From June 2022, when are wholly state-owned enterprises sold in Vietnam? Which entities in Vietnam are not allowed to acquire this type of business?
When are wholly state-owned enterprises sold in Vietnam?
Pursuant to Article 22 of Decree 23/2022/ND-CP stipulating as follows:
“Article 22. Cases of selling the entire enterprise
1. In the category of equitization according to regulations but do not meet the conditions for equitization and have been decided to sell the entire enterprise by the Prime Minister.
2. Other cases decided by the Prime Minister based on the owner's representative agency.”
Thus, wholly state-owned enterprises will be sold entirely when ineligible for equitization and it is decided to sell by the Prime Minister of Vietnam. In addition, the Prime Minister also decided to sell wholly state-owned enterprises at the request of the owner's representative agency.
Which entities are not allowed to acquire wholly state-owned enterprises in Vietnam? When are wholly state-owned enterprises sold in Vietnam?
Which entities are not allowed to acquire wholly state-owned enterprises in Vietnam?
Pursuant to Article 23 of Decree 23/2022/ND-CP stipulating as follows:
“Article 23. The following entities may not acquire enterprises
1. The person having no civil act capacity, person having lost his/her civil act capacity or having his/her civil act capacity restricted, person having difficulties in cognition or behavior control, or person having no cognition or behavior control ability;
2. Financial intermediaries, auditing agencies that determine enterprise value and person working in the property organization that assess, the person directly engaged in property appraisal or valuation; or parent, spouse, child or blood sibling of the person directly engaged in property appraisal or valuation;
Enterprise auction organizations, the person working in the property auction organization that conducts the auction; parent, spouse, child or blood sibling of the auctioneer.
3. The person authorized by the owner's representative agency to handle the sale of the enterprise; the person who has the right to decide on the sale of the enterprise, the person who signs the enterprise auction service contract;
4. Parent, spouse, child or blood sibling of the person specified in Clause 3 of this Article;
5. Persons who do not have the right to establish and manage enterprises as prescribed by law.
6. Foreign investors shall comply with the provisions of the law on investment relating to conditions on market access, assurance of national defense and security, and the law on land.”
Thus, the mentioned cases are not allowed to buy a wholly state-owned enterprise.
What is the sale process of a wholly state-owned enterprise in Vietnam?
Pursuant to Article 25 of Decree 23/2022/ND-CP stipulates as follows:
“Article 25. The process of selling the entire enterprise
1. Develop a plan to sell the entire enterprise, including:
a) Prepare dossiers and documents, including: legal documents on enterprise establishment; legal documents on assets, sources of capital and debts; financial statements, tax finalization reports up to the time of enterprise valuation; the plan of land use accordance with the provisions of the law on land, the law on rearrangement and handling of state-owned housing and land from time to time, which has been approved by state agencies; labor rearrangement plan; estimate the cost of selling the entire enterprise; method, form and time of enterprise valuation and other relevant documents (if any);
b) Organize inventory, handle financial issues and organize enterprise valuation;
c) Decide and announce the enterprise value;
d) Complete the plan to sell the entire enterprise and submit it to competent authorities for approval. The plan to sell the entire enterprise must include basic contents such as: The current situation of the company at the time of enterprise valuation; Result of enterprise valuation; Determination of selling price and method of sale, estimated costs of implementation; The enterprise's land use plan has been approved by a competent authority; The plan to use labor is managing and resolving redundant labor.
2. Organize the implementation of the plan to sell the entire enterprise by auction method.
3. Complete the sale of the entire enterprise: Finalize the selling costs and the proceeds from the sale of the entire enterprise; pay; hand over assets and related documents to auction winners; announce about the completion of the sale of the entire business.”
Thus, the order to sell a wholly state-owned enterprise in 3 steps as follows:
- Step 1: Develop a plan to sell the entire business:
+ Prepare documents and documents related to the establishment, assets, liabilities, financial statements, tax finalization reports,... of the enterprise.
+ Organize inventory and handle arising financial problems for enterprise valuation;
+ Complete the plan to sell the entire business.
- Step 2: Organize the plan to sell the business in the form of an auction.
- Step 3: Complete the sale of the entire business, finalize costs and hand over assets.
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