Decree 124/2017/ND-CP regulating offshore investment in oil and gas activities

DECREE

ON OUTWARD INVESTMENT IN PETROLEUM INDUSTRY

Pursuant to the Law on Government Organization dated June 19, 2015;

Pursuant to the Law on Investment dated November 26, 2014;

Pursuant to the Law on management and utilization of state capital invested in the enterprise’s manufacturing and business activities dated November 26, 2014;

Pursuant to the Law on Public Investment dated June 18, 2014;

At the request of Minister of Industry and Trade;

The Government hereby adopts a Decree on outward investment in petroleum industry.

Chapter I

GENERAL PROVISIONS

Article 1. Scope

1. This Decree provides for outward investment in petroleum industry by the investors.

2. Outward petroleum investment in the forms specified in Point d, Clause 1, Article 52 of the Law on Investment shall not be regulated in this Decree.

3. The investor making outward investment in petroleum industry must comply with regulations of the Law on Investment, this Decree and other relevant regulations of law. In case regulations of this Decree are different from those of other Decrees on the same issue, the regulations of this Decree shall apply.

Article 2. Regulated entities

This Decree applies to regulatory authorities, investors and organizations related to outward investment in petroleum industry.

Article 3. Definitions

For the purposes of this Decree, the terms below shall be construed as follows:

1. “petroleum industry” means the exploration, oilfield development and extraction of petroleum products, including the activities directly serving such activities such as establishment of petroleum projects and marketing of petroleum products obtained from the investor’s petroleum project.

2. “petroleum agreement” means a written agreement signed between the representative of the petroleum owner and an investor or other partners, under which the investor then enters into the petroleum agreement through the receipt of transfer of the right to enter into such agreement or in other forms in accordance with laws of the country or territory that receives investment (below collectively referred to as “host country”).

3. “operator” is a juridical person established by the investor in accordance with regulations of law or by the agreement with a partner or hired or designated in a foreign country or a person designated or hired by the investor in the petroleum project to operate the overseas petroleum project under the agreement between parties, and laws of the host country.

4. “operating company” means an organization established by the investor as prescribed in Article 17 of this Decree and relevant laws to prepare for investment and establish projects or operate or execute the overseas petroleum project in conformity with laws of the host country or international petroleum industry practices.

5. “outward investment capital” means the amount and assets transferred abroad by the investor to gain the right to participate in the project or contribute capital to the project and profits distributed to the investor for investment in the project. Revenues received by the investor and transferred back to the investor’s home country shall be offset against the total capital transferred abroad upon determination of the outward investment capital of the investor.

6. “investor’s profit” means the after-tax profit from a petroleum agreement or the dividends received by the investor from a joint venture agreement or a joint-stock company or the after-tax payment for a service contract after deducting expenses incurred over the period and other profits as stated in the petroleum agreement (if any).

7. “direct representative of state capital owner in a wholly state-owned enterprise” refers to the person appointed by a competent authority to the Board of Members or as the President of that enterprise in order to exercise his/her right and perform his/her duties as a representative of state ownership retained in such enterprise.

8. “national foreign investment portal” means a portal used for following procedures for issuance and adjustment of investment registration certificate and outward investment registration certificate; for posting and updating legal documents, policies, procedures and requirements for investment to be satisfied by foreign investors and foreign-invested business entities that do business in Vietnam, and organizations and individuals that make outward investment. The national foreign investment portal is dautunuocngoai.gov.vn or fdi.gov.vn.

9. “national data on outward investment” means a collection of data and information about outward investment projects nationwide that is stored and managed in the national information system of inward investment and outward investment. The information stored in the national database on outward investment is original information about outward investment projects.

10. “national information system of inward and outward investment” means a professional information system on inward and outward investment that is established and operated by the Ministry of Planning and Investment in cooperation with authorities in order to send, receive, store, and display data or follow other professional procedures for data to serve the state management of outward investment.

11. “valid application” means an application including sufficient compositions, quantity and sufficiently declared in accordance with regulations of the Law on Investment, this Decree and forms issued by the Ministry of Planning and Investment.

Article 4. Outward investment capital

Outward investment capital is represented in the following forms:

1. The foreign currency account of the licensed credit institution or purchased in the licensed credit institution in foreign currencies or foreign exchange from other legal capitals in accordance with regulations of law.

2. Vietnam dong in accordance with regulations on foreign exchange administration.

3. Machinery, equipment, raw materials, fuel, finished and semi-finished products.

4. Value of industrial property rights, technical know-how, technology process, technical services, intellectual property rights and brands.

5. Other legal assets.

Article 5. Transfer of foreign currency, goods, machinery and equipment abroad for market research, investment opportunity and investment preparation

1. The investor may transfer foreign currency from the main foreign currency account, goods, machinery and equipment abroad for market research, investment opportunity and investment preparation before the outward investment certificate is issued, including:

a) Market research and investment opportunities;

b) Field survey;

c) Document study;

d) Collection and purchase of documents and information concerning selection of petroleum projects;

dd) Consolidation and assessment of investment projects, including selection of a consultant to do so.

e) Organization of and participation in scientific workshops or conferences;

g) Establishment and operation of the organizations specified in Article 17 of this Decree, operation of representative offices, contact offices, branches and operating offices or other representing forms in accordance with regulations of the host country involved in the preparation and establishment of the petroleum project;

h) Collection of information serving purchase or merger of companies, deposit, escrow deposit or other financial guarantees, payment of expenses and charges at the request of the seller or in accordance with the laws of the host country;

i) Petroleum agreement negotiation;

k) Purchase or lease of assets in service of establishment of overseas petroleum projects;

l) Payment of fees with a payment period not exceeding 60 days from the effective date of the petroleum agreement;

m) Other necessary activities.

2. Foreign currency transfer limit is specified in Clause 1 of this Article

a) The foreign currency transfer limit shall not be less than or equal to US$ 500,000 (five hundred thousand) and is included in the total outward investment capital;

b) In case the investor that is a wholly state-owned enterprise or subsidiary of the wholly state-owned enterprise, the transactions that are made as prescribed in this Clause with a value of more than US$ 500,000 (five hundred thousand) shall be approved by the State Bank of Vietnam after comments of the representative agency of state capital owner are given;

c) In case the transactions with a value of less than or equal to US$ 500,000 (five hundred thousand) are made by the wholly state-owned enterprise or the investor that is the subsidiary of the wholly state-owned enterprise, the direct representative of state capital owner shall submit a written declaration to the representative agency of state capital owner that foreign currencies are transferred abroad in accordance with Clause 1 of this Article and be responsible to law for such commitment;

d) In case the investor is not regulated in Points b and c of this Clause, the transactions that are made as prescribed in Clause 1 of this Article with a value of more than US$ 500,000 (five hundred thousand) shall be approved by the State Bank of Vietnam.

3. The transfer of goods, machinery and equipment abroad according to Clause 1 of this Article shall be compliant with regulations of the law on export, customs and technology.

4. The investor may made transactions before he/she is issued with an outward investment certificate in order to participate in international bidding or other security measures before entering into an official negotiation with partners, such as: deposit, escrow deposit or other financial guarantees at the request of the procuring entity, host country, with a transaction value of less than or equal to US$ 02 (two) million.

a) In case the investor is a wholly state-owned enterprise or subsidiary of the wholly state-owned enterprise, the transactions that are made as prescribed in this Clause with a value of more than US$ 02 (two) million shall be approved by the State Bank of Vietnam after comments of the representative authority of state capital owner are available;

b) In case the transactions with a value of less than or equal to US$ 02 (two) million are made by the wholly state-owned enterprise or the investor that is the subsidiary of the wholly state-owned enterprise, the direct representative of state capital owner shall submit a written declaration to the representative agency of state capital owner that foreign currencies are transferred abroad in accordance with this Clause and be responsible to law for such commitment;

c) In case the investor is not regulated in Points a and b of this Clause, the transactions that are made as prescribed in this Article with a value of more than US$ 02 (two) million shall be approved by the State Bank of Vietnam;

d) The procedures for granting approval by the State Bank of Vietnam for investor’s request prescribed in Clauses 2 and 4 of this Article shall be followed as prescribed in Article 7 of this Decree.

Article 6. Rules for transfer of foreign currency abroad before the issuance of the outward investment registration certificate

1. The amount of foreign currency transferred abroad before the issuance of the outward investment registration certificate shall be included in the total outward investment capital and transferred through 01 foreign currency account at 01 credit institution of Vietnam before the issuance of the outward investment registration certificate.

2. When applying for registration of outward investment-related forex transactions, the investor must inform the State Bank of Vietnam of the amount of foreign currency transferred abroad before being issued with the outward investment registration certificate in order to have such amount recorded as outward investment.

3. When transferring foreign currency abroad before issuance of the outward investment registration certificate to the investor, the credit institution shall request the investor to provide appropriate documents to ensure that the foreign currency abroad before issuance of the outward investment registration certificate is transferred and expenses for investment preparation by the investor are provided as prescribed in the Law on Investment and this Decree; to inform the State Bank of Vietnam of the investor’s transfer of foreign currency through the account used for transfer of foreign currency abroad before issuance of the outward investment registration certificate at a credit institution.

4. After the project is issued with the outward investment registration certificate, the abovementioned foreign currency account shall be used as an investment capital account and registered with the State Bank of Vietnam as prescribed by law. Any payments relating to transfer of foreign currency abroad before issuance of the outward investment certificate shall be made through this account.

5. The State Bank of Vietnam shall elaborate this Article.

Article 7. Procedures and applications for transfer of foreign currency abroad in the case prescribed in Clause 2 and Clause 4, Article 5 of this Decree

1. The application includes:

a) A written request for transfer of foreign currency abroad, including the investor’s explanation for request for transfer of foreign currency abroad before issuance of the outward investment registration certificate;

b) Comments of the representative authority of state capital owner (applicable to the case specified in Point b, Clause 2 and Point a, Clause 4, Article 5 of this Decree);

c) A copy from the master register or certified true copy or copy presented together with the original for comparison of the investor’s business registration certificate or equivalent documents.

2. The procedures for granting approval for transfer of foreign currency abroad before issuance of the outward investment certificate

a) The investor shall submit 01 application specified in Clause 1 of this Article, directly or by post, to the State Bank of Vietnam;

b) In case the application is insufficient, within 03 working days from the day on which the application is received, the State Bank of Vietnam shall submit a written request for completion of the application to the investor;

c) Within 10 working days from the day on which a sufficient application is received, the State Bank of Vietnam shall consider granting approval for or reject the transfer of foreign currency abroad. In case of rejection, the State Bank of Vietnam shall provide explanation in writing.

Article 8. Language used in outward investment project dossier

1. The investment project dossier, documents and reports submitted to Vietnam’s regulatory authorities shall be made in Vietnamese.

2. In case the investment project dossier is made in foreign languages, the investor shall submit a copy in the foreign language and a Vietnamese translation thereof.

3. In case the investment project dossier is made in Vietnamese and foreign languages, a Vietnamese version shall be used to follow administrative procedures for investment.

Chapter II

INVESTMENT GUIDELINE DECISION, INVESTMENT DECISION AND PROCEDURES FOR ISSUANCE OF OUTWARD INVESTMENT REGISTRATION CERTIFICATE

Article 9. Applications for issuance of outward investment certificate

1. An application for issuance of outward investment registration certificate includes:

a) The application for issuance of outward investment registration certificate shall be made as prescribed in Clause 1, Article 55 of the Law on Investment for the project whose outward investment guidelines are decided by the National Assembly and Prime Minister, and Clause 2, Article 59 of the Law on Investment for the project that is exempt from outward investment guidelines;

b) Written confirmation given by the tax authority of investor’s fulfillment of tax liability by the time the investment project dossier is submitted according to Clause 5, Article 58 of the Law on Investment.

2. Other equivalent documents certifying the investor's legal status specified in the Law on Investment include one of the following papers: investment license or investment certificate or investment registration certificate if the investor is the foreign-invested enterprise in Vietnam or business registration certificate or establishment decision.

3. For the outward investment projects of the wholly state-owned enterprise, the outward investment decision specified in Point e, Clause 1, Article 55 of the Law on Investment includes the following documents:

a) The written approval granted by the representative agency of state capital owner to the investor for execution of the outward investment project, including the following information: investor, objectives, scope, forms and place of investment, total investment, capital raising plan, capital structure, project progress and investment efficiency criteria to be achieved;

b) A report on internal assessment of proposals for outward investment as the basis for the approval granted by the representative agency of state capital owner according to Point a of this Clause.

4. The documents specifying place where the investment project is executed include one of the following ones:

a) Petroleum agreement or investment agreement signed with the partner or agreement on receipt of transfer of rights to participate in petroleum agreements or transfer of part or entire company;

b) Investment license or equivalent documents of the host country;

c) Notification of contract award.

5. The investor shall be responsible to law for accuracy and truthfulness of the documents and registration information in accordance with regulations of the Law on Investment and this Decree.

Article 10. Applications and procedures for issuance of investment guideline decision by the National Assembly

Applications and procedures for issuance of investment guideline decision by the National Assembly are specified in Article 56 of the Law on Investment, this Decree and relevant legal documents.

Article 11. Applications and procedures for investment guideline decision by the Prime Minister and issuance of outward investment registration certificate

1. The investor shall submit 08 applications for issuance of the outward investment registration certificate (including one original application) to the Ministry of Planning and Investment and register investment information on the national data system of outward and inward investment.

2. 7The applications shall be received by the Ministry of Planning and Investment when they sufficiently include the document items prescribed in this Decree and have been registered on the national data system of outward and inward investment, except for the project dossier on the lists of State secrets, the Law on State secret protection shall be complied with.

3. The Ministry of Planning and Investment shall inspect the validity of applications. In case the application is invalid or has the information that needs to be clarified, the Ministry of Planning and Investment shall issue a written notice to the investor within 05 working days from the day on which the application is received.

4. The Ministry of Planning and Investment shall send enquiries to the Ministry of Industry and Trade, the Ministry of Finance, the Ministry of Labor, Invalids and Social Affairs, the State Bank of Vietnam and the People’s Committee of the province or central-affiliated city (hereinafter referred to as “People’s Committee of province”) where the headquarters of the investor is located within a time limit prescribed in Clause 2, Article 55 of the Law on Investment.

5. The enquired authorities shall send written comments about the issues within their competence to the Ministry of Planning and Investment within the time limit prescribed in Clause 3, Article 55 of the Law on Investment. After the time limit, if no written comments are sent, it will be considered that the enquired authorities approve the investment project dossier.

6. The Ministry of Planning and Investment shall assess, prepare an assessment report and submit it to the Prime Minister according to information and time limit prescribed in Clause 4, Article 55 of the Law on Investment.

7. Within 10 working days from the day on which the assessment report submitted by the Ministry of Planning and Investment is received, the Prime Minister shall issue outward investment guideline decision according to Clause 5, Article 55 of the Law on Investment.

8. For the outward investment project of the wholly state-owned enterprise, after receipt of the outward investment decision, the representative agency of state capital owner shall make a decision on outward investment as prescribed in Article 29 of the Law on management and utilization of state capital invested in the enterprise’s manufacturing and business activities, this Decree and such enterprise’s Charter. For the subsidiary of the wholly state-owned enterprise (parent company), the decision on outward investment shall be made by the parent company as prescribed in the Charter, Financial Regulation and relevant laws.

9. Within 05 working days from the day on which the decisions specified in Clauses 7 and 8 of this Article are received, the Ministry of Planning and Investment shall issue the outward investment registration certificate to the investor and each of its copy to the Ministry of Industry and Trade, the Ministry of Finance, the Ministry of Foreign Affairs, the Ministry of Labor, War Invalids and Social Affairs, the State Bank of Vietnam and the People’s Committee of the province where the headquarters of the investor is located.

10. In case the Prime Minister rejects the outward investment guidelines, within 03 working days from the day on which the written rejection is received, the Ministry of Planning and Investment shall provide explanation for the rejection of issuance of the outward investment registration certificate in writing.

Article 12. Applications and procedures for issuance of outward investment registration certificate if the project is exempt from outward investment guidelines

1. The investor shall submit 03 applications for issuance of the outward investment registration certificate (including one original application) to the Ministry of Planning and Investment and register investment information on the national data system of outward and inward investment.

2. The applications shall be received by the Ministry of Planning and Investment when they sufficiently include the document items prescribed in this Decree and have been registered on the national data system of outward and inward investment, except for the project dossier on the lists of State secrets, the Law on State secret protection shall be complied with.

3. The Ministry of Planning and Investment shall inspect the validity of applications. In case the application is invalid or has the information that needs to be clarified, the Ministry of Planning and Investment shall issue a written notice to the investor within 05 working days from the day on which the application is received.

4. The investor or a licensed credit institution shall make a commitment to prepare foreign currencies to make outward investment. If a capital in foreign currency of at least VND 20 billion is transferred abroad and does not belong to the project prescribed in Article 54 of the Law on Investment, the Ministry of Planning and Investment shall send enquiries to the State bank of Vietnam according to Clause 3, Article 58 of the Law on Investment. Within 07 working days from the day on which the enquiries sent by the Ministry of Planning and Investment are received, the State Bank of Vietnam shall send enquiries to the Ministry of Planning and Investment. After the time limit, if no written comments are sent, it will be considered that the State Bank of Vietnam approves the investment project dossier.

5. The Ministry of Planning and Investment shall issue the outward investment registration certificate according to the time limit specified in Clause 3, Article 59 of the Law on Investment and each of its copy to the Ministry of Industry and Trade, Ministry of Finance, the Ministry of Foreign Affairs, the Ministry of Labor, War Invalids and Social Affairs, the State Bank of Vietnam and the People’s Committee of the province where the headquarters of the investor is located.

6. In case the application is ineligible for issuance of the outward investment registration certificate, the Ministry of Planning and Investment shall provide explanation for the rejection of issuance of the outward investment registration in writing.

Article 13. Shortening the time limit for assessment and issuance of the outward investment registration certificate if the project whose outward investment guidelines is decided by the National Assembly

In case of at the request of the host country or according to regulations of the bidding document or in other similar cases where the investor is requested to participate in and execute the project before the time the outward investment registration certificate is issued according to the procedures prescribed in Article 10 of this Decree, the investor shall make a request and the outward investment registration certificate shall be assessed and issued as follows:

1. The investor shall submit the petroleum project dossier prescribed in Clause 1, Article 55 of the Law on Investment and this Decree to the Ministry of Planning and Investment and a written notice specifying the reasons for shortening the time limit for assessment and issuance of the outward investment registration certificate.

2. The Ministry of Planning and Investment shall inspect the validity of dossiers. In case the dossier is invalid or has the information that needs to be clarified, the Ministry of Planning and Investment shall issue a written notice to the investor within 02 working days from the day on which the dossier is received.

3. Within 03 working days from the day on which the sufficient dossier specified in Clause 1 of this Article is received, the Ministry of Planning and Investment, the Ministry of Planning and Investment shall request the Prime Minister to establish a State assessment council.

4. Within 30 days from the date of establishment, the State assessment council shall assess and prepare an assessment report including the contents specified in Clause 4, Article 55 of the Law on Investment.

5. Within 05 working days from the date of meeting of the assessment council, the State assessment council shall request the Prime Minister and the National Assembly to issue the outward investment guideline decision. The necessary documents are specified in Clause 4, Article 56 of the Law on Investment.

6. For the outward investment project of the wholly state-owned enterprise or the subsidiary of the wholly state-owned enterprise, within 05 working days from the day on which the National Assembly’s written approval for investment guidelines is received, the Prime Minister shall make a decision on investment as prescribed in Article 29 of the Law on management and utilization of state capital invested in the enterprise’s manufacturing and business activities.

7. Within 03 working days from the day on which the National Assembly’s written approval for investment guidelines and Prime Minister’s investment decision prescribed in Clause 6 of this Article are received, the Ministry of Planning and Investment shall issue the outward investment registration certificate to the investor and each of its copy to the Ministry of Industry and Trade, Ministry of Finance, the Ministry of Foreign Affairs, the Ministry of Labor, War Invalids and Social Affairs, the State Bank of Vietnam and the People’s Committee of the province where the headquarters of the investor is located.

8. In case the National Assembly rejects the outward investment guidelines, within 03 working days from the day on which the written rejection is received, the Ministry of Planning and Investment shall provide explanation for the rejection of issuance of the outward investment registration certificate in writing.

Article 14. Shortening the time limit for assessment and issuance of the outward investment registration certificate if the petroleum project whose outward investment guidelines is decided by the Prime Minister

In case of at the request of the host country or according to regulations of the bidding document or in other similar cases where the investor is requested to participate in and execute the project before the time the outward investment registration certificate is issued according to the procedures prescribed in Article 11 of this Decree, the investor shall make a request and the outward investment registration certificate shall be assessed and issued as follows:

1. The investor shall submit the petroleum project dossier prescribed in Clause 1, Article 55 of the Law on Investment and this Decree to the Ministry of Planning and Investment and a written notice specifying the reasons for shortening the time limit for assessment and issuance of the outward investment registration certificate.

2. The Ministry of Planning and Investment shall inspect the validity of applications. In case the application is invalid or has the information that needs to be clarified, the Ministry of Planning and Investment shall issue a written notice to the investor within 02 working days from the day on which the application is received.

3. Within 03 working days from the day on which the sufficient dossier prescribed in Clause 1 of this Article is received, the Ministry of Planning and Investment shall submit requests for suggestions from the Ministry of Industry and Trade, the Ministry of Finance, the Ministry of Labor, Invalids and Social Affairs, the State Bank of Vietnam and the People’s Committee of the province where the headquarters of the investor is located.

4. Within 03 working days from the day on which the investment project dossier is received, the enquired authorities shall send written comments about the issues within their competence to the Ministry of Planning and Investment. After the time limit, if no written comments are sent, it will be considered that the enquired authorities approve the investment project dossier.

5. Within 15 days from the day on which sufficient dossier prescribed in Clause 1 of this Article, the Ministry of Planning and Investment shall assess, prepare an assessment report and submit it to the Prime Minister according to Clause 4, Article 55 of the Law on Investment.

6. Within 05 working days from the assessment report submitted by the Ministry of Planning and Investment is received, the Prime Minister shall issue the outward investment guideline decision.

7. For the outward investment project of the wholly state-owned enterprise, within 03 working days from the day on which the Prime Minister’s written approval for investment guidelines is received, the representative agency of state capital owner shall make a decision on investment as prescribed in Article 29 of the Law on management and utilization of state capital invested in the enterprise’s manufacturing and business activities or such enterprise’s Charter. For the subsidiary of the wholly state-owned enterprise (parent company), the decision on outward investment shall be made by the parent company as prescribed in the Charter, Financial Regulation and relevant laws.

8. Within 02 working days from the day on which decisions specified in Clauses 6 and 7 of this Article are received, the Ministry of Planning and Investment shall issue the outward investment registration certificate to the investor and each of its copy to the Ministry of Industry and Trade, the Ministry of Finance, the Ministry of Foreign Affairs, the Ministry of Labor, War Invalids and Social Affairs, the State Bank of Vietnam and the People’s Committee of the province where the headquarters of the investor is located.

9. In case the Prime Minister rejects the outward investment guidelines, within 03 working days from the day on which the written rejection is received, the Ministry of Planning and Investment shall provide explanation for the rejection of issuance of the outward investment registration in writing.

Article 15. Adjustment of the outward investment registration certificate

1. If wishing to adjust the outward investment project relating to the investor executing the project, place of investment, objectives, scope, investment capital, investment capital source, investment progress, investment incentive, use of profits for execution of the outward investment project, the investor shall submit an application for adjustment of the outward investment registration certificate to the Ministry of Planning and Investment.

2. The application for adjustment of the outward investment registration certificate in the case specified in Clause 2, Article 61 of the Law on Investment and this Decree.

3. Other equivalent documents certifying the investor's legal status specified in Point b, Clause 1, Article 61 of the Law on Investment include one of the following papers: investment license or investment certificate or investment registration certificate if the investor is the foreign-invested enterprise in Vietnam or business registration certificate or establishment decision.

4. The Ministry of Planning and Investment shall adjust the outward investment registration certificate within 15 days from the day on which a valid application prescribed in Clause 1 of this Article is received.

5. For the project subject to issuance of an outward investment guideline decision, upon adjustments to the contents specified in this Article, the Ministry of Planning and Investment shall follow the procedures for issuance of the outward investment guideline decision before adjusting the outward investment registration certificate as prescribed in the Law on Investment and this Decree.

6. If the investor's request for adjustments to outward investment registration certificate makes issuance of a decision on outward investment guidelines mandatory in accordance with regulations of the Law on Investment, the Ministry of Planning and Investment shall follow the procedures for issuance of the outward investment guideline decision before adjusting the outward investment registration certificate in accordance with regulations of the Law on Investment and this Decree.

7. The Ministry of Planning and Investment shall send copies of the outward investment registration certificate to the Ministry of Industry and Trade, Ministry of Finance, the Ministry of Foreign Affairs, the Ministry of Labor, War Invalids and Social Affairs, the State Bank of Vietnam and the People’s Committee of the province where the headquarters of the investor is located.

Article 16. Shortening the time limit for assessment, inspection and adjustment of the outward investment registration certificate

In case of at the request of the host country or according to regulations of the petroleum agreement or according to the resolutions of the investors participating in a petroleum agreement, the investor shall perform tasks before the time the outward investment registration certificate is adjusted according to the procedures prescribed in Article 15 of this Decree, the investor shall make a request and the outward investment registration certificate shall be assessed, inspected and adjusted as follows:

1. For the projects whose outward investment guidelines is decided by the National Assembly and Prime Minister or in case of investor’s request for adjustment of the outward investment certificate which makes the issuance of a decision on outward investment guidelines mandatory by the National Assembly and Prime Minister

a) The investor shall submit an application for adjustment of the outward investment registration certificate that is prescribed in Clause 2, Article 61 of the Law on Investment and this Decree to the Ministry of Planning and Investment to the Ministry of Planning and Investment and a written notice specifying the reasons for shortening the time limit for assessment and adjustment of the outward investment registration certificate;

b) The Ministry of Planning and Investment shall follow the procedures for issuance of the investment guideline decision as prescribed in Articles 13 and 14 of this Decree;

c) Within 02 working days since receipt of the National Assembly or Prime Minister’s written approval and competent authority’s investment project adjustment decision according to Article 29 of the Law on management and utilization of state capital invested in the enterprise’s manufacturing and business activities or enterprise’s Charter and Financial Regulations, the Ministry of Planning and Investment shall issue the decision on adjustment of the outward investment registration certificate to the investor and each of its copy to the Ministry of Industry and Trade, Ministry of Finance, the Ministry of Foreign Affairs, the Ministry of Labor, War Invalids and Social Affairs, the State Bank of Vietnam and the People’s Committee of the province where the headquarters of the investor is located;

d) In case the National Assembly or the Prime Minister rejects the adjustment of the outward investment project, within 03 working days from the day on which the written rejection is received, the Ministry of Planning and Investment shall provide explanation for the rejection of adjustment of the outward investment registration certificate in writing.

2. For the project that is exempt from the outward investment guideline decision

a) The investor shall submit the application prescribed in Point a, Clause 1 of this Article to the Ministry of Planning and Investment;

b) Within 05 working days from the day on which the valid application is received, the Ministry of Planning and Investment shall consider adjusting the outward investment registration certificate to the investor and each of its copy to the Ministry of Industry and Trade, the Ministry of Finance, the Ministry of Foreign Affairs, the Ministry of Labor, War Invalids and Social Affairs, the State Bank of Vietnam and the People’s committee of the province where the headquarters of the investor is located.

Chapter III

EXECUTION OF PETROLEUM PROJECT

Article 17. Establishment of a new juridical person

1. To prepare for investment or execute the petroleum project abroad, the investor may establish or participate in establishing an operating company in Vietnam, the host country or the third country in accordance with regulations of relevant laws, petroleum agreement and generally accepted international petroleum industry practices.

2. In case the investor decides to establish an operating company that will represent the investor to participate in execute the petroleum project abroad, the operating company shall be named in the outward investment registration certificate. The operating company may use the outward investment registration certificate to serve the activities relating to execution of the petroleum project.

3. The investor shall execute the project in conformity with the outward investment registration certificate and regulations of relevant laws.

Article 18. Transfer of petroleum project

1. The investor shall transfer part or entire petroleum project in conformity with regulations of the petroleum agreement, laws of the host country, this Decree and generally accepted international petroleum industry practices. The authority that has the competence to transfer is the authority that has the competence to issue a petroleum project decision.

2. In case of transfer of entire petroleum project, the investor shall terminate or finalize the outward investment project in accordance with regulations of the Law on Investment and this Decree. Before terminating the project and transferring entire outward investment capital to a foreign investor, the investor shall inform the State Bank of Vietnam.

3. In case the transfer of a petroleum project generates profits, the investor shall fulfill tax liability in accordance with regulations of relevant laws.

Article 19. Contribution of capital to execution of petroleum project

1. The investor shall contribute investment capital in the following forms:

a) Contribute capital in response to the project operator;

b) Contribute capital to the operating joint venture company, operating company;

c) Purchase shares of the company owning part or entire petroleum project;

d) Contribute capital by granting the operating loans;

dd) Other forms prescribed by laws of the host country or decided by the Prime Minister.

2. The investor shall contribute the capital to the overseas petroleum project within the limits in the outward investment registration certificate (including any changes). In case the investor earns incomes from the project, the investor shall declare and pay income tax (if any) on such incomes accordingly.

Article 20. Transfer of investment capital abroad

1. The investor may transfer investment capital abroad to make investment after satisfying the following conditions:

a) The investor shall be issued with the outward investment registration certificate, except for the case prescribed in Clauses 1 and 4, Article 5 of this Decree;

b) The petroleum project has been approved by a competent authority of the host country in accordance with regulations of laws of the host country; If the host country’s law does not cover investment licensing or approval, the investor shall provide documents proving his/her right to invest in that country;

c) The investor must have a capital account as prescribed in Article 63 of the Law on Investment;

d) The investor shall bear responsibility for transferring investment capital abroad for right purposes, on schedule and comply with regulations of the petroleum agreement, share purchase agreement, etc.;

dd) The investor shall transfer the outward investment capital through the outward investment capital account after the State Bank of Vietnam certifies the registration of outward investment-related forex transactions as prescribed in Article 21 of this Decree.

2. The State Bank of Vietnam shall provide guidelines for foreign exchange management upon transfer of foreign currency abroad.

Article 21. Applications and procedures for registration of outward investment-related forex transactions

1. An application for registration of forex transactions includes:

a) An application form for registration of forex transactions made using the form provided by the State Bank of Vietnam;

b) A copy from the master register or certified true copy or copy presented together with the original for comparison of the investment license or the outward investment certificate or the outward investment registration certificate. In case the investor submits the copy enclosed with the original for comparison, the checker (person who compares copies and originals) shall confirm the accuracy of the copy versus original.

c) A copy in foreign language and Vietnamese translation (with the investor's confirmation of the accuracy of such copy and translation) of the written approval or the investment license issued by the host country’s competent authority or the document proving the right to invest in conformity with the host country's laws.

d) An original of the certificate of the investor's investment capital account issued by the licensed credit institution, including account number and type of foreign currency;

dd) An original of the certificate issued by the licensed credit institution to certify the amount transferred abroad by the investor before the investor obtains the outward investment registration certificate for the purpose of covering expenses for the establishment of such investor’s outward investment project in compliance with laws in the cases where the investment capital is transferred abroad before the outward investment registration certificate is issued;

e) A written representation of the transfer of investment capital in VND to foreign countries in cases where the investment capital in VND is transferred abroad.

2. Procedures for registration of forex transactions with the State Bank of Vietnam

a) The investor shall submit 01 application for registration of forex transactions prescribed in Clause 1 of this Article, directly or by post, to the State Bank of Vietnam;

b) In case the application is insufficient, within 05 working days from the day on which the application is received, the State Bank of Vietnam shall submit a written request for completion of the application to the investor;

c) Within 10 working days from the day on which a suffcient application is received, the State Bank of Vietnam shall give a confirmation or refuse to give a confirmation of the investor's registration of forex transactions. In case of rejection, the State Bank of Vietnam shall provide explanation in writing.

Article 22. Registration of changes to forex transactions related to petroleum industry

1. The investor shall register changes to foreign exchange transactions with the State Bank of Vietnam when any of the following changes related to the contents of Certificate of the registration of outward investment-related forex transactions issued by the State Bank of Vietnam occurs:

a) Change of the investor executing the outward investment project; change of the investor’s name;

b) Change of the type of foreign currency of the investment capital account or change of the licensed credit institution where the investment capital account is opened;

c) Changes related to the increase or reduction of investor’s investment capital in cash (except for the cases where the profits or revenues are used to invest in a project in a foreign country);

d) Changes to the progress of transfer of investment capital in cash to foreign country in the cases where the amount transferred abroad during the period is more than that of which the registration is confirmed by the State Bank of Vietnam.

2. Applications and procedures for registration of changes to outward investment-related forex transactions

a) The registration application includes:

- An application form for registration of forex transactions made using the form provided by the State Bank of Vietnam.

- An original of the certificate granted by the licensed credit institution with respect to the balance, the amount transferred abroad and that transferred to Vietnam on the investor's investment capital account by the time the change occurs.

- A copy from the master register or certified true copy or copy presented together with the original for comparison of the adjusted outward investment registration certificate. In case the investor submits the copy enclosed with the original for comparison, the checker (person who compares copies and originals) shall confirm the accuracy of the copy versus original.

b) Within 30 working days from the day on which the investor has its outward investment registration certificate adjusted by the Ministry of Planning and Investment and before the investor makes the changes mentioned in Points b, c and d, Clause 1 of this Article, the investor must register changes to forex transactions with the State Bank of Vietnam according to the following procedures:

- The investor shall submit 01 application for registration of changes to forex transactions prescribed in Point a of this Clause, directly or by post, to the State Bank of Vietnam.

- In case the application is insufficient, within 05 working days from the day on which the application is received, the State Bank of Vietnam shall submit a written request for completion of the application to the investor;.

- Within 10 working days from the day on which a sufficient application is received, the State Bank of Vietnam shall give a confirmation or refuse to give a confirmation of the investor's registration of changes to forex transactions. In case of rejection, the State Bank of Vietnam shall provide explanation in writing.

3. Within 30 working days from the day on which the change to the name of the outward investment project or to the account number occurs, except for the case set forth in Point b of this Article, the investor shall issue a written notice to the State Bank of Vietnam and licensed credit institution where the investment capital account is opened, enclosed with a copy of the adjusted outward investment registration certificate (if any).

Article 23. Attracting investment in petroleum project and guaranteeing loans for project execution

1. The Vietnamese investor may authorize an operating company to raise capital from foreign or domestic financial institutions or credit institutions to serve execution of the investor’s corresponding tasks in the project.

2. If the project has an operating company and collateral for the loan is required by the lending organization, the investor may follow legal procedures in order for the operating company to take such loans.

3. In the cases where the lending organization requires guarantee by the investor, the Vietnamese investor shall give a guarantee of a loan in proportion to the contributed capital amount of investors.

Article 24. Transfer of revenues and profits from outward investment project to Vietnam

1. Transfer of revenues from outward investment project to Vietnam

a) Upon transfer of a revenue to Vietnam, the investor may offset it against the total investment transferred abroad after submitting a report to the Ministry of Finance, the Ministry of Planning and Investment and the State Bank of Vietnam;

b) In case the total outward investment is smaller than the registered value, the investor may, in accordance with regulations of the host country, use the revenues from the project that remains after tax payment to invest in the petroleum project already issued with the outward investment registration certificate or other petroleum projects of the investor that are issued with the outward investment registration certificate.

2. Transfer of profits to Vietnam

a) For the outward petroleum investment project which many partners participate in, the investor shall reach an agreement on the profit sharing mechanism, such as the time of sharing, sharing ratio of profit or dividend yielded annually to protect interests of the investor and the State;

b) Within 06 months from the day on which the annual tax statement or any document of equivalent value is available according to laws of the host country, the investor must transfer entire profit and other incomes derived from outward investment project to Vietnam. If the profits and other incomes are not transferred to Vietnam by the aforementioned deadline, the investor must submit a report to the Ministry of Planning and Investment and the State Bank of Vietnam. The transfer of profits to Vietnam shall not be extended more than twice, each extension shall not exceed 06 months and must be approved in writing by the Ministry of Planning and Investment;

c) The investor may retain its share of profit (in case of joint venture) or after tax profits (in case of no capital contribution by foreign partners) in order to make investment (by directly contributing capital or on-lending the outward investment project if total outward investment is smaller than the registered value) or to invest in other investment projects already issued with the outward investment registration certificate and approved by the representative agency of state capital owner. The investor that is a wholly state-owned enterprise does not have to regulate profits while such profits are yet to be transferred to Vietnam in accordance with regulations of law, but the investor must include an explanation in the financial statement serving the supervision by the representative agency of state capital owner and relevant authorities.

3. In the cases where the revenues, the remaining amount after tax payment and profits prescribed in Point b, Clause 1 and Clause 2 of this Article are yet to be transferred to Vietnam, the investor must issue a written notice to the Ministry of Planning and Investment; the Ministry of Finance; the State Bank of Vietnam and the representative agency of state capital owner before 30 June every year.

Article 25. Settlement of unrecovered project expenses

The investor may record expenses as operating expenses of the investor if they have valid documents. To be specific:

1. For the investor’s own incurred expenses

a) Expenses for purchase of right to participate in the petroleum project (charges for signatures, reserve commission or other similar expenses) that are recorded in the expenses for outward project or not entirely recovered shall be deducted in one of the following forms:

- The investor may gradually deduct the expenses for purchase of right to participate in the petroleum for up to 05 years from the date of payment.

- The investor shall gradually deduct the expenses according to the results of assessment of oilfield value reduction (recoverable reserves and oil prices) at the end of each year. The abovementioned expenses shall be aggregate with the expenses of the investors and refunded in case the oilfield reserve value increases but does not exceed the initial payment for participation in the petroleum project.

b) Administrative expenses shall be deducted as follows:

- The investor may aggregate the entire administrative expenses that are paid but not recorded as expenses of the overseas petroleum project, except for the administrative expenses directly provided for the project because the project operator raises capital on a periodic or annual basis.

- The expenses that are allowed to be aggregated include:

+ Expenses for investment preparation or project establishment (fees for document study; travel expenses; expenses for organization of meetings, negotiation, establishment of juridical person participating in the project at the request of the host country, etc.).

+ Expenses for project management.

- The administrative expenses shall be deducted for up to 05 years from the year in which such expenses are incurred.

2. For the exploration project

a) After the exploration period, if there is no commercial discovery within the contracted area and no decision on extension of the period, the entire expenses for exploration approved by the authority that issues the project investment decision shall be aggregated with the investor’s operating expenses for up to 05 years from the end of the exploration period under the petroleum agreement or the authority that issues the project investment decision permits the completion of the project;

b) If there is commercial discovery which does not yield economic benefits earlier than the Look Forward period and the investor decides to continue making the investment, entire or part of the exploration expenses that were already approved by the authority that issues the investment decision but unrecoverable shall be aggregated with the investor’s operating expenses for up to 05 years from the day on which the petroleum project enters the development stage.

In the cases where the oilfield value increases and the petroleum project yields higher economic benefits or the host country allows the investor to recover entire or part expenses for exploration incurred, the investor shall return the allocated amount that is corresponding to the increase in value or corresponding to the amount permitted by the by the host country.

c) Deductible expenses prescribed in Points a and b of this Clause include:

- Expenses directly related to petroleum exploration.

- The contributions under the petroleum agreement but not treated as recovered expenses.

3. For the development and extraction projects

a) If economic benefits of the project do not meet the expectation in the approved development plan during the Full Cycle period, according to the results of early extraction, oil production reports, expenses for and efficiency of the project, the expenses for exploration or project development that are not recovered shall be deducted for up to 05 years from the year succeeding the year in which the oil production report is available, provided the deducted amount does not exceed the decrease in value of the oilfield. In case of an increase in the oilfield value, the deducted amount shall be reversed, nut the reversed amount must not exceed the amount that has been deducted from the day on which the authority that issues the investment project decision issues the decision on plan for expense allocation;

b) Deductible expenses prescribed in Point a of this Clause include:

- Expenses directly related to the petroleum, exploration, oilfield development and extraction of petroleum

- The contributions under the petroleum agreement but not treated as recovered expenses.

4. In case the exploration expenses are not recovered as prescribed in Clauses 2 and 3 of this Article and covered by the petroleum exploration fund through petroleum exploration in accordance with regulations of law, the investor shall not deduct the amount covered by the petroleum exploration fund.

5. The Ministry of Finance shall provide guidelines for this Article.

Article 26. Accounting

1. The investor may apply the accounting system to the petroleum project under the petroleum agreement, agreement with the project operator and regulations of the host country.

2. The investor’s investment expenses shall be accounted for in accordance with regulations of Vietnam’s Law on Accounting.

Article 27. Taxes and financial obligations in Vietnam

1. The investor shall declare and pay taxes in accordance with regulations of this Article and applicable laws on corporate income tax, personal income tax, value added tax, export and import duty.

2. In case the Vietnamese investor that makes outward investment establishes or invests in a foreign organization to involve in petroleum industry in another country while such organization has been liable to income tax or a type of tax similar to the income tax (including tax dividends), the amount of tax that has been paid by the investor or on behalf of the investor by another organization or partner shall be deducted from tax payable, but the deductible tax shall not exceed the income tax determined according to the tax rate specified by applicable Vietnam’s law on taxes at the time tax is incurred.

The reduction or exemption of income tax on the profits earned from the outward investment project in accordance with regulations of the host country’s law shall be also deductible upon determination of the income tax payable in Vietnam.

3. The investor must fulfill financial obligations in accordance with regulations of Vietnam’s law.

4. The revenues and incomes of the investor in the period under the petroleum agreement shall serve as a basis for the investor to declare and fulfill obligations in Vietnam (if any).

5. For the petroleum agreements under which does not have separate stipulations on revenues and incomes, request the Ministry of Finance to specify them.

Article 28. Benefits provided for employees participating in executing overseas petroleum project

1. In case the employee is assigned by the investor to work regularly at the organizations executing outward investment projects under the agreement between the investor and partners while the salary, bonus, allowances and insurance are aggregated with taxable expenses of the overseas petroleum project before being transferred to the investor in order to make payments, the employee shall be provided with salary, bonus and allowances under the employment contract and agreements signed with the investor (the employer). The investor may pay salaries to employees in foreign currencies and such salaries are still the basis for fulfillment of obligations regarding social insurance, health insurance, unemployment insurance and other compulsory social contributions in accordance with regulations of Vietnam’s law.

2. In case the employee is assigned by the investor to work regularly at the organization executing outward investment projects under the agreement between the investor and partners while the allowances and insurance mandatory to be paid in accordance with regulations of Vietnam’s law but are not aggregated with taxable expenses of the overseas petroleum project, the investor may deduct an amount from his/her/its operating expenses and contributions by the employees to provide social insurance, health insurance, unemployment insurance and other compulsory social contributions for the employee in accordance with regulations of Vietnam's law. The employee’s insurance premiums and benefits shall be equivalent to his/her pay rate before being assigned to work abroad or his/her region-based minimum wage in Vietnam in case the employee has not his/her salary graded to make previous social contributions. The investor should reach an agreement with the partner so that the partner, on behalf of the employee, makes compulsory social contributions in accordance with regulations of the home country or transfer such contributions to the investor to be made in Vietnam.

3. Social insurance, health insurance, unemployment insurance and other compulsory social contributions in accordance with regulations of Vietnam’s law applied to the employees assigned by the investor to work regularly at the organization executing outward investment project are the same as those applied to people holding similar positions in Vietnam.

Article 29. Hiring contractors providing services and purchasing

The investor may select contractor providing services and purchase equipment and facilities for the petroleum project in accordance with regulations of laws of Vietnam and host country.

Article 30. Finalization of outward investment project

1. After the completion of the investment project, the investor must finalize the investment project under the petroleum agreement and in accordance with regulations of the host country’s laws.

2. Within 06 months from the day on which the annual tax statement or any document of equivalent value is available according to laws of the host country, the investor must transfer entire remaining receipts from the finalization to Vietnam.

3. In case extension is needed, at least 60 days before the expiry date, the investor must submit a written request specifying reasons for extension to the Ministry of Planning and Investment. Within 15 days since receipt of the written request, the Ministry of Planning and Investment shall issue a written response regarding the extension to the investor. Extension shall be granted only once and not in excess of 06 months.

4. Within 60 days since completion of the finalization of the investment project and transfer of entire remaining receipts (if any), the investor shall apply for termination of the outward investment project as prescribed in Article 31 of this Decree.

Article 31. Termination of outward investment project

1. The investor shall apply for the termination of an outward investment project in the cases prescribed in Clause 1, Article 62 of the Law on Investment.

2. Expiration of the project duration prescribed in Point b, Clause 1, Article 62 of the Law on Investment is the expiration of the project duration stated in the petroleum agreement and in accordance with regulations of the host country's law by which the investor is not granted extension.

3. The investor shall submit 01 application for termination of the outward investment registration certificate, including:

a) A written request for termination of the outward investment registration certificate made using the form provided by the Ministry of Planning and Investment;

b) An original of the outward investment registration certificate or adjusted outward investment registration certificate (if any);

c) An original or certified true copy of the decision on termination of the outward investment project within competence prescribed by the Law on Investment and this Decree;

d) A certified true copy of the document proving the investor has completed the finalization of the project as prescribed in Article 30 of this Decree.

4. The investor shall be responsible to law for accuracy and truthfulness of the application for termination of the outward investment registration certificate.

5. The Ministry of Planning and Investment shall inspect the validity of applications. In case the application is invalid or has the information that needs to be clarified, the Ministry of Planning and Investment shall give a written response to the investor within 05 working days from the day on which the application is received.

6. Within 15 working days from the day on which a valid application is received, the Ministry of Planning and Investment shall issue a decision on termination and revocation of the outward investment registration certificate to the investor and each of its copy to the Ministry of Industry and Trade, the Ministry of Finance, the Ministry of Foreign Affairs, the Ministry of Labor, War Invalids and Social Affairs, the State Bank of Vietnam and the People’s committee of the province where the headquarter of the investor is located.

7. In case of termination of the outward investment project according to Point d, Clause 1, Article 62 of the Law on Investment, the investor must issue a written notice to the State Bank of Vietnam before the project is terminated and entire foreign investment capital is transferred to the foreign investor.

8. In case of termination of the outward investment project according to Points d and e, Clause 1, Article 62 of the Law on Investment without request for termination of the outward investment registration certificate made by the investor, the Ministry of Planning and Investment shall issue the decision on termination of the outward investment registration certificate to the investor and relevant regulatory authorities.

The investor that wishes to continue execution of an outward investment project shall apply for issuance of the outward investment certificate as prescribed in the Law on Investment and this Decree.

9. In case of termination of the outward investment project according to Point g, Clause 1, Article 62 of the Law on Investment, the investor shall finalize the project and apply for termination of the outward investment registration certificate.

Chapter IV

STATE MANAGEMENT OF OUTWARD INVESTMENT IN PETROLEUM INDUSTRY

Article 32. Power and responsibility of regulatory authorities

Ministries, ministerial agencies, Governmental agencies, People’s Committees of provinces and overseas Vietnamese diplomatic missions shall perform state management and inspect outward investment in petroleum industry in accordance with regulations of the Law on Investment and Chapter V of the Government’s Decree No. 83/2015/ND-CP dated September 25, 2015 on outward investment.

Article 33. Outward investment reporting

1. Reporting by regulatory authorities is specified in Clauses 1 and 2, Article 72 of the Law on Investment 2014.

2. Reporting by the investor is specified in Clause 3, Article 72 of the Law on Investment and Article 20 of the Government’s Decree No. 83/2015/ND-CP dated September 25, 2015 on outward investment.

Chapter V

IMPLEMENTATION CLAUSE

Article 34. Effect

1. This Decree comes into force from January 01, 2018 and replaces the Government’s Decree No. 121/2007/ND-CP dated July 25, 2007 on outward investment in petroleum industry and Decree No. 17/2009/ND-CP dated February 16, 2009 on amendments to some articles of the Government's Decree No. 121/2007/ND-CP dated July 25, 2007.

2. Transition clause

If the issued investment license and outward investment certificate specify duration, when the investment license or outward investment certificate expires and the investor still wishes to make investment (without any changes to contents of the investment project), the investor shall request the Ministry of Planning and Investment to consider reissuing the outward investment registration certificate.

Article 35. Responsibility for implementation

Ministers, heads of ministerial agencies, heads of Governmental agencies, Presidents of People’s Committees of provinces are responsible for the implementation of this Decree./.

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