Investment in the form of Public-Private Partnership is an investment form that is carried out on the basis of a project contract between a competent state agency and an investor or project enterprise for the construction or renovation, operation, infrastructure management and public service delivery.
This is a form of investment that can mobilize both private and domestic capital. However, the effectiveness of these model has not been achieved especially in recent years while ODA funding has been narrowed down.
The Decree No. 63/2018/ND-CP dated on May 4, 2018, the decree on investment in the form of public-private partnerships has been promulgated, as effective on June 19, 2018, replacing Decree 15/2015/ND-CP.
This decree is expected to provide detailed, specific and separate basis for this type of investment. The PPP models mentioned in the decree include: Project contract; Build-Operate-Transfer contracts (BOT); Build-Transfer-Operate contracts (BTO); Build-Transfer contracts (BT); Build-Own-Operate Contracts (BOO); Build-Transfer- Lease Service Contacts (BTL); Build – Lease Service– Transfer Contracts (BLT); Operate – Management Contract (O & M) and Mixed Contract.
Decree 63/2018/ND-CP created an open payment mechanism for investors in construction-transfer contracts. Accordingly, investors who execute investment projects under BT contracts shall be paid by the State with land (use of land use right value) or by other modes of payment such as working office project, infrastructure assets in accordance with the law on management and use of public assets,payment by business right transfer, right of exploitation of works, services according to specialized law.
In addition to expanding the payment method, investors under the BT contract do not have to follow the order and procedures for deciding the investment policy and deposit in accordance with the law for implementation of other projects. However, investors must meet additional requirements on equity (if any) in accordance with the law on investment, construction, housing, real estate business and relevant laws to implement the others project.
Regarding owner and capital raised by investors, the Decree has stricter regulations than before to ensure that the project implementation process is stable. Accordingly, for projects with total investment capital of up to VND 1,500 billion, investors’ equity ratio must not be lower than 20% of total investment capital; for the project that has a total investment capital of over VND 1,500 billion, it is determined on the principle that the owner’s equity must not be lower than 20% of the charter capital of up to VND 1,500 billion, and forthe capital of over VND 1,500 billion, the owner’s capital must not be lower than 10%.
We will continue to conduct Vietnamese media search and legal Vietnamese research to update client on public private partnership investment into Vietnam.
We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers have Attorneys in Hanoi, Attorneys in Ho Chi Minh and Attorneys in Danang.
How ANT Lawyers Could Help Your Business?
Please click here to learn more about ANT Lawyers Foreign Investment Practice or contact our lawyers in Vietnam for advice via email ant@antlawyers.vn or call our office at +84 28 730 86 529
With the rise of the digital age, Vietnam has experienced rapid growth in internet usage,…
Foreign companies entering Vietnam's thriving market face unique legal questions, especially around employing local talents.…
On October 3, 2024, Thailand’s Department of Foreign Trade (DFT) had officially launched an anti-dumping…
Introduction For foreign businesses eyeing the fast-growing Vietnamese market, setting up a Vietnam Representative Office…
On September 25, 2024, the Ministry of Industry and Trade officially initiated an anti-dumping investigation…
The Weinstein International Foundation (WIF) has officially launched the 2024 International Mediation Writing Competition (IMWC2024).…