flexible dispute settlement mechanism that respects investors’ right to self-determination and is in line with international practices, upholding the legitimate interests of investors. investors and sufficient reliability and safety in terms of enforcement of investment dispute resolution decisions. Specifically:
Firstly, disputes related to investment and business activities in Vietnam are resolved through negotiation and conciliation. In case no negotiation or conciliation is possible, the dispute shall be resolved at arbitration or a court.
Second, disputes between domestic investors, foreign-invested economic organisations or between domestic investors, foreign-invested economic organisations and related competent state agencies. related to business investment activities in the territory of Vietnam shall be resolved through Vietnamese Arbitration or Vietnamese Courts.
Third, disputes between investors in which at least one party is a foreign investor or an economic organization shall be settled through one of the following agencies or organizations: Vietnamese Court, Vietnamese arbitration. South, foreign arbitration, international arbitration, arbitration established by agreement of the disputing party.
Fourth, disputes between foreign investors and competent state agencies related to business investment activities in the territory of Vietnam shall be resolved through Vietnamese arbitration or Vietnamese courts, except for otherwise agreed upon under a contract or an international treaty to which the Socialist Republic of Vietnam is a signatory.
Thus, looking at investment security measures in comparison with the investment environment, it can be seen that the system of investment security measures is one of the factors that helps the State have a favourable environment. good investment market, increasing the attractiveness of capital sources of the investment environment.
Above is the consulting article on “Investment security measures under the Investment Law 2020″ of Apra Law Firm. If you still have questions about the above issues and need to be answered, please contact the hotline for advice and support.
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