The total disbursed value of investments in the form of contracts shall not exceed 50% of the equity of the local investment and development fund in Vietnam

According to the Decree No. 147/2020/NĐ-CP of the Vietnam Government, investment limits for investments in establishing economic organizations, capital contributions, buying shares or contributed capital of economic organizations, or investing in the form of contracts of the local development investment fund are stipulated as follows:

- The total disbursed value of investments in the establishment of economic organizations, investments in capital contribution, purchase of shares, and capital contributions of economic organizations shall not exceed 20% of the Fund's equity as recorded in the latest financial statements at the time of disbursement of investment capital.

- The total disbursed value of investments in the form of contracts shall not exceed 50% of the Fund’s equity as recorded in the latest financial statement at the time of disbursement of investment capital.

- For projects using support capital from international donors with regulations on investment limits different from those of this Decree, the agreement signed with the donor shall be followed.

In particular, the investment in the establishment of an economic organization, capital contribution, purchase of shares or contributed capital of an economic organization or investment in the form of a contract of a local development investment fund must satisfy the following requirements:

- As for investment in the establishment of an economic organization, investment in capital contribution, purchase of shares or capital contribution of an economic organization:

+ The plan for investment, capital contribution, share purchase and capital contribution is evaluated as effective and capable of recovering investment capital.

+ Invested and capital contributed economic organizations have their main business lines on the list of investment and lending sectors of the Fund promulgated by the People's Committee of the province in accordance with the provisions of Article 16 of the Decree No. 147/2020/NĐ-CP of the Vietnam Government.

- As for investment in the form of contract:

+ The project is evaluated as effective and has the ability to recover investment capital.

+ Projects on the list of investment and lending sectors of the Fund are promulgated by the People's Committee of the province according to the provisions of Article 16 of the Decree No. 147/2020/NĐ-CP of the Vietnam Government.

+ The project complies with the provisions of the law on investment.

More details at the Decree No. 147/2020/NĐ-CP of the Vietnam Government, effective from February 05, 2021.

Ty Na

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE