Is it permissible to establish a fund in Vietnam with only 2 founding members? What are conditions to be satisfied to obtain a fund establishment license in Vietnam?

Is it permissible to establish a fund in Vietnam with only 2 founding members?

Pursuant to Article 11 of the Decree 93/2019/NĐ-CP stipulating founding members of funds in Vietnam as follows:

1. Founding members of a fund are required to meet the following conditions:

a) They must be Vietnamese citizens or organizations;

b) If the founding member is a Vietnamese citizen, he/she must have full capacity for civil acts and no previous criminal convictions;

c) If the founding member is a Vietnamese organization, it must be duly established and have its charter or document defining its functions and tasks, a resolution of its leadership or decision of its head on the establishment of fund, and a decision on appointment of a representative to act as a fund's founding member; in case of a foreign-invested organization, its representative who acts as a fund’s founding member must be a Vietnamese citizen;

d) They have contributed assets to establish the fund as prescribed in Article 14 hereof;

dd) If a founding member is subject to the management of a competent authority, a written approval from such competent authority must be obtained according to regulations on management of officials before submitting an application for establishment license and acknowledgment of the fund’s charter to the competent authority as prescribed in Article 18 hereof.

2. Founding members shall establish a fund founding board. Such fund founding board is comprised of at least 03 founding members, including its head, deputy head and member.

3. The fund founding board shall prepare an application for establishment license as prescribed in Article 15 hereof and send it to a competent authority as prescribed in Article 18 hereof. It shall request the Fund Management Council to compile the draft charter and other documents included in the application for establishment license.

As regulations above, fund founding board is comprised of at least 03 founding members. With only 2 members, you and your friend cannot establish a fund.

What are conditions to be satisfied to obtain a fund establishment license in Vietnam?

Pursuant to Article 10 of the Decree 93/2019/NĐ-CP stipulating conditions to be satisfied to obtain a fund establishment license in Vietnam as follows:

1. The fund has operation objectives as defined in Article 3 hereof.

2. It has founding members as prescribed in Article 11 hereof.

3. The fund founding board has sufficient assets to contribute for the fund establishment as prescribed in Article 14 hereof.

4. It has an application for establishment as prescribed in Article 15 hereof.

Pursuant to Article 14 of the Decree 93/2019/NĐ-CP stipulating assets contributed to funds in Vietnam as follows:

1. Assets contributed to a fund include:

a) Amounts of money in Vietnam dong;

b) Assets converted into Vietnam dong (including objects, foreign currencies, financial instruments and other property rights) of Vietnamese citizens and organizations that are the fund's founding members and those contributed by foreign citizens and organizations to establish the fund with Vietnamese citizens and organizations. Assets which are offices, equipment or technologies must be valued by a duly established valuation organization. Such valuation must be carried out within the last 06 months before the date of submission of application for establishment license;

c) If other assets, excluding the amounts of money in Vietnam dong, are contributed to the fund, the amounts of money in Vietnam dong must be accounted for at least 50% of total value of the fund's assets.

2. If a fund is established by Vietnamese citizens and/or organizations, the value of contributed assets converted into Vietnam dong must meet the following limits:

a) VND 6,500,000,000 (six billion five hundred million), if the fund operates nationwide or in more than one province;

b) VND 1,300,000,000 (one billion three hundred million), if the fund operates within a province;

c) VND 130,000,000 (one hundred thirty million), if the fund operates within a district;

d) VND 25,000,000 (twenty-five million), if the fund operates within a commune.

3. If a fund is established by asset contribution by foreign citizens and/or organizations and Vietnamese citizens and/or organizations, the value of contributed assets converted into Vietnam dong must meet the following limits:

a) VND 8,700,000,000 (eight billion seven hundred million), if the fund operates nationwide or in more than one province;

b) VND 3,700,000,000 (three billion seven hundred million), if the fund operates within a province;

c) VND 1,200,000,000 (one billion two hundred million), if the fund operates within a district;

d) VND 620,000,000 (six hundred twenty million), if the fund operates within a commune.

4. The ownership of assets contributed to a fund must be transferred to that fund within 45 business days from the date on which the fund is granted an establishment license and has its charter acknowledged. Assets contributed to a fund must not be under any disputes or used for fulfillment of any financial liabilities.

Above are conditions to be satisfied to obtain a fund establishment license in Vietnam. In your case, you need at least VND 1,200,000,000 (one billion two hundred million) for establish a fund operating within a district in Vietnam.

Best regards!