Qualification for membership of cooperative unions in Vietnam as of July 1, 2024

Qualification for membership of cooperative unions in Vietnam as of July 1, 2024 (Internet image) 

Regarding this matter, LawNet would like to answer as follows:

On June 20, 2023, the National Assembly of Vietnam officially passed the Law on Cooperatives 2023.

Qualification for membership of cooperative unions in Vietnam as of July 1, 2024

According to Article 34 of the Law on Cooperatives 2023, the regulations on qualification for membership of cooperative unions in Vietnam are as follows:

- Members of a cooperative union include:

+ Official members that are cooperatives; and

+ Contributing members and non-contributing members that have the status of Vietnamese juridical person.

- Cooperatives and Vietnamese juridical persons must submit applications for voluntary admission, make capital contribution, and meet relevant conditions laid down in this Law and the cooperative union’s charter.

- A member of a cooperative union may also be member in other cooperative unions, unless otherwise prescribed by a cooperative union’s charter.

- In order to become an official member or contributing member of a cooperative union, a foreign-invested organization shall be required to meet:

+ Market access conditions for foreign investors laid down in the Law on investment and relevant laws;

+ Conditions for ensuring national defense and security laid down in the Law on investment.

- A cooperative union that admits foreign-invested organizations as its official members or contributing members shall be required to meet market access conditions for foreign investors laid down in the Law on investment and relevant laws.

- Total number of official members that are foreign-invested organizations must be less than 35% of total official members of a cooperative union.

Cases of termination of membership of cooperative unions in Vietnam

According to Clause 1, Clause 2 and Clause 3, Article 37 of the Law on Cooperatives 2023, cases of termination of membership of cooperative unions in Vietnam include:

- The membership of a cooperative union’s official member shall be terminated in the following cases:

+ A member ceases to exist, or is dissolved or declared bankrupt;

+ The cooperative union ceases to exist, or is dissolved or declared bankrupt;

+ A member voluntarily leaves the cooperative union;

+ A member is expelled according to the cooperative union’s charter;

+ A member has neither used products/services nor made labour contribution for a consecutive period prescribed in the cooperative union’s charter;

+ At the capital contribution time, a member fails to make capital contribution as promised or makes a capital contribution which is lower than the minimum capital contribution prescribed in the cooperative union’s charter.

- The membership of contributing members of a cooperative union shall be terminated according to Points a, b, c, d and e Clause 1 of Article 37 of the Law on Cooperatives 2023.

- The membership of a cooperative union's non-contributing member shall be terminated:

+ In the cases specified in Points a, b, c, d and dd Clause 1 of Article 37 of the Law on Cooperatives 2023; or

+ if the member fails to pay membership fees as prescribed in the cooperative union’s charter.

More details can be found in the Law on Cooperatives 2023, which takes effect on July 1, 2024, except for the provisions in Clauses 3 and 4, Article 115 of the Law on Cooperatives 2023, which takes effect on September 1, 2023.

The Law on Cooperatives 2012 expires from the effective date of the Law on Cooperatives 2023, except for the provisions in Clause 5, Article 115 of the Law on Cooperatives 2023

To Quoc Trinh

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