03 forms of medium and long-term capital mobilization of the local investment and development fund in Vietnam

According to the Decree No. 147/2020/NĐ-CP of the Vietnam Government, the local investment and development fund may mobilize medium and long-term capital sources in the following forms:

1. Borrowing from domestic and foreign organizations as prescribed by law. The borrowing of foreign capital shall comply with the provisions of the law on foreign debt.

2. Issuing bonds of the local investment and development fund.

3. Other medium and long-term capital mobilization methods as prescribed by law.

Concurrently, the local investment and development fund is entitled to receive deposits in accordance with relevant laws.

Note: The total mobilized capital of the local investment and development fund mentioned above is maximum 06 times the Fund's equity as recorded in the annual financial statements or semiannual financial statements at the latest time.

Moreover, the Decree No. 147/2020/NĐ-CP also stipulates changes to the charter capital of the local investment and development fund as following:

- In case of changing the charter capital level stated in the establishment decision, the People's Committee of the province shall report to the People's Council of the province for consideration and decision, ensuring the minimum capital level as prescribed in Clause 1 Article 6 of the Decree No. 147/2020/NĐ-CP.

- In case of additional allocation of charter capital from the development investment fund, the People's Committee of the province shall consider and decide.

(The method of determining the adjusted charter capital of the Fund shall be applied according to the provisions of law for enterprises in which 100% of charter capital is held by the State. The Ministry of Finance of Vietnam shall specifically guide the method of determining the adjusted charter capital level of the Fund in accordance with the operational nature of the Fund)

More details at the Decree No. 147/2020/NĐ-CP of the Vietnam Government, effective from February 05, 2021.

Ty Na

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