Investment Project Deposit Guarantee in Vietnam: Amount, Refund, and Disputes
When preparing an investment project dossier in Vietnam, many investors — especially foreign ones — are surprised to be asked to place a sum of money as a deposit before the project is approved for implementation. Some mistake it for a tax, a fee, or an informal cost. In fact, it is a formal legal instrument called the investment project implementation deposit: the State requires the investor to lodge funds guaranteeing that the project will be carried out on the committed schedule, rather than "holding land" indefinitely.
This article covers the deposit obligation under Vietnam's Investment Law 2025 (No. 143/2025/QH15, effective 01/3/2026) and guiding Decree 96/2026/ND-CP: who must deposit, how much, when, refund conditions, and how disputes are resolved.
Table of contents
- 1. What is the investment project deposit?
- 2. Which projects must deposit, which are exempt?
- 3. Deposit amount: how is it calculated?
- 4. Timing and form of the deposit
- 5. Refund: conditions and procedure
- 6. When is the deposit forfeited to the state budget?
- 7. Extension, adjustment, termination: how is the deposit treated?
- 8. Disputes: complaints and litigation
- 9. Four common investor mistakes
- 10. FAQs
- 11. When to work with counsel
- References
- Language versions
1. What is the investment project deposit?
Article 30(1) of the Investment Law 2025 provides: investors must place a deposit or obtain a credit institution's guarantee of the deposit obligation to secure implementation of the investment project. In practical terms, this is money lodged with the competent authority (or a bank guaranteeing in its place) as a financial commitment that the project will be implemented on its registered objectives, scale, and schedule.
The policy purpose is clear: to prevent investors from obtaining project approvals, sitting on land, and delaying indefinitely or flipping the project for a spread without genuine implementation. The deposit creates a real opportunity cost so that investors only register projects they can actually deliver.
It should not be confused with:
- Taxes or fees — the deposit is refunded when commitments are met; it is not budget revenue.
- Land use fees or land rental — separate financial obligations relating to land.
- Capital contribution — the deposit is independent of and additional to committed investment capital.
- Bid security — the project deposit arises after project approval, not during tendering.
2. Which projects must deposit, which are exempt?
The general rule: every project subject to investment policy approval or an Investment Registration Certificate (IRC) must place the deposit, except the exemptions in Article 30(1) of the Investment Law 2025:
- Projects where the State allocates/leases land or approves land-use conversion through land-use-right auctions or investor-selection bidding — the winning bid payment itself is deemed sufficient financial security.
- Investors acquiring a project for which the deposit was already placed or capital contribution/mobilization completed on schedule — no double deposit for the same secured obligation.
Key point for foreign investors: the exemption attaches to the project, not the investor. A group that deposited for Project A cannot offset it against Project B — each project carries its own deposit obligation.
3. Deposit amount: how is it calculated?
The Investment Law 2025 delegates detailed rates to the Government. The long-applied framework under Decree 31/2021/ND-CP (guiding the 2020 Investment Law) — useful for estimation, but the current table in Decree 96/2026/ND-CP must be checked at filing time:
| Investment capital | Deposit rate (Decree 31/2021 framework) |
|---|---|
| Up to VND 300 billion | 3% of total investment capital |
| VND 300–1,000 billion | 2% of total investment capital |
| Above VND 1,000 billion | 1% of total investment capital |
Two technical notes:
- The base is the total investment capital stated in the project dossier, including both equity and mobilized capital. Understating capital to reduce the deposit caps the recognized project scale — and a large gap between registered and actual capital may be treated as misrepresentation.
- The deposit is reduced against disbursed capital on schedule: investors who contribute and disburse on time earn corresponding reductions. Disbursement evidence should be prepared alongside the deposit dossier.
4. Timing and form of the deposit
The obligation arises before the project is approved for implementation — it is effectively a condition for the authority to consider investment policy approval or issue the IRC. In practice, complete the deposit (or secure the bank guarantee) while finalizing the dossier; late deposits delay processing.
Two permitted forms:
- Cash deposit — paid into the designated deposit account per the receiving authority's guidance.
- Credit institution guarantee of the deposit obligation — the bank stands behind the obligation; the investor avoids tying up cash but pays guarantee fees and must meet the bank's credit criteria. For FDI projects, guarantees from international banks with Vietnamese branches are commonly accepted — confirm eligible institutions with the receiving authority in advance.
Practical tip: for large projects, a bank guarantee usually optimizes cash flow, but the bank's credit review takes time — start it in parallel with dossier preparation, not when the file is about to be submitted.
5. Refund: conditions and procedure
The deposit is refunded once the secured obligation is fulfilled:
- Capital contribution and mobilization completed on the committed schedule, confirmed by the competent authority;
- Project completed and put into operation per registered objectives;
- Project terminated but the investor has fulfilled all financial, labor, and other obligations — refunded after deducting outstanding debts (if any).
A refund application typically includes: the written request, a project implementation report, evidence of on-schedule contribution/disbursement (audit reports, statements), and the managing authority's confirmation. Processing time follows Decree 96/2026/ND-CP and local practice — investors should proactively follow up rather than wait passively.
6. When is the deposit forfeited to the state budget?
Forfeiture applies where:
- The investor fails to implement the project or misses the committed schedule without an approved legitimate reason (e.g., no lawful extension granted);
- The project is terminated due to the investor's breach, after deducting financial obligations;
- The investor committed fraud in the deposit dossier or during implementation.
The key to protecting the deposit: document every objective difficulty (force majeure, policy changes, site-clearance obstacles beyond the investor's fault) in writing, report promptly to the managing authority, and complete extension or adjustment procedures properly. A delayed project with a full explanatory file and an approved extension keeps its deposit; silence and missed deadlines are the fastest route to losing it.
7. Extension, adjustment, termination: how is the deposit treated?
- Timeline extension (up to 24 months under the Investment Law 2025): a lawful extension does not forfeit the deposit, but the obligation may be adjusted to the new schedule, with procedures completed before the old deadline expires.
- Project adjustment (scale up/down, objective changes): the deposit is recalculated on the new total capital — top up when increasing, partial refund when decreasing.
- Project transfer: the transferee inherits the deposit obligation; where the deposit was fully placed, no new deposit is required (Article 30(1) exemption).
- Termination: settle obligations — refund after deducting debts (lawful termination), or forfeiture (termination due to investor breach).
8. Disputes: complaints and litigation
Disputes with state authorities (refusal to refund, forfeiture decisions, miscalculated amounts): administrative disputes — pursue the administrative complaint procedure, then administrative litigation in the competent court if dissatisfied. Foreign investors should assess investor-state arbitration where an applicable bilateral investment treaty (BIT) permits — complex and costly, suitable only for high-value disputes.
Disputes with the guaranteeing bank (refusal to pay, fee disputes): civil/commercial disputes resolved under the guarantee agreement — typically commercial arbitration or the economic court.
In both cases, documentation wins: the project approval decision, deposit/guarantee instruments, disbursement progress reports, correspondence with authorities, extension decisions (if any). Keep complete files from day one.
9. Four common investor mistakes
- Treating the deposit as a fee and never claiming it back — put deposit refund on the project-closure checklist.
- Understating investment capital to reduce the deposit — saves a little upfront but caps project scale and risks enforcement when the gap is discovered.
- Delaying the deposit and slipping the dossier timeline — waiting for the authority's reminder before approaching banks about guarantees wastes 4–8 weeks.
- Not documenting reasons for delay — verbal reports or silence leave no evidence when forfeiture is on the table.
10. FAQs
Which FDI projects must place an investment project deposit? Under Article 30(1) of the Investment Law 2025 (143/2025/QH15), investors must place a deposit or obtain a bank guarantee covering the deposit obligation to secure project implementation, except: projects where the State allocates/leases land or approves land-use conversion through land-use-right auction or investor-selection bidding; and investors acquiring a project for which the deposit was already placed or capital contribution completed on schedule. Detailed rules are set by the Government in Decree 96/2026/ND-CP.
How is the deposit amount calculated? The Investment Law 2025 delegates the detailed rates to the Government. Under the long-standing framework (Decree 31/2021/ND-CP guiding the 2020 Investment Law), the deposit was 1–3% of total investment capital depending on project scale (up to VND 300 billion: 3%; VND 300 billion–1,000 billion: 2%; above VND 1,000 billion: 1%), with reductions for disbursed capital on schedule. Investors must check the current rate table in Decree 96/2026/ND-CP at filing time, as figures may be adjusted.
When is the project deposit refunded? The deposit is refunded once the investor has completed capital contribution and mobilization on the committed schedule as confirmed by the competent authority; if the project is terminated but the investor has fulfilled all obligations, the deposit is refunded after deducting any outstanding financial obligations. If the investor fails to implement the project or misses the schedule without an approved justification (such as a lawful extension), the deposit may be forfeited to the state budget.
What happens if the investor fails to place the deposit? The deposit is a condition for the project to be approved for implementation; failure to deposit the required amount on time may result in the application being rejected, the project being ordered to suspend, and — where the committed schedule is breached — forfeiture of the deposited amount. Failure to deposit when required may also attract administrative penalties in the investment sector.
How is the deposit treated when the project timeline is extended? An extension of up to 24 months is the investor's right under the Investment Law 2025 where statutory conditions are met; a lawful extension does not forfeit the deposit, but the investor must complete adjustment procedures and may need to adjust the deposit obligation to the new schedule. If the project still fails after the extension period, it may be terminated and the deposit dealt with accordingly.
Where are deposit disputes resolved? Disputes between the investor and state authorities (refusal to refund, forfeiture decisions) follow administrative complaint procedures and administrative litigation in court; foreign investors may consider investor-state dispute mechanisms where an applicable BIT allows. Disputes with the guaranteeing bank over the bank guarantee are civil/commercial disputes resolved per the guarantee agreement (arbitration or court).
11. When to work with counsel
Engage counsel to: (i) estimate the deposit obligation and choose between cash and bank guarantee at the dossier stage; (ii) negotiate guarantee terms with banks; (iii) prepare refund applications and deal with authorities on obstacles; (iv) handle extensions, adjustments, transfers, or terminations affecting the deposit; (v) pursue complaints or litigation over refused refunds or forfeiture decisions. Early advice always costs less than later disputes.
For project-specific advice, contact FLAT Law Firm — hotline 0988424851.
References
- Investment Law No. 143/2025/QH15 (effective 01/3/2026).
- Decree No. 96/2026/ND-CP detailing the Investment Law (effective 31/3/2026).
- Decree No. 31/2021/ND-CP (former deposit rate framework under the 2020 Investment Law — historical reference).