On 16 September 2024, the Government issued Decree No. 115/2024/ND-CP, providing guidance on the Bidding Law on selecting investors to implement investment projects using land. This Decree details several provisions of the Law on Land 2024 and Law on Bidding 2023 regarding investor’s selection through bidding for investment projects using land. Particular attention is given to incentive policies that would attract and encourage investors to participate in projects using land.
In this article, BLawyers Vietnam presents 05 important notes regarding incentives in the selection of investors to implement investment projects using land.
1. The general conditions for organizations participating in the investor selection bidding process
Organizations participating in bidding to select investors when implementing investment projects using land shall satisfy the following conditions:
- They shall be eligible to receive land allocation or lease from the State according to the provisions of law;
- They shall fulfill conditions for land allocation, leasing, and permission for land-use conversion purposes according to the provisions of the law in the cases of land allocation or land lease to implement investment projects; and
- They shall comply with conditions according to the provisions of the law on bidding.
Of further note, foreign investors participating in the bidding process to select investors to implement projects using land shall satisfy conditions (ii) and (iii). If winning a bid, the investor shall establish an economic organization to be allocated or leased land to implement the project.
2. Eligible investors for incentives in bidding for implementing investment projects using land
Investors who implement investment projects using land are eligible for bidding incentives, including:
- Investors who propose solutions utilizing advanced technology, high technology, environmentally friendly technology, and the best available techniques to minimize environmental pollution for projects classified as high environmental risk according to the provisions of the law on environmental protection; or
- Investors who commit to technology transfer, implementing high technologies or high-tech products on the List of high technologies prioritized for investment and development and on the List of high-tech products encouraged for development issued by the Prime Minister according to the provisions of the law on high technology, or on the List of technologies encouraged for transfer according to the provisions of the law on technology transfer.
3. Applicable incentives in selecting investors to implement projects using land through bidding
When participating in bidding, if investors are eligible for incentives, they will have advantages at the bid evaluation stage, as follows:
- A higher ranking for investors eligible for incentives if the investors eligible for incentives and investors that are not eligible for incentives are evaluated equally; and
- Additional points to the total score for comparison and ranking.
Incentive points will be calculated according to the incentive level. In this case, the incentive level is 5% for investors in section 2.(i); and 2% for investors in section 2.(ii).
4. The incentive calculation method applies to investors
The total score of investors eligible for incentives is calculated according to the following formula:
T’TH = TTH + TTH x MUD
Of which:
- T’TH is the total score of investors receiving incentives, including the incentive level for comparison and ranking;
- TTH is the total score of investors receiving incentives when the incentive level is not included; and
- MUD is the incentive level that investors are entitled to according to regulations.
5. Other notes for investors eligible for incentives in selecting investors to implement investment projects using land
When participating in the bid, investors shall submit documents proving the solution to apply advanced technology, high technology, environmentally friendly technology, the best available techniques, and the right to legally use the technology according to provisions of laws on high technology, technology transfer, environmental protection, and other relevant laws to entitle incentives.
In addition, investors are eligible for incentives according to section 2 above; if selected to sign a contract, they shall adhere to the commitments in the bidding dossier and the investment project contract using land. If the investor does not fulfill their commitments as outlined in the bidding dossier and project contract after receiving incentives, they will be fined for violating the contract.
Lastly, the investors are obligated to fulfill commitments on solutions to apply the best available technology and techniques to minimize environmental pollution; on technology transfer; and high-tech activities proposed in the bidding dossier in order to receive bidding incentives.
The above is not official advice from BLawyers Vietnam. If you have any questions or suggestions about the above, please contact us at info@blawyersvn.com. BLawyers Vietnam would love to hear from you.
Date: 12 November 2024
Writers: Thanh Huynh and Chau Dang
