Policies for investment in development of infrastructure and equipment for cooperatives in Vietnam from November 1, 2024

Policies for investment in development of infrastructure and equipment for cooperatives from November 1, 2024 (Image from the Internet)

On September 12, 2024, the Government of Vietnam issued Decree 113/2024/ND-CP providing detailed regulations on certain terms of the Cooperative Law 2023.

Policies for investment in development of infrastructure and equipment for cooperatives in Vietnam from November 1, 2024

Article 13 of Decree 113/2024/ND-CP outlines the policies for investment in development of infrastructure and equipment for cooperatives as follows:

- Subjects of support: artels, cooperatives, cooperative unions.

- Support content: Investment in infrastructure and equipment for artels, cooperatives, cooperative unions to serve production and business activities, social welfare, environmental protection, adaptation to climate change, and the formation of production chains, processing, and consumption of products.

- Source of support: state budget; preferential credit capital; legally mobilized and sponsored capital from domestic and foreign individuals and organizations.

- Support form and level:

+ Investment support for the development of infrastructure and equipment for artels, cooperatives, cooperative unions from public investment capital is carried out in the form of programs and projects as per the legal regulations on public investment. The project may include multiple works or items of infrastructure, equipment supported for cooperative groups, cooperatives, cooperative alliances across various sectors, fields, and regions; project classification criteria are implemented according to legal regulations on public investment, if the works or items in the project span multiple fields, classification is based on the field with the largest capital proportion. Public investment capital supports up to 100% of the project's total investment, with the specific level of support for each project determined by the investment decision-making authority, in line with priority orientation and the capacity to allocate public investment capital in each period;

+ Support for investment in infrastructure development and equipment for artels, cooperatives, cooperative unions from the state budget, preferential credit capital, legally mobilized capital from domestic and foreign entities is conducted under relevant legal regulations.

- Regulations on support from public investment capital:

Considering the orientations, priority support for sector development, the capacity to balance public investment capital in each five-year period, the need for investment support in infrastructure development and equipment for cooperative groups, cooperatives, cooperative alliances:

+ Ministries and central agencies allocate public investment capital assigned for management for programs and projects investing in infrastructure and equipment under their management in accordance with principles, criteria, quotas for allocating public investment capital from the state budget in each mid-term public investment plan;

+ Provincial People's Committees utilize and allocate public investment capital assigned for management, including targeted additional capital from the superior budget, for programs and projects investing in infrastructure and equipment managed by the province in accordance with principles, criteria, quotas for allocating public investment capital from the state budget in each mid-term public investment plan.

- Procedure for aggregating investment support needs for infrastructure and equipment development using public investment capital managed by ministries and central agencies:

+ Based on the principles, criteria, and quotas for allocating public investment capital from the state budget for the next phase of the competent authority and the directive on drafting the mid-term public investment plan for the next phase by the Prime Minister of the Government of Vietnam, ministries and central agencies issue written guidance for artels, cooperatives, cooperative unions to identify needs and propose investment support for infrastructure and equipment development for artels, cooperatives, cooperative unions from public investment capital managed by their ministries and central agencies in the next phase’s investment plan;

+ Based on registration of investment support needs for infrastructure and equipment development of cooperative groups, cooperatives, cooperative alliances from public investment capital, within 10 days of receiving the proposal document, ministries and central agencies review and issue written feedback to cooperative groups, cooperatives, cooperative alliances, notifying the suitability of the proposal based on principles, subjects, criteria, benefit conditions, and development orientation for sectors and fields in the phase. If suitable according to principles, subjects, criteria, conditions of benefit, and development orientation for sectors and fields in the phase, ministries and central agencies aggregate the support needs of cooperative groups, cooperatives, cooperative alliances into their next mid-term public investment plan;

+ Ministries and central agencies issue documents notifying synthesis results of the support needs of cooperative groups, cooperatives, cooperative alliances mentioned in point b, paragraph 6, Article 13 of Decree 113/2024/ND-CP to the provincial People's Committees for management following Form No. 03 in the Appendix attached to Decree 113/2024/ND-CP. If the synthesis results of the needs by ministries and central agencies coincide with the synthesis of needs mentioned in point b, paragraph 7, Article 13 Decree 113/2024/ND-CP or are unclear, the provincial People's Committees shall notify the ministries and central agencies for coordination as per stipulations in paragraph 3, Article 17 of Cooperative Law 2023;

Form No. 03

+ After coordinating to clarify the registration of cooperative groups, cooperatives, cooperative alliances with the provincial People's Committees mentioned in point c, paragraph 6, Article 13 of Decree 113/2024/ND-CP, ministries, and central agencies delegate specialized departments to prepare a report proposing investment initiative for programs and projects developing infrastructure and equipment for cooperative groups, cooperatives, cooperative alliances as stipulated in paragraph 8, Article 13 of Decree 113/2024/ND-CP.

- Procedure for aggregating investment support needs for infrastructure and equipment development using public investment capital managed by the provincial People's Committees:

+ Based on principles, criteria, and quotas for allocating public investment capital from the state budget for the next stage by the competent authority and the directive on drafting the mid-term public investment plan for the next stage by the Prime Minister of the Government of Vietnam, the provincial People's Committees guide related agencies and units to guide artels, cooperatives, cooperative unions in their area to identify needs and propose investment support for infrastructure and equipment development for artels, cooperatives, cooperative unions from public investment capital managed by local authorities in the next phase’s plan;

+ Based on registration of needs for infrastructure and equipment development support for cooperative groups, cooperatives, cooperative alliances from public investment capital in the managed area, within 10 working days from the receipt of the proposal document from the subordinate People's Committees, district-level People's Committees review and issue written feedback to cooperative groups, cooperatives, cooperative alliances, notifying the suitability of the proposal based on principles, subjects, criteria, conditions of benefit, and development orientation for sectors and fields in the phase. If suitable according to principles, subjects, criteria, conditions of benefit, and development orientation for sectors and fields in the phase, district-level People's Committees aggregate the support needs of cooperative groups, cooperatives and cooperative alliances in the managed area and submit it to the Provincial Department of Planning and Investment;

+ Based on the registration of needs by district-level People's Committees, the Provincial Department of Planning and Investment reports to the provincial People's Committees to delegate subordinate specialized departments or district-level People's Committees to prepare a report proposing investment initiative for projects supporting infrastructure and equipment for artels, cooperatives, cooperative unions as stipulated in paragraph 8, Article 13 of Decree 113/2024/ND-CP.

- The procedures for formulating, appraising, and deciding the investment policy, planning, appraising, and deciding investment, and drafting and assigning mid-term and annual public investment plans with central budget capital for programs and projects in paragraphs 6 and 7, Article 13 of Decree 113/2024/ND-CP shall be conducted under public investment law and other relevant regulations. Should programs or projects for infrastructure and equipment investment support for artels, cooperatives, cooperative unions managed by provincial People's Committees be implemented on the same district-level area and if district-level People's Committees meet experience, management capacity, and execution requirements, the Chairman of the provincial People's Committees considers assigning district-level People's Committees as the investor of programs and projects.

- Implementation method and management mechanism post-investment:

+ For projects investing in infrastructure works and equipment solely used by a cooperative group, cooperative, or cooperative alliance: state agencies executing the project will hand over to the cooperative group, cooperative, or cooperative alliance for use. The cooperative group, cooperative, or cooperative alliance shall cover expenses for operation, maintenance, and repair of these works and assets after handover. These expenses are accounted as production and business costs of the cooperative group, cooperative, or cooperative alliance;

- For projects investing in infrastructure works and equipment used jointly by two or more cooperative groups, cooperatives, cooperative alliances: state agencies execute the project; and the agency deciding the project investment considers assigning or authorizing a competent state unit for management as per legal regulations;

- The infrastructure and equipment that artels, cooperatives, cooperative unions receive support for is shared property among members of the cooperative group, and indivisible shared property of the cooperative and cooperative alliances.

- For projects supporting investment in infrastructure and equipment development using all local budget public investment capital, the process of planning, appraising, deciding investment policy, decision-making, and allocation of mid-term and annual capital follows public investment law, principles, criteria, and quotas for state budget capital allocation provided by competent authorities and regulations of People's Councils at all levels.

- For projects supporting investment in infrastructure and equipment development within national target programs, the process of planning, appraising, deciding investment, and allocation of mid-term and annual capital is conducted in accordance with public investment law, regulation on management mechanisms, implementation organization of national target programs, and regulations by People's Councils at all levels.

More details can be found in Decree 113/2024/ND-CP which comes into force in Vietnam from November 1, 2024.

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