A garment FDI project in Hai Duong has operated for exactly five years: stable tax contributions, but only 60 percent of its land in use and 20 percent of registered capital still unpaid. When applying to extend its term, it is asked to join a project effectiveness evaluation. This is not a licence re-examination; the criteria are published and the company can score itself first.
Applicable Legal Framework
Effectiveness evaluation sits inside the monitoring and evaluation regime of the Investment Law 143/2025/QH15 and Decree 96/2026/ND-CP. Registration agencies evaluate operating projects periodically or by theme, especially when considering term extension, incentive adjustments, or land- and capital-intensive projects. Criteria fall into five groups: implemented capital and disbursement progress, land-use efficiency, budget contributions and exports, labour and technology transfer, and environmental and sectoral compliance.
Evaluation is neither audit nor inspection: its results feed management decisions (extension, adjustment, urging), not violation findings. Only data showing signs of violation is referred to competent authorities.
Detailed Answers to Practical Questions
What criteria are applied after five years?
Five groups: (1) implemented versus registered capital and disbursement pace; (2) land actually used versus land allocated or leased, including any idle area; (3) revenue, budget payments and exports against licensing commitments and incentives enjoyed; (4) headcount, average income, training and technology transfer; (5) environmental, fire-safety and construction compliance. Each criterion compares the enterprise’s reported figures with tax, customs and land data held by the State.
Does a poor evaluation mean the licence is revoked?
Not automatically. Weak results usually lead to explanations and a remediation roadmap (complete the capital, put land to use), a review of incentives tied to unmet commitments, or refusal of expansion. IRC revocation or project termination arises only under Clause 1, Article 36 of the Investment Law 143/2025 – for instance, prolonged non-implementation despite repeated urging – not merely because economic efficiency is low.
Can the enterprise evaluate itself first?
Yes, and it should. Build a self-assessment on the same five groups using audited financial statements, tax finalisation returns, ICA statements and current land use. Self-assessment surfaces weak points early (usually idle land and capital shortfalls) so the company can adjust the IRC or prepare explanations before the agency issues its request.
How do results affect term extension?
Directly. On extension, the agency relies on the project’s monitoring and evaluation history: a clean compliance record and clear contributions make approval smooth; unresolved shortcomings can mean remediation first, conditional extension, or refusal of the expansion part. The compliance file accumulated year by year is an asset in extension negotiations.
Action Checklist
- Build a five-group self-assessment from the latest audited figures and tax finalisation.
- Re-measure land actually in use; idle areas need a concrete plan and timeline.
- Reconcile ICA contributions against IRC registered capital; plan top-ups or a capital adjustment if short.
- Compile incentives enjoyed and the commitments attached to them (exports, jobs, technology).
- Keep minutes and conclusions of earlier monitoring rounds to prove past issues were fixed.
Frequently Asked Questions
Does every FDI project get evaluated at the five-year mark?
No. Agencies select projects by monitoring plan, by risk signs (delays, heavy land use), or when the enterprise seeks extension, expansion or incentive changes.
What if we disagree with the evaluation result?
Explain in writing with evidence within the period stated in the result notice; if a subsequent administrative decision is disputed, complain under the Law on Complaints 02/2011/QH13 or bring an administrative lawsuit.
Can unaudited figures be used in the evaluation?
Agencies prioritise audited figures and State-held data. Internal unaudited numbers belong in your self-assessment, with sources stated, to avoid any finding of inaccurate reporting.
This article has been quality-reviewed by the FLAW AI Legal Council