Lawyer, I would like to ask about the case where an FDI company has exceeded the capital contribution deadline but has not yet contributed. Can the company now apply for an extension of the capital contribution period? Is there a possibility of being required to terminate the investment project? I hope to receive your advice.
Answer:
Thank you for trusting and sending your question to Luật Kỳ Vọng Việt. Regarding your question, the lawyer responds as follows:
The Law on Investment 2020 does not specifically provide for allowing FDI companies to extend the capital contribution period once the deadline stated in the Investment Registration Certificate (IRC) has expired. Therefore, when the deadline recorded in the IRC has passed and the investor has not yet contributed the full capital, one of the following consequences may occur:
1. Administrative Penalties and Mandatory IRC Adjustment
If the investment deadline stated in the IRC has expired but the investor has not yet contributed funds to the project, this is considered a violation of the “failure to comply with the content of the Investment Registration Certificate”. As a result, the investor will be subject to administrative penalties under Clause 2, Article 19 of Decree 122/2021/ND-CP, with a fine ranging from VND 70 million to VND 100 million.
After paying the fine as required, the investor must submit a set of documents to adjust the capital contribution period recorded in the IRC and complete the capital contribution as newly registered. However, if the investor fails to contribute even after adjusting the deadline, the project may be subject to termination (based on Point d, Clause 2, Article 47 and Point a, Clause 2, Article 48 of the Law on Investment).
It should be noted that not all localities allow investors to pay fines and extend the capital contribution period. Therefore, if an investor needs to complete this procedure, they should check local policies and review whether the business has complied with legal regulations.
2. Forced Termination of the Investment Project
As mentioned above, the Law on Investment does not include provisions for extending the capital contribution period for FDI companies. Therefore, if the deadline has passed and the investor has not contributed capital, the investment registration authority may request the termination of the project due to non-compliance with the Investment Registration Certificate.
In practice, some provinces and cities in Vietnam have already applied this sanction to investors who fail to contribute sufficient capital. However, other localities that aim to attract investment may allow investors to pay fines and adjust the IRC.
The suspension and termination of investment projects are clearly regulated under Articles 47 and 48 of the Law on Investment 2020 and further guided by Articles 57 to 60 of Decree 31/2021/ND-CP.
Thus, failing to contribute the required capital within the prescribed timeframe carries a high risk of project termination.
This legal consultation is for informational and research purposes only. The cited regulations may become invalid at the time you read this article. Please contact us at 1900 633 298 for the most accurate and up-to-date advice.
Best regards!
