Decree 31/2021/ND-CP detailing and guiding the implementation of a number of articles of the Law on Investment takes effect from March 26, 2021 and replaces Decree 118/2015/ND-CP. Here are some new points and notes for businesses under Decree 31/2021/ND-CP:

1. Supplementing the list of restricted market access for foreign investors

This is a new highlight in Decree 31/2021/ND-CP compared to previous regulations. The list of industries and trades with restricted market access for foreign investors has been officially announced and promulgated, specifically as follows:

Foreign investors are not allowed to invest in 25 industries or trades that have not yet had access to the market as prescribed in Section A, Appendix I issued with this Decree: Trading in goods and services on the list of goods, services to perform state monopolies in the field of commerce, etc. The list of industries and trades with conditional market access for foreign investors includes 59 items. If choosing to invest in industries and trades other than these 84 industries (including those with conditional market access and those that have not yet had market access as mentioned in point a above), foreign investors will may apply market access conditions as for domestic investment regulations.

2. Additional subjects in industries eligible for investment incentives

Decree 31/2021/ND-CP has also added many objects of investment incentives, including:

• Invest in research and production of biotechnological products used as food.
• Manufacture of wooden products; production of artificial boards, including: plywood, jointed boards, MDF boards.
• Investment in development, operation and management of technical infrastructure works for industrial clusters.
• Invest in facilities to support the prevention and combat of gender-based violence in the community for sex workers.
• Invest in making use of waste heat to generate electricity from building material production facilities in order to save energy and protect the environment…

Currently, the number of industries eligible for investment incentives under the new regulations are: Science and technology, electronics, mechanics, material production, information technology (20 industries and occupations); Agriculture (11 industries and trades); Environmental protection, infrastructure construction (23 industries and occupations); Education, culture, society, sports, health (09 branches and professions); Other industries and occupations (04 industries and occupations).

3. Change and consolidate the list of investment projects in areas with difficult socio-economic conditions

Decree 31/2021/ND-CP specifically lists the list of areas eligible for investment incentives in areas with difficult socio-economic conditions or areas with extremely difficult socio-economic conditions. according to the provisions in Appendix III issued with the Decree.

4. Additional conditions for beneficiaries of investment incentives

According to point c, clause 4, Article 19 of Decree 31/2021/ND-CP, investment projects employing disabled workers must have at least 30% of the annual average regular employees to enjoy investment incentives.

For product distribution chains of small and medium enterprises, they are entitled to investment incentives when meeting the following conditions:

• At least 80% of participating enterprises are small and medium enterprises;
• There are at least 10 locations to distribute goods to consumers;
• A minimum of 50% of the chain’s revenue is generated by the small and medium enterprises participating in the chain.

5. Regulations on suspension of investment projects

Article 56 of Decree 31/2021/ND-CP stipulates the suspension of investment projects as follows: Conditions for the total suspension of investment projects must not exceed 12 months. In case the time limit is over from the date of suspension, the investment registration agency shall terminate or terminate part of the operation of such investment project.

In case of suspension of an investment project under a court judgment or decision, an effective arbitral award or a decision of a state management agency in charge of investment, the duration of the suspension shall be as follows: of an investment project shall be determined according to a judgment or decision of a court, an arbitral award or a decision of a state management agency in charge of investment.

6. Additional case of termination of operation of an investment project

Accordingly, Decree 31/2021/ND-CP has added the case of termination of operation of an investment project as:

Terminate the operation of an investment project in case the investor conducts investment activities on the basis of sham civil transactions in accordance with the civil law.
Terminate the operation of an investment project according to court judgments or decisions or arbitration awards.

7. Amendment of 08 Decrees related to business investment

Decree 31/2021/ND-CP amending and supplementing 08 Decrees related to business investment, including:

• Degree No 46/2014/ND-CP on Regulation on collection of land rent and water surface rent
• Degree No 52/2020/ND-CP on Golf course investment and Business
• Decree No 25/2020/ND-CP on elaboration of some articles of the law on bidding on investor selection
• Decree No 96/2016/ND-CP on providing for security and order conditions for a number of conditional business sectors
• Decree No 82/2018/ND-CP on management of industrial parks and economic zones
• Decree No 11/2013/ND-CP on investment management of urban development
• Decree No 99/2003/ND-CP on promulgating the regulation on high-tech parks
• Decree No 94/2020/ND-CP on preferential mechanisms and policies for vietnam national innovation center