Project termination is the outcome no sponsor plans for and many encounter. Decree 96/2026/ND-CP details the Law on Investment provisions governing when an investment project ends – voluntarily or by decision of the authority – and what happens to the land, the security and the assets when it does.
How a project ends
Three routes. The investor decides to terminate, notifying the authority and surrendering the certificate. The term expires without extension, which is why the discipline in our project extension guide matters. Or the authority terminates the project – typically where implementation has failed against the registered schedule, where the investor no longer meets conditions attaching to the project, or where the project operates outside what was licensed.
The third is the one sponsors underestimate. A project that quietly falls behind its recorded schedule without an amendment is accumulating grounds for termination, and the certificate is the benchmark regardless of how reasonable the commercial explanation may be.
Project termination: land recovery is the real consequence
Termination of the project engages recovery of the land. For most projects the land is the principal asset, and its loss dwarfs any other consequence – the buildings remain, but the right to use the site does not, and the compensation position on recovery is materially worse than a negotiated exit would have produced.
This is why sponsors facing difficulty should restructure rather than drift, using the tools in our project restructuring guide, or exit through the routes in our project transfer guide, while the project is still current and therefore still saleable.
The security deposit on project termination
The implementation security is designed for exactly this scenario. Where the project fails to proceed as committed, the deposit or guarantee is exposed, and Decree 96/2026 addresses the conditions for returning, adjusting and terminating that security – covered in our project security deposit guide.
Sponsors should therefore treat the security not as a sunk cost but as a live exposure that shrinks as milestones are met and amendments are filed on time.
Managing an orderly exit before project termination
Four steps preserve value where a project must end. Assess whether transfer is still possible – a current certificate and clean land make the project saleable, and a sale returns far more than termination. Regularise the certificate first, using our IRC adjustment guide, since no buyer takes on an outdated position.
Address employees, suppliers and any purchasers under contract, whose claims survive the project. And coordinate the corporate dissolution with the project termination, because winding up the company while the project remains recorded produces an orphan certificate that complicates everything afterwards.
Project termination FAQs
Can a terminated project be restored?
The position after termination is materially worse than before it. Sponsors should engage while the project is still current, not after the decision issues.
What happens to assets on the land?
Buildings and equipment remain the investor’s property in principle, but realising value from assets on land the investor no longer has the right to use is difficult and heavily discounted.
Does termination affect other group projects?
It affects the group’s record with the authority, which is a real factor in later applications – one more reason an orderly exit is worth the effort. Texts are published via the Ministry of Finance.
Early warning signs worth acting on
Projects rarely fail suddenly. Four signals typically appear well before any decision issues, and each is a prompt to act rather than to wait. Construction falling materially behind the registered schedule without an amendment filed. Capital disbursed significantly below the registered commitment at the point the schedule required it.
Correspondence from the authority querying progress, which is an invitation to explain rather than a formality. And a land handover or clearance issue that stalls the site without a documented resolution path.
Sponsors who respond to these by amending the certificate, restructuring the project or beginning a sale process retain options. Those who wait for the position to improve typically find that project termination arrives with the options already gone – and that the same steps, taken twelve months earlier, would have preserved most of the value.
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.
