In the context of rapid and complex economic development, effective land management plays a crucial role in promoting investment, developing infrastructure, and enhancing the quality of life. Especially for investment projects using land, the processes and procedures for selecting investors must ensure transparency and compliance with the latest legal regulations. Decree 115/2024/ND-CP, issued on September 16, 2024, includes significant amendments aimed at refining the legal framework and improving the efficiency of investor selection, in line with the requirements for sustainable social development.

This article will explore the process and procedures for selecting investors according to current regulations, as well as the rules governing the activities of enterprises established by investors to implement projects.

1. How the new decree regulates investor selection

Decree 115/2024/ND-CP stipulates the processes and procedures for selecting investors in land-use projects according to various bidding forms. For projects applying the open bidding method and limited bidding in a one-stage, one-envelope format, the implementation sequence will be as follows:

• Announce the investment project involving land use;
• Prepare for bidding to select the investor;
• Organize the bidding process to choose the investor;
• Evaluate bidding documents;
• Present, appraise, approve, and publicly disclose the results of investor selection;
• Negotiate, finalize, and sign the contract.

However, for projects requiring architectural works of significant value according to architectural law, which applies the public bidding method in a one-stage, two-envelope format, the investor selection process will be as follows:

• Announce the investment project involving land use;
• Prepare for bidding to select the investor;
• Organize the bidding process to select the investor;
• Evaluate technical proposal documents;
• Evaluate financial proposal documents;
• Present, appraise, approve, and publicly disclose the results of investor selection;
• Negotiate, finalize, and sign the contract.

Additionally, Decree 115 acknowledges cases related to projects with specific economic and social development requirements for certain sectors or regions…

2. Establishment of organizations to implement land-use investment projects after the investor wins the bid

According to Decree 115, investors who win bids will either directly implement the project or establish an economic organization to carry out the land-use investment project. For foreign investors, upon winning the bid, they must establish a company to be allocated land or lease land to implement the project in accordance with land law regulations. The procedures for establishment, management, operation, capital reception, dissolution, etc., will be conducted according to specialized legal regulations, with no significant differences from other enterprises.

At the time of preparing and submitting bidding documents, investors need to determine their implementation plan post-establishment, specifically whether they will establish a company to carry out the land-use investment project or not.

Regarding the charter capital of the company established by the investor to implement the project, please note that the investor’s company must hold 100% of the charter capital and meet the conditions for being allocated or leasing land according to land law regulations, as well as the conditions for establishing and managing an organization in accordance with investment, enterprises and land laws…

Regarding the rights and obligations of an enterprise established to implement a project, the enterprise will be allocated land or leased land by the state to implement an investment project using land. It will inherit the rights and obligations of the winning bid investor as committed in the bidding documents and stipulated in the project contract. Additionally, the company must fulfill financial obligations related to land use fees and lease payments according to regulations.

3. What should investors pay attention to when implementing a winning bid investment project

In addition to establishing an economic organization to carry out the investment project, as mentioned above, the investor or the company established by the investor will need to provide funding for compensation, support, and resettlement as required. If the investor fails to provide the necessary funds within the specified timeframe after being requested, the investor will not receive a refund of the contract performance guarantee according to the provisions of the law on bidding.

If during the implementation of the land-use investment project, the investor or the company established by the investor wishes to transfer part or all of the project, the transfer can only be conducted if it meets the following conditions: (i) compliance with investment, land and housing laws; (ii) approval from the relevant authorities; (iii) the investor receiving the transfer must meet the technical and financial capacity requirements to implement the investment project; (iv) the investor takes over the project must commit to inheriting all rights and obligations of the transferring party as stipulated in the investment project contract.

Implementing land-use investment projects involving State land currently requires compliance not only with land, housing, and investment laws but also with bidding regulations and other guiding decrees. Therefore, a timely grasp of new prohibitions will help ensure that the company adheres to current legal requirements during project implementation.

Time of writing: 19/09/2024

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