Government of Vietnam's comments on the Draft Law on management and investment of state capital in enterprises (amended)

Government of Vietnam's comments on the Draft Law on management and investment of state capital in enterprises (amended) (Image from the internet)

Government of Vietnam's comments on the Draft Law on management and investment of state capital in enterprises (amended)

On September 1, 2024, the Government of Vietnam issued Resolution 126/NQ-CP on the specialized session on law-making in August 2024.

The Government of Vietnam agreed to assign the Ministry of Finance to study, absorb the maximum opinions of Government members, complete the Law project dossier, ensuring the following requirements:

- Fully institutionalize the guidelines, policies of the Communist Party and directives of the National Assembly, the Government of Vietnam on the renewal, restructuring, and development of state-owned enterprises; thoroughly address the inadequacies and obstacles arising from practice that have no legal basis for resolution in the spirit of Resolution 12-NQ/TW dated June 3, 2017, of the Central Executive Committee at the Fifth Plenum of the Twelfth Central Executive Committee of the Communist Party on continuing to restructure, renew and raise the efficiency of state-owned enterprises and the requirements for development to unblock resources in state-owned enterprises; clearly delineate the responsibilities of each subject when participating in state capital management and investment at enterprises; clearly distinguish between state management and state capital management.

- Enhance decentralization, delegation of power to owner representative agencies, enterprises, state capital representatives at enterprises, ensuring decentralization, delegation of power coupled with increasing execution capacity, effectively allocating resources; stipulate mechanisms for monitoring, inspecting the activities of each management level; evaluate the efficiency of enterprise management activities according to the overall goals, not by individual projects; cut and simplify administrative procedures to increase investment opportunities for enterprises; focus on stipulating the effective management and investment of state capital in enterprises to create a liberal mechanism to motivate state-owned enterprises to organize production and business effectively, unblock resources for development (including land resources) instead of restricting the rights of state enterprises in investment and capital contribution for production and business.

- Review the draft Law with other related Laws, especially the Enterprise Law, Investment Law, Public Investment Law, Public Debt Management Law, State Budget Law, Construction Law... to ensure synchronization, consistency, avoid overlaps, conflicts leading to different interpretations during implementation; ensure compatibility with international treaties to which the Socialist Republic of Vietnam is a member; ensure the principle of inheriting the provisions of Law No. 69/2014/QH13 and regulations in legal documents guiding the implementation of this Law that have been applied stably, effectively in practice, having a positive impact on the development of state-owned enterprises; ensure the harmony of the interests of the State, enterprises, and the rights of employees in state enterprises.

- Strengthen consultation activities, gather opinions from agencies, organizations, enterprises, experts, and scientists to study, complete the draft Law; promote policy communication work to create consensus among the People, enterprises, related agencies, organizations, and directly affected subjects.

- Regarding the addition of sectors and fields eligible for investment to establish enterprises (such as green economy, digital economy, circular economy, preservation, and promotion of cultural - social values, etc.): The Ministry of Finance of Vietnam should carefully review the expansion, ensuring compatibility with Resolution 12-NQ/TW on the State focusing on key, essential fields, important regions, and national defense - security; areas where enterprises of other economic sectors do not invest; strengthen the development of some large-scale enterprises with effective operations, capable of regional and international competition in some key sectors and fields of the economy.

- Regarding the Development Investment Fund retainable at an enterprise: The Ministry of Finance of Vietnam should continue to study, evaluate, and determine the appropriate post-tax profit allocation level in line with the investment resource needs of the enterprise, creating growth momentum for state enterprises, while ensuring the balance of the state budget; carefully evaluate the legal and practical basis for transferring the Development Investment Fund between enterprises under the decision of the competent authority, ensuring no solicitation mechanism is created and no administrative interventions by state agencies in the production and business activities of enterprises.

- Regarding regulations related to capital investment activities, rearrangement, and restructuring of enterprise capital: The Ministry of Finance should review all provisions of the draft Law on authority, order, procedures, roles, and responsibilities of related agencies in performing procedures to approve investment policies, procedures for project appraisal, investment project approval, procedures for appraisal of the Ministry of Finance when performing mergers and consolidations of enterprises, ensuring the promotion of decentralization, delegation of power, clear delineation of roles and responsibilities of state management agencies, owner representative agencies, and enterprises, eliminating unnecessary administrative procedures.

Assign the Ministry of Finance of Vietnam to take the lead, in cooperation with the Ministry of Justice, the Ministry of Planning and Investment, the Government Office, the Committee for State Capital Management at Enterprises, and related ministries and agencies to seriously absorb the opinions of the Government Standing Committee, the opinions of Government members; to study, carefully review the issues raised in Document No. 98/BDMDN dated August 19, 2024, of the Steering Committee for Enterprise Renewal and Development, and the appraisal opinions of the Ministry of Justice; to focus resources, proactively continue to cooperate with related ministries and agencies to urgently complete the Law project in accordance with the provisions of the Law on the Promulgation of Legal Documents, send it to the Ministry of Justice for opinions, report to the Prime Minister of the Government of Vietnam before August 31, 2024.

More details can be found in Resolution 126/NQ-CP issued on September 1, 2024.

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