Counsel Than Trong Ly

Associate Nguyen Bao Ngoc - Para Nguyen Thị My Linh

DIMAC Law Firm

You may know that fulfilling investment reporting regime is a mandatory requirement for Foreign-Invested Companies during the implementation of investment projects in Vietnam

Foreign-invested companies and foreign investors (the “Investor”) engaged in registered investment projects in Vietnam must adhere to report investment activities to the competent authority during the implementation of an investment project under the granted Investment Registration Certificate (“IRC”). Nevertheless, not all Investor pay attention to these reporting obligations. Despite having undertaken projects for an extended period, certain Investor has not yet submitted any reports on their investment activities.

In accordance with the current Laws on Investment, the Investor is required to fulfill reporting obligations to the competent authorities, including:

1.     Report on investment activities

As prescribed in Article 72.2(a) of the Law on Investment, the Investor is required to submit the investment activities report quarterly and annually. Quarterly reports must be submitted prior to the 10th of the first month of the quarter following the reporting quarter and annual reports must be submitted prior to 31^st March of the subsequent year following the reporting year as stipulated in Article 102 of Decree 31/2021/ND-CP guiding the implementation of the Law on Investment. The Investor shall submit online reports via the National Investment Information System.

2.     Report on investment monitoring and evaluation

As prescribed in Article 100.8 and Article 100.11 of Decree 29/2021/ND-CP, the Investor is required to submit the periodic investment monitoring and evaluation reports semi-annually, annually and before the amendment of the investment project. Semi-annually reports must be submitted prior to 10^th July of the reporting year, annual reports must be submitted prior to 10^th February of the following year and report prior to project amendment must be submitted together with the dossier for IRC amendment. The Investor shall submit these reports in writing directly to the investment registration authority.

Failing to comply with such reporting regime, the Investor may face administrative penalties, such as: (i) a penalty ranging from VND 30,000,000 to VND 50,000,000 for failing to fulfill investment activity report obligations; or (ii) a penalty ranging from VND 20,000,000 to VND 30,000,000 for non-compliance of project monitoring and evaluation report obligations. Additionally, the Investor is mandated to fulfill reporting obligations as part of remedial measures, as specified in Article 15 of Decree 122/2021/ND-CP.

It is worth noting that fully complying with the investment reporting regime is a mandatory condition to get the approval from the investment license authority to amend the IRC. Upon requesting an amendment to the IRC, even for a minor change such as a name modification, the investment licensing authority will verify the online database and request proof of report submissions to ensure that all required reports have been duly filed. Normally, in case the Investor has not yet implemented the investment reporting regime, the investment registration authority shall request them to supplement the lacking report prior to issuing the amended IRC. Nevertheless, based on our recent experiences with similar cases at the local Department of Planning and Investment (the “DPI”), if DPI detects the Investor fail to fulfill the reporting obligations, they will promptly notify inspection agency for violation handling. Accordingly, the DPI shall temporarily suspend processing of the dossier for IRC amendments until the Investor fulfills its investment reporting regime and resolve the handling of administrative violations with the inspection agency. Consequently, the Investor not only incurs a financial penalty but also experiences repercussions in terms of the project's execution.

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