Can public service providers lease out public property in Vietnam?

Can public service providers lease out public property in Vietnam?

Pursuant to Article 57 of the Law on Management and Use of Public Property 2017 stipulates use of public property of public service providers for lease as follows:

1. A public service provider is entitled to lease out public property if:

a) The property is distributed, invested in construction or purchased to perform tasks assigned by the State but it has not been used at full capacity;

b) The property is invested in construction or purchased in accordance with a project approved by a competent authority for lease that is not funded by the state budget.

2. Power to approve plans for the lease of public property of public service providers:

a) Ministers, heads of central authorities and chairmen of People’s Committees of provinces shall approve plans towards property which is public service facilities; other property with high value as prescribed by the Government;

b) Management councils or heads of public service providers shall approve plans towards property that is not specified in Point a of this Clause.

3. Form of lease and property rental:

a) The property which is a public service facility and other property with high value as prescribed by the Government shall be leased out in the form of an auction; property rental shall be the final bid;

b) The property that is not specified in Point a this Clause shall be leased out by negotiation; property rental shall be negotiated by and between the lessor and the lessee according to the rental listed on the market of the property with the same type or the property having the same specification, quality or origin.

And according to Clause 2, Article 55 of the Law on Management and Use of Public Property 2017, general provisions on use of public property of public service providers for commercial purposes, for lease and for joint venture purposes are as follows:

2. Use of public property for commercial purposes, for lease or joint venture purposes shall satisfy the following requirements:

a) Being granted permission by the competent authorities specified in Clause 2 Article 56, Clause 2 Article 57 and Clause 2 Article 58 herein;

b) Not affecting the performance of functions and tasks assigned by the State;

c) Not losing the public property ownership; preserving and developing capital and property distributed by the State;

d) Using the property for the right purposes assigned and purposes of construction investment, purchase; fulfilling functions and tasks of public services providers;

dd) Increasing capacity and efficiency of using the property;

e) Ensuring the depreciation of fixed assets, fulfilling obligations on tax, fees, charges and other state financial obligations;

g) The State shall not provide funding for maintenance or repair of public property that is used for commercial purposes, for lease or for joint venture purposes only; public service providers shall use proceeds earned from business, lease or joint ventures to maintain or repair public property;

h) Ensuring the market mechanism and complying with regulations of relevant law.

Thus, your unit can lease out the property but must ensure the above regulations in Vietnam. In addition, the public service provider must be responsible for formulating a scheme on use of public property at public service providers for leasing out according to the provisions of Article 44 of Decree 151/2017/ND-CP.

What are regulations on scheme on use of public property at public service providers for leasing out in Vietnam? 

Pursuant to Article 44 of Decree 151/2017/ND-CP corrected by Point 1 of Official Letter 41/CP-KTTH in 2018 on the scheme on use of public property at public service providers for business, leasing out, joint venture or association purposes as follows:

1. The public service provider is responsible for formulating a scheme on the use of public property for business, leasing, joint venture or association purposes using Form No. 02/TSC-DA issued together with this Decree.

2. Property of great value specified at Point a, Clause 2, Article 56, and Point a, Clause 2, Article 57 of the Law on Management and Use of Public Property, granted by Ministers, Heads of Central Agencies or People's Committees The province shall decide in accordance with the type of property and the functions, tasks and capacity of the non-business units under its management.

3. For projects on using public property for business or leasing purposes:

a) The public service provider shall report to the superior management agency (if any) for consideration and request for appraisal opinions of the agency assigned to perform the task of public property management specified in Clause 2, Article 19 of the Law on Management and Use of Public Property (for centrally managed units), Department of Finance (for locally managed units);

b) Within 30 days from the date of receipt of the project, the agency assigned to perform the task of public property management specified in Clause 2, Article 19 of the Law on Management and Use of Public Property, the Department of Finance. consider, give appraisal opinions on: Necessity; the suitability of the project with the functions and tasks of the unit, the provisions of law on management and use of public property and relevant laws; the contents of the project need to be adjusted and perfected;

c) Within 30 days from the date of receipt of the appraisal opinion, the public service provider is responsible for studying and absorbing the appraisal opinion in order to revise and complete the scheme and submit it to the agency or person. having the authority specified in Clause 2, Article 56 and Clause 2, Article 57 of the Law on Management and Use of Public Property to approve. Particularly for projects on using assets that are the basis of non-business activities of public service providers under the central management, the historical cost according to accounting books is from VND 500 billion inMinisters, heads of central agencies must consult the Prime Minister (for public service providers managed by the central government), chairpersons of provincial-level People's Committees must seek opinions of the People's Committee of the People's Council at the same level (for non-business units under the management of the locality) before approving.

4. For projects on using public assets for joint venture or association purposes:

a) The public service provider shall report to the superior management agency (if any) for consideration and send it to the agency assigned to perform the task of public property management specified in Clause 2, Article 19 of the Law on Management and Use of Public Property (for centrally managed units), Department of Finance (for locally managed units);

b) Within 30 days from the date of receipt of the scheme on the use of public property for the purpose of joint venture or association, the agency assigned to perform the task of public property management specified in Clause 2, Article 19 of this Law The Law on Management and Use of Public Assets shall consider and give opinions on projects on the use of public property for joint venture or association purposes by centrally managed public service providers and report to ministries and agencies to consult the Ministry of Finance; The Department of Finance considers and gives opinions on the project of using public property for the purpose of joint venture or association of public service providers under the management of the locality, and reports it to the People's Committee of the province for opinions. Standing of the People's Council at the same level on the project of using public property for the purpose of joint venture or association;

c) Dossier to be submitted for comments to the Ministry of Finance and the Standing Committee of the Provincial People's Council includes:

- A written request enclosed with the proposal of the ministry, central agency, Department of Finance on the project of using public property for joint venture or association of the unit: 01 original;

- Project on using public property for joint venture and association of the unit: 01 copy;

- A document of a competent agency or person defining the functions, tasks and organizational structure of the unit: 01 copy;

- Other relevant documents (if any): 01 copy;

d) Within 30 days from the date of receipt of a complete and valid dossier, the Ministry of Finance and the Standing Committee of the provincial People's Council are responsible for commenting on: The completeness and validity of the dossier; the need; the suitability of the project with the functions and tasks of the unit, the provisions of law on management and use of public property and relevant laws; the contents of the project need to be adjusted and perfected;

dd) Ministers, heads of central agencies (for centrally-managed units), presidents of provincial-level People's Committees (for locally-managed units) direct the unit having research study and collect opinions to revise and complete the project, submit it to the Minister, the Head of the central agency (for centrally managed units), the President of the Provincial People's Committee (for the centrally managed unit) under the management of the locality) within 30 working days from the date of receipt of written comments from the Ministry of Finance, the Standing People's Council of the province;

e) Within 30 days after receiving the completed project from the unit, the minister, the head of the central agency (for centrally managed units), the President of the provincial People's Committee (for units under local management) decide to approve the project according to its competence or give a written response to the unit in case of disagreement with the scheme. Particularly for projects on using assets that are the basis of non-business activities of public service providers under the central management, whose historical cost according to accounting books is VND 500 billion or more, ministers and heads of central agencies shall The central government must consult the Prime Minister before approving.

Best Regards!