Vietnam: Scope of state investment in business establishment

17:37, 12/04/2016

The Law on management and utilization of state capital invested in the enterprise’s manufacturing and business activities 2014 of Vietnam governs the investment of state capital in an enterprise; the management and utilization of state investments in an enterprise's manufacturing and business activities as well as the supervision of investment, management and utilization of state capital used as financing for an enterprise.

According to the Law on management and utilization of state capital invested in the enterprise’s manufacturing and business activities 2014 of Vietnam, state investment in business establishment shall be made within the following scopes:

- Enterprise providing basic public products and services;

- Enterprises operating in the direct auxiliary sector for the purpose of national defense and security;

- Enterprises operating in the natural monopoly sector;

- Hi-tech enterprises, and those making large-scale investment in and serving as the driving force behind the fast growth of different industries, sectors as well as the entire economy.

The Government shall provide specific regulations on state investment in business establishment and order placement mechanism of the State, applicable to the enterprise that plays its significant roles in regulating the national macro-economy and maintaining the social security.

Regarding the decision-making authority over state investment in business establishment:

- The Prime Minister shall be vested with the authority to grant a decision to make state investment in business establishment as follows:

+ Enterprises having operating capital acquired from the implementation of national important projects approved under the decision on investment policies granted by the National Assembly;

+ Parent companies of state-owned economic corporations and enterprises specializing in the investment and trading of state capital.

- The owner’s representative agency shall have the authority to decide to invest state capital in the establishment of enterprises which are not mentioned above.

In case state investment in business establishment can meet requirements the same as those applied to national important projects, the Prime Minister shall grant an investment decision after the National Assembly's consent to investment policies.

View more: Law on management and utilization of state capital invested in the enterprise’s manufacturing and business activities 2014 of Vietnam, effective from July 01, 2015.

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