INVESTMENT ASSURANCE METHODS
1. Legal basis:
Article 9, 10, 11, 12, 13 Investment Law 2014
2. Content:
One of the important legal issues that investors always pay attention to when investing in a new country is that the country has investment security measures to ensure their investment is taken effectively. Investment assurance methods includes the following methods:
Firstly, assurance of asset ownership. Vietnamese law committed that lawful assets of investors shall not be nationalized or confiscated by administrative measures. This provision helps investor to be confident when they decide to invest in Vietnam. However, in some essential and urgent circumstances, State can nationalize and confiscate asset ownership. Where an asset is bought or commandeered by the State of reasons of national defense and security, national interests, state of emergency, prevention or recovery of natural disaster, the investor shall be reimbursed or compensated in accordance with regulations of law on property commandeering and relevant regulations of law. Measures to ensure legal ownership for investors take effect since the investors start projects without registration any administrative proceedings.
Secondly, assurance business investment activities. One of the reasons investors consider investing in a country depends on whether the investor's investment activities are guaranteed to work smoothly. The State will not oblige investors to make requests such as prioritizing the purchase of domestic goods or having to buy and use domestic goods or locate their offices according to the locations requested by competent state agencies.
Thirdly, assurance of investor equality. The Vietnamese state must not discriminate against any domestic or foreign investors. Investors have to receive equal treatment. The State shall treat investors equally, adopt policies to encourage and create favorable conditions for investors to carry out business investment activities and sustainably develop economic sectors. Normally, ensuring equal treatment among investors is reflected in investment agreements between Vietnam and other countries.
Fourthly, assurance of transfer of foreign investors’ assets to abroad. This measure only applies for foreign investors. State allows foreign investors to transfer the assets to abroad which are capital and liquidations, income from business investments, money and other assets under the lawful ownership of the investors. However, only after are all financial obligations to Vietnamese government fulfilled, investors can transfer their assets to abroad. The remittance of the above items is done in a freely convertible currency at the exchange rate at the commercial bank chosen by the investor. Procedures for overseas remittance of money related to investment activities in accordance with the law on foreign exchange management.
Fifthly, assurance of business investment upon changes of laws. Where a new law that provides more favorable investment incentives that those currently enjoyed by investor is promulgated, investors shall enjoy the new incentives for the remaining period of the incentive enjoyment of the project. Where a new law that provides less favorable investment incentives that those currently enjoyed by investor is promulgated, investors shall keep enjoying the current incentives for the remaining period of the incentive enjoyment of the project.
