Vietnam: Equitization requirements for state-owned enterprises

Bich Hoa

08:55, 13/05/2018

“Equitized enterprise” is any enterprise mentioned in Clause 2 and Clause 3 Article 2 of Decree No. 126/2017/ND-CP of Vietnam’s Government and converted into the joint stock company stated herein.

According to Decree No. 126/2017/ND-CP of Vietnam’s Government, the enterprises mentioned above may be equitized when all the following requirements are satisfied:

- Such enterprises are not on the currently effective list of wholly state-owned enterprises that is made by the Prime Minister;

- State capital is still available after settling financial issues and revaluation of such enterprises.

The State shall not provide further capital for equitization, even for enterprises over 50% shares of which have to be held by the State after under the Prime Minister's regulations.

Besides, Decree No. 126/2017/ND-CP stipulates 03 forms of equitization, specifically as follows:

- Issuing additional shares in order to increase charter capital while keeping current state capital unchanged.

- Selling part of current state capital or both selling part of state capital and issuing additional shares to increase charter capital.

- Selling the entire state capital available at the enterprise or both selling the entire state capital and issuing additional shares to increase charter capital.

More details can be found in Decree No. 126/2017/ND-CP of Vietnam’s Government, which takes effect from January 01, 2018.

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