Procedures for dissolution of the land development funds in Vietnam from August 1, 2024

Procedures for dissolution of the land development funds in Vietnam from August 1, 2024 (Internet image)

On July 31, 2024, the Government of Vietnam issued Decree 104/2024/ND-CP regulating the land development fund.

Procedures for dissolution of the land development funds in Vietnam from August 1, 2024

According to Article 23 of Decree 104/2024/ND-CP, the procedures for dissolution of the land development funds in Vietnam from August 1, 2024 are as follows:

- In cases where the land development funds has been established but it is determined that it is unnecessary to maintain the Fund, the provincial People's Committee will form a dissolution Council to advise the provincial People's Committee on the plan and organization for the dissolution of the Fund. The composition of the dissolution Council includes:

+ Leadership of the provincial People's Committee.

+ Representatives of leadership from relevant provincial departments and authorities.

+ The Fund Management Council, the Fund Supervisory Board.

+ Representatives from other related agencies (if necessary) as decided by the provincial People's Committee.

- The dissolution Council will develop a dissolution plan and report to the provincial People's Committee for submission to the provincial People's Council for approval. The dissolution plan of the land development funds includes the following contents:

+ An assessment from an independent auditor on the financial status and the determination of the actual value of the Fund's charter capital, unless the Fund has an independently audited financial report within six months prior to the dissolution decision date.

+ The plan for handling the charter capital and the Fund's assets.

+ The plan for transferring the entrusted funds and the entrustments received by the Fund.

+ The plan for dealing with obligations arising from labor contracts.

+ Provisions for the termination of all tasks and authorities of the Fund.

- After the dissolution plan is approved by the provincial People's Council, the provincial People's Committee will decide on the dissolution of the land development funds and send a written notice to the Ministry of Finance and publicize the dissolution on local and central mass media.

- Within 10 working days from the date the dissolution decision takes effect:

+ The land development funds is responsible for implementing the provisions in Clause 1, Article 24 of this Decree.

+ The dissolution Council is responsible for implementing the provisions in Clause 2, Article 24 of this Decree.

- The dissolution Council will automatically cease its activities once the land development funds has completed the dissolution procedures as stipulated in this Decree and other related legal provisions.

- The period for dissolving the land development funds shall not exceed 2 years from the effective date of the dissolution decision. In necessary cases based on local practical demands, the provincial People's Committee may decide to extend the dissolution period, but the maximum extension shall not exceed 1 year.

Responsibilities of the land development funds and the dissolution Council after the dissolution decision in Vietnam

In Article 24 of Decree 104/2024/ND-CP, the responsibilities of the land development funds and the dissolution Council after the dissolution decision are outlined as follows:

Responsibilities of the land development fund

- Terminate the funds applications, receipt of entrusted funds, and entrustments as stipulated in this Decree when the dissolution decision takes effect.

- Within 10 working days from the dissolution decision taking effect, the land development funds must:

+ Close accounting books; reconcile data and inventory assets; prepare financial statements up to the point when the dissolution decision takes effect.

+ Prepare a list of the Fund's deposits at the State Treasury, banks; a list of funds applications to be recovered; a list of entrusted funds and received entrustments.

+ Send a written request to the tax authority to certify the fulfillment of the Fund's tax obligations.

- Within 30 working days from the dissolution decision taking effect, the land development funds must hand over to the dissolution Council:

+ The financial statements, accounting books, and related documents concerning the Fund's dissolution; a list of the Fund's deposits at the State Treasury, banks; a list of funds applications to be recovered; a list of entrusted funds and received entrustments.

+ All assets legally owned, managed, and used by the Fund.

Responsibilities of the dissolution Council:

- Within 05 working days from the dissolution decision taking effect, the dissolution Council is responsible for:

+ Recovering the seal of the land development funds for dissolution purposes;

+ Organizing the dissolution of the land development funds as per the approved plan.

- Within 05 working days from the completion of the dissolution, the dissolution Council will report the dissolution results to the provincial People's Committee.

- The dissolution Council is allowed to use the seal of the land development funds for dissolution purposes and request the Department of Finance to lead and cooperate with relevant agencies to report to the provincial People's Committee on the plan for handling the Fund's assets after transferring to the dissolution Council.

More details can be found in Decree 104/2024/ND-CP which comes into force in Vietnam from August 1, 2024.

Decision 40/2010/QD-TTg issuing the model regulations on management and use of the land development funds in Vietnam will cease to be effective from the date Decree 104/2024/ND-CP comes into effect.

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