Project merger consolidates two or more investment projects into one, and Decree 96/2026/ND-CP contains a provision that makes it far more attractive than sponsors generally assume: merged projects do not lose the different incentive entitlements they each carried.
The incentive rule that makes project merger work
Under Decree 96/2026, an investment project formed on the basis of merging projects continues to apply investment incentives according to the incentive conditions of each project before the merger, provided those conditions are still satisfied. Where the merged projects met different incentive conditions, the investor enjoys the incentives under each of those different conditions for the remaining incentive period.
That is a genuinely favourable rule. A sponsor merging a project in an incentivised location with one in a standard location does not have to accept the lower treatment across the combined asset; each stream keeps its own entitlement for its own remaining term. The obligation it creates is accounting: the investor must be able to attribute income and activity to each former project to support the differing treatment, which is a systems question as much as a tax one.
When a project merger makes sense
Four cases recur. Phased developments where separate phase certificates have outlived their usefulness and create duplicated reporting. Adjacent sites acquired at different times that now operate as a single facility. Post-acquisition integration, where the buyer holds its own project and the target’s, as our M&A consulting guide discusses. And restructuring ahead of a sale or listing, where a single clean project presents far better than a portfolio of overlapping ones.
What must align before a project merger
Three positions have to be reconciled. Land – the parcels must be capable of consolidation, or of coexisting under one project with separate land instruments, and our land use rights guide covers the analysis. Objectives and scale – the surviving project must accommodate everything the merged projects were licensed to do, or the difference must be dropped deliberately rather than by accident.
And implementation schedules – merging a completed project with one still in construction creates a single schedule that must be realistic for both, or the security arrangements in our project security deposit guide come under pressure.
Project merger sequence and consents
The merger runs through certificate adjustment or reissue, engaging investment policy approval where the original projects were subject to it, and coordinating with any change at company level under our merger and demerger guide. Where it follows an acquisition, the M&A approval application and the merger should be sequenced rather than filed together.
Sponsors should also decide, before filing, how they will evidence the differing incentive streams afterwards. Retrofitting that attribution once the projects are legally one is considerably harder than designing the ledger before completion.
Project merger FAQs
Do incentives combine or reset?
Neither. Each former project’s entitlement continues on its own conditions for its own remaining period, which is why attribution matters.
Can projects in different provinces merge?
Practically this is difficult because land and licensing sit with different authorities. Sponsors in that position usually restructure at company level instead, as our project restructuring guide describes.
What if one project is in breach?
Regularise before merging. A merger does not cure a defect; it spreads it across the surviving project. Texts are published via the Ministry of Finance.
Project merger attribution: building the ledger
Because each former project keeps its own incentive conditions, the surviving entity must be able to show which income and activity belongs to which former project for the remainder of each incentive period. That is an accounting design question, and it should be settled before the merger completes.
Three project merger elements make it workable. Cost centres or segments in the general ledger mapped to each former project, established from the merger date rather than reconstructed. An allocation policy for shared costs and revenue, documented and applied consistently. And an annual memorandum confirming that each former project’s incentive conditions continued to be met that year.
Groups that build this find the differing entitlements easy to defend on inspection. Groups that merge first and think about attribution later frequently end up applying the lowest common treatment across the whole project, which forfeits precisely the benefit the merger rule was designed to preserve.
This article is provided for general information only and does not constitute legal advice for any specific case. Regulations may change – please consult a qualified professional before acting. Should further analysis be required, please contact one of our lawyers below.
