An environmental protection deposit is money a company must ‘freeze’ before a project operates, securing its future environmental rehabilitation duties. Not every FDI project must deposit — but for the mandatory groups, forgetting this sum in the financial model distorts the project’s entire cash flow.
Who must deposit and how the amount is set
- Three project groups must deposit — Article 46 of Environmental Protection Law 72/2020/QH14: environmental protection deposits apply to mineral extraction projects, waste burial projects and prescribed projects importing scrap as production material.
- The amount follows rehabilitation cost — Decree 08/2022/ND-CP (as amended by Decree 05/2025/ND-CP) guides deposit calculation from the project’s total estimated environmental improvement and rehabilitation cost (tightest for mining: deposits by extraction stage against the approved rehabilitation plan).
- Where it is paid and managed — deposits are paid into the Vietnam Environmental Protection Fund or the provincial environmental protection fund by decentralisation, tracked per project and bearing interest under fund management rules.
- Refund follows rehabilitation progress — the company is refunded in proportion to rehabilitation duties completed and certified by competent authorities; unrehabilitated parts stay held — and if the company abandons its duties, the State uses the deposit to hire a rehabilitator instead.
Governing the deposit across the project lifecycle
- Determine at feasibility stage whether the project falls in the three deposit groups, and put the deposit into the working capital plan.
- For extraction and burial projects: build a staged deposit schedule against the approved rehabilitation budget to avoid cash pressure bunching at one point.
- Keep a stage-by-stage rehabilitation certification file to withdraw deposits on schedule — many companies lose money simply by never filing for rehabilitation completion certification.
An environmental protection deposit is not a sunk fee — it is a bond for the company’s own rehabilitation promise, recoverable when duties are done right. FDI projects in scope should govern it as a scheduled asset: paid for the right group, at the right amount, and recovered with each rehabilitation certification instead of sleeping untouched until project closure.
Frequently asked questions
Which projects must pay an environmental protection deposit?
Three groups under Article 46 of the Environmental Protection Law: mineral extraction projects, waste burial projects and prescribed scrap-import-for-production projects.
How much is the deposit?
Calculated from the project’s estimated environmental improvement and rehabilitation cost under Decree 08/2022/ND-CP; mining projects deposit by stage against the approved rehabilitation plan.
When is the deposit refunded?
In proportion to rehabilitation completed and certified by competent authorities; in full once the project completes all its rehabilitation duties.
This article has been quality-reviewed by the FLAW AI Legal Council