A project security deposit is how Vietnam converts an investor’s promise into something enforceable. Decree 96/2026/ND-CP, effective 31 March 2026, governs the deposit and guarantee regime securing project implementation – including the commitment that accompanies the fast-track route, where an investor using the special investment procedure makes a deposit or submits a guarantee commitment.
What the project security deposit secures
The deposit secures performance of the project as licensed: that construction begins and completes on the registered schedule, that capital is disbursed as declared, and that land allocated to the project is actually used for it. Its function is to price the option an investor holds over allocated land, which is scarce and which the state cannot allocate twice.
That framing explains where it bites hardest. Land-intensive projects – industrial, real estate, infrastructure – carry the heaviest exposure, while projects leasing space inside an existing industrial park generally do not trigger the same requirement, since the zone developer already carries the land obligation.
Project security deposit or bank guarantee
Investors may secure the obligation with a cash deposit or with a bank guarantee. The commercial difference is working capital: a guarantee preserves cash at the cost of a fee and of collateral or covenants agreed with the issuing bank, while a deposit ties up funds but avoids bank negotiation entirely.
Groups financing a project should settle this early, because lenders take a view on whether guarantee capacity is used for the project security deposit or reserved for construction and offtake obligations. Our project finance team handles that allocation as part of the wider security package.
Project security deposit return and adjustment
Decree 96/2026 addresses the conditions for returning, adjusting and terminating the security for project implementation. In practice the deposit is released progressively as the project achieves milestones, which is why the milestones recorded in the certificate matter beyond their licensing function – they are the release triggers.
Two disciplines protect the investor. Register a schedule the project can actually meet, since an optimistic timetable converts directly into deferred release and, in the worst case, forfeiture. And where the schedule slips for genuine reasons, amend the certificate rather than allowing a divergence to accumulate, as our IRC adjustment guide explains.
The special procedure commitment
Under the special investment procedure, the deposit or guarantee commitment carries additional weight because it substitutes for pre-approval scrutiny. The state accepts registration in place of appraisal and relies on the financial commitment and on supervision to enforce what appraisal would otherwise have verified. Investors choosing that route should therefore treat the commitment as the operative obligation of the project rather than an administrative formality.
Project security deposit FAQs
How much is required?
The amount is calculated against project capital on a scale, with reductions available in cases the regulations specify – typically incentivised sectors and locations, as our investment incentives guide describes. Sponsors should model it into the funding plan rather than treating it as a closing cost.
When is it paid?
Before land is handed over or the project may proceed, depending on structure – which means it must be funded before revenue exists.
Can it be forfeited?
Yes, where the project fails to proceed as committed. Amending the certificate when circumstances change is the mechanism that protects it. Texts are published via the Ministry of Finance.
Modelling the project security deposit into the funding plan
The deposit is funded before revenue exists, which makes it a genuine call on equity at the least convenient point in a project’s life. Sponsors who model it late discover the gap during financial close, when the options are expensive: additional equity, a more costly guarantee facility, or a delayed handover of land.
Three modelling decisions matter. Whether cash or guarantee is used, and what the guarantee facility costs in fees and collateral. When the obligation crystallises relative to land handover and construction drawdown. And how release milestones map to the construction programme, since each released tranche returns working capital to the project at a defined point.
Treated this way, the project security deposit becomes a scheduled funding item with a known return profile rather than an unwelcome surprise, and lenders assess it as part of the sources and uses rather than as an unexplained equity call.
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.
