Decree No. 147/2020/NĐ-CP: 04 cases of dissolution of the local investment and development fund in Vietnam

According to Article 43 of the Decree No. 147/2020/NĐ-CP of the Vietnam Government, a local investment and development fund shall be dissolved in one of the following cases:

(1) The fund has been established and operated but after 03 years from the effective date of this Decree, the actual charter capital is less than VND 300 billion.

(2) The fund is assessed as not fulfilling its tasks and has a ratio of outstanding loans and investments (excluding entrusted loans) to equity of less than 20% for 5 consecutive years .

(3) Ratio of bad debt to total loan balance is higher than 50% or ratio of bad debts to total invested capital is higher than 80% and accumulated negative revenue - expenditure difference is greater than or equal to 75 % of the actual charter capital of the local investment and development fund for 5 consecutive years.

(4) Cases where the fund is not operated effectively or it is not necessary to maintain the fund as assessed by the Provincial People's Committee.

Moreover, Provincial People's Committees shall establish Dissolution Councils to advise the Provincial People's Committees on the plan and implementation of dissolution of the local investment and development fund. The composition of the Dissolution Council includes:

- Leaders of the People's Committee of the province.

- Representative leaders of the Departments: Finance, Planning and Investment, Home Affairs and Labor - War Invalids and Social Affairs.

- Representative of the local branch of the State Bank of Vietnam.

- The Fund Management Council, the local investment and development fund Control Board.

- Representatives of relevant agencies (if necessary) according to local decisions.

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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