Vietnam: 04 forms of investment of the local investment and development fund from February 05, 2021

According to the Decree No. 147/2020/NĐ-CP of the Vietnam Government, the use of capital and assets of the local development investment fund for investment must comply with the provisions of this Decree and do not fall within the scope of public investment. In addition to the provisions of this Decree, the Fund's investment activities must comply with the provisions of the law on investment, the law on land and other relevant laws.

Thus, the local development investment funds select investment forms in accordance with the law on investment of Vietnam, including:

First: Investment in establishment of a business organization.

Second: Investment in the form of capital contribution or purchase of shares or stakes.

Third: Execution of an investment project or investment in the form of a business cooperation contract.

Fourth: Other forms of investment as prescribed by the law on investment.

On the other hand, the local development investment funds may not invest in the following cases:

- Contributing capital, buying shares, buying the entire enterprise, performing business cooperation contracts with an enterprise in which the manager or representative at that enterprise is a spouse, biological father, adoptive father, biological mother, adoptive mother, biological child, adopted child, biological brother, biological sister, younger brother, brother-in-law, sister-in-law of the manager of the local development investment fund.

- Contribute capital with subsidiaries to invest in the establishment of economic organizations or invest in the form of contracts.

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

Ty Na

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