02 forms of conversion of public non-business units into joint stock companies in Vietnam from February 15, 2021

According to Article 5 of the Decree No. 150/2020/NĐ-CP of Vietnam’s Government, forms of conversion of public non-business units include:

First: Maintain the existing state capital in public non-business units, issue more shares to increase charter capital.

Second: Selling a part of existing state capital in a public non-business unit or both selling part of state capital and issuing more shares to increase charter capital.

Thus, public non-business units shall be transformed into joint stock companies when simultaneously meeting the following conditions:

- Self-guaranteeing recurrent expenditure and investment or self-guaranteeing recurrent expenditure in the year nearest to the time of conversion;

- State capital remains after financial processing and re-valuation of public non-business units;

- Under the list of industries and fields in which the transformation of public non-business units into joint-stock companies shall be decided by the Prime Minister of Vietnam in each period. This list does not include industries and fields that are not regulated by specialized law to convert public non-business units into joint stock companies;

- Having a plan to rearrange and handle houses and land approved by a competent authority in accordance with the law on management and use of public property.

Note: 08 groups of public non-business units converted into joint stock companies include:

(1) Public non-business units affiliated to ministries, ministerial-level agencies, agencies attached to the Government;

(2) Public non-business units affiliated to units under ministries, ministerial-level agencies, and agencies attached to the Government;

(3) Public non-business units under the People's Committees of central-affiliated provinces and cities (hereinafter referred to as provincial People's Committees);

(4) Public non-business units affiliated to specialized agencies and other administrative organizations of the People's Committee of the province;

(5) Public non-business units under the People's Committees of districts, towns, provincial cities (hereinafter referred to as district-level People's Committees);

(6) Public non-business units under Hanoi National University, Vietnam National University Ho Chi Minh City;

(7) Public non-business units affiliated to public non-business units under ministries, ministerial-level agencies, Government agencies, provincial-level People's Committees, Hanoi National University, Ho Chi Minh City National University ;

(8) Public non-business units belonging to enterprises in which 100% of charter capital is held by the State;

View more details at the Decree No. 150/2020/NĐ-CP of Vietnam’s Government, effective from February 15, 2021.

Ty Na

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