Subjects of and conditions for loans from the Local Development Investment Funds in Vietnam

11:39, 05/09/2007

Recently, the Government of Vietnam issued Decree 138/2007/ND-CP on the organization and operation of local development investment funds.

Subjects of and conditions for loans from the Local Development Investment Funds in Vietnam (Internet image)

Decree 138/2007/ND-CP stipulates that loan-eligible objects are infrastructure investment projects with direct retrieval capital plans under programs or objectives according to socio-economic development strategies or plans approved by provincial-level Peoples Councils, including:

- Projects in the domains of communications; water supply; dwelling houses in urban centers and residential areas; relocation and reorganization of production establishments; and treatment of urban wastes;

- Important projects as decided by provincial-level Peoples Committees.

At the same time, a local Development Investment Fund in Vietnam shall only provide loans to an investor that fully meets the following conditions:

1. Having completely carried out investment procedures in accordance with law;

2. Having a profitable production and business plan and a plan to secure the payment of debts;

3. Committing to buy insurance for loan-formed assets subject to compulsory insurance at an insurance company licensed to operate in Vietnam;

4. Being an organization having the legal person status or an enterprise of any economic sector.

More details can be found in Decree 138/2007/ND-CP which comes into force from September 19, 2007.

Ty Na

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