Refund of escrow deposit to secure investment project execution

Refund of escrow deposit to secure investment project execution

Deposit can be considered as a measure to secure investors’ investment project execution. What is the procedure for refunding of deposit once the investors receive that amount of money? The following article shall provide an in-depth and comprehensive understanding of the aforementioned matter.

I. Relating regulations:

Law on investment 2020
Decree 31/2021/NĐ-CP elaborating of some articles of the Law on investment
Circular 03/2021/TT-BKHDT prescribing templates for documents and reports related to investment activities in Vietnam, outward investment activities and investment promotion activities.

II. Consultation from HTC Vietnam law firm

Escrow deposit is an act for an investor to secure investment project execution. Secure for execution of investment projects is prescribed under Article 25 Decree 31/2021/NĐ-CP

1. The investor shall receive refund of the deposit as follows:

- 50% of the deposit shall be returned when the investor completes procedures for land transfer, land lease, or land repurposing and obtain other licenses/approvals to commence the construction (if any) according to the schedule on the Investment Registration Certificate or decision on investment guidelines;

- The remaining deposit and interest on which (if any) shall be returned when the investor accepts the construction and installation for the project to be inaugurated according to the schedule on the Investment Registration Certificate or decision on investment guidelines;

- Where the project capital is decreased, the investor shall receive a refund of an amount of deposit which is equal to the decrease in capital according to the adjusted Investment Registration Certificate or adjusted decision on investment guidelines;

- Where the execution of an investment project cannot be continued because of a force majeure event or on account of a competent authority while following administrative procedures, the investor may claim the refund of the deposit under an agreement of the investment registration authority

2. Procedure for refunding deposit to secure investment project execution

Regardless of the refund being 50% of the escrow amount or the remaining amount plus interest, investors shall follow the following procedure:

Step 1: Investor submit file application for refunding of escrow deposit to the Investment registration authorities

Step 2: Within 5 working days since the datey of receiving a valid application, the Investment registration authorities examine and send notice in writing about refunding deposit to the commercial bank where investors chose to put money in and send the notice to investors at the same time (through receive dossiers and return results department)

3. Application for refunding deposit

3.1. Refunding 50% of initial deposit:

In accordance with the regulations, investors who complete procedures for land transfer, land lease, or land repurposing and obtain other licenses/approvals to commence the construction (if any) according to the schedule on the Investment Registration Certificate (IRC) or written decision on investment guidelines will be refunded 50% of deposit.

Composition of application:

- A request for deposit refund in writing (original document)

- Decision of the People's Committee of the province on land allocation, land lease, permission to change land use purpose. Results of executing procedures for land allocation, land lease, permission to change land using purpose.

- Construction permission (a valid copy)

- Investment registration certificate, Business registration certificate (a valid copy)

- Escrow deposit certificate or deposit guarantee from a bank (a valid copy)

3.2. Refunding remaining deposit and interest

Composition of application:

- A request for deposit refund in writing (original document)

- Minutes of acceptance of completed work volume (valid copy)

- A report on monitoring and evaluation of project investment execution

- Construction permission (a valid copy)

- Investment registration certificate, Business registration certificate (a valid copy)

- Escrow deposit certificate or deposit guarantee from a bank (a valid copy)

4. Method of application

- Investors apply dossiers directly in person or through post office

5. Number of application

- Investors have to prepare and submit file 4 dossiers (including at least 1 original document)

The aforementioned are the consultations about refunding of deposit to secure investment project execution. HTC Law Firm is pleased to accompany clients with all legal problems. For the best consultancy service, please get in touch with us.

For more details, please contact:

HTC Vietnam Law Firm

Address: 15th Floor, Multipurpose Building, 169 Nguyen Ngoc Vu, Trung Hoa Ward, Cau Giay District, Hanoi.

Tel: 0989.386.729; Email: [email protected]

Website: https://htc-law.com; https://luatsuchoban.vn