PUBLIC–PRIVATE PARTNERSHIP (PPP) INVESTMENT IN VIETNAM
Legal basis:
- Law on Public-Private Partnership Investment
- Decree No.35/2021/ND-CP
Vietnam is a developing country, increasingly promoting bilateral and multilateral international partnerships. Therefore, the development of a legal framework creates advantages, and attracting foreign investment capital is always a top priority. In recent years, Vietnam has allowed investment projects in areas that bring high profits to investors along with special incentives to share the burden of ensuring work productivity. So, what are the Vietnamese regulations on investment in the public-private partnership? What conditions are needed to invest in a public-private partnership (PPP) in Vietnam?
Definition of PPP project
Under the Law on Public–Private Partnership Investment: Public-private partnership investment (hereinafter referred to as PPP investment) refers to a form of investment carried out by the fixed-term cooperation between the state and a private-sector investor through the conclusion and execution of a PPP project agreement to call for private sector involvement in a PPP project in the following areas:
– Transportation;
– Power grids, power plants, except hydropower plants and those subject to the state monopoly requirement as provided in the Law on Electricity;
– Water resources and irrigation; clean water supply; water drainage and wastewater treatment; waste management and disposal;
– Healthcare; education – training;
– Information technology infrastructure.
The scale of PPP projects ranges from 100 billion VND to more than 1,500 billion VND. It can be seen that the potential for investing in the public-private partnership is limitless.
Conditions to become a PPP investor
According to Decree No. 35/2021/ND-CP, to participate in PPP investment in Vietnam, investors need to ensure basic conditions for competent agencies to review and evaluate legal documents following national standards when participating in public-private partnership investment in Vietnam. Specifically:
– Having an establishment and operation registration certificate issued by a competent authority of the country or territory in which that investor is operating;
– Carrying out the independent financial accounting regime; ensuring competitive investor selection;
– Not in the dissolution process; not falling into the case of insolvency following the law on bankruptcy;
– Not subject to any prohibition against participation in PPP investment activities;
– Enterprises with 100% state-owned capital must enter into partnerships with private sector investors to participate in the bidding process;
– Investors established under foreign laws must meet market access conditions when participating in the process of selection of investors in projects in the relevant conditional sectors and trades, subject to the provisions of the law on investment.
Vietnam is improving the law on public-private partnerships investment day by day. This is Vietnam’s effort to gradually affirm its trustworthy position with investors and foreign capital sources when investing in Vietnam in nowadays challenging markets. Vietnam always takes prestige as a core value in cooperation, and investment incentive policies are increasingly expanding, “welcoming” foreign investors and capital sources.