Assembling cars in Mercedes-Benz Vietnam Factory Nearly 30 months after submitting the application, the license extension has still not been granted
Mercedes-Benz Automobile Assembly Factory project at Quang Trung Street (Ward 8, Go Vap District, Ho Chi Minh City) is a joint venture project between Mercedes-Benz Group AG (MBG AG) and Transport Engineering Corporation. Saigon Transportation (Samco). In April 4, Mercedes-Benz Vietnam Company Limited (MBV Company for short) was licensed to operate in Vietnam, with the project ending date being April 1995, 14.
In September 9, MBV submitted a document requesting to extend the project's operating period for another 2021 years, i.e. until April 5. Although the Ho Chi Minh City government has approved the policy of extending the project and land lease period, to date, the procedure has not been completed.
The investor has sent many petitions to the Ho Chi Minh City government. On March 5, 3, MBV Company continued to send Document No. 2024/MBV/83/CV to Prime minister Goverment and many ministries and branches, recommending to remove obstacles related to the Project.
Mercedes-Benz Group AG holds 70% of charter capital and Samco holds 30% of charter capital, contributed by the value of land use rights, in the Mercedes-Benz Vietnam Project (MBV). To date, Samco has completed capital contribution equal to the value of land use rights, so from July 14, 7, MBV directly pays annual land rent to Ho Chi Minh City.
In this document, MBV said that the Company has completed the necessary licensing steps and fully met the legal documents. However, the problem in extending the project is that state agencies have not yet clarified whether the project land is subject to rearrangement according to the provisions of Decree No. 167/2017/ND-CP. whether or not to reorganize and handle public assets (Decree 167).
With the project ending on April 14, 4, foreign investor MBG AG set the final deadline for completing the extension to be the first quarter of 2025. If the extension is not completed before this deadline, MBG AG and Samco will be forced to take steps to end the joint venture and close the Mercedes-Benz Factory in Vietnam.
Confusion in determining whether the project must be reorganized
In Document No. 83/MBV/2024/CV sent to the Prime Minister, MBV and the foreign investor - parent company MBG AG - stated that MBV's project is not subject to Decree 167, because MBV is directly managing and using the land lot at 693 - Quang Trung (Go Vap District, Ho Chi Minh City) as an independent land lessee since 2020 and paying land rent directly to the State. Furthermore, MBV is an enterprise with 30% of Samco's capital, so it is not in the group of enterprises subject to the provisions of Clause 1, Article 2, Decree 167.
According to investors, the Ministry of Finance believes that MBV's Project is subject to Decree 167 and must wait for the Decree amending and supplementing Decree 167 to be passed to have a clearer legal basis for extending the Project, leading to delays and affecting the rights of investors.
“MBV respectfully requests the Prime Minister to specifically approve the extension of the MBV Project based on the original spirit of Decree 167 and direct relevant ministries and branches to have an urgent meeting with the participation of MBV. to agree on a solution so that the project extension can be completed in the first quarter of 2024", MBV proposed.
Regarding domestic enterprises, on April 4, 4, Samco issued Document No. 2024/SC-HDTV reporting to the People's Committee of Ho Chi Minh City on extending the project's operating time. In the document, Samco affirmed that, through reviewing the provisions of law, there is enough basis to determine that the land at address No. 16 - Quang Trung (Go Vap district, Ho Chi Minh City) used by MBV is not real. currently reorganized at the present time, according to the provisions of Clause 693, Article 3, Decree 3 because the joint venture and association period has not ended.
At the same time, Samco believes that there is enough basis to consider extending MBV's project operation time because of Decree 167 and Decree 67/2021/ND-CP (amending and supplementing a number of articles of Decree No. 167) does not regulate the extension of joint venture and association activities or the duration of investment project activities of enterprises. On the other hand, MBV proposed to extend the operating period for another 5 years until April 14, 4. In case the extension is approved, the total operating time of the Project is 2030 years, so it is still consistent with current planning laws.
According to Samco, during its operation, MBV always complies and ensures it does not pollute the environment and does not consume resources. During the period 2016 - 2020, MBV invested more than 25 million USD in improving vehicle production and assembly processes. It is expected that in the period 2021 - 2030, MBV will invest an additional 30 million USD in vehicle assembly and production technologies. The company is creating jobs for 550 employees.
Samco believes that, with the conditions stated above, MBV's project meets the conditions for extending the operating period in Article 44, Investment Law and Article 27, Decree No. 31/2021/ND-CP dated March 26, 3 of the Government detailing and guiding the implementation of a number of articles of the Investment Law, should be considered for extending the operating period.
Therefore, Samco proposed that the People's Committee of Ho Chi Minh City approve MBV's policy of adjusting the project's operating time for another 5 years (until April 14, 4).
