Vietnam: Expenses for equitization of state-owned enterprises

According to Decree No. 126/2017/ND-CP of Vietnam’s Government, the representative authority shall make the estimate and statement of equitization expenses.

Equitization expenses shall ensure the availability of all suitable and valid documentation and cost-effectiveness. Equitization expenses consist of:

Firstly, direct costs of the enterprise:

- Cost of providing professional training in enterprise equitization;

- Cost of stocktaking and determination of asset values;

- Cost of making the equitization plan and developing the charter;

- Cost of organizing the labor conference to implement equitization;

- Cost of communications and publishing information about the enterprise;

- Cost of hiring financial statement audit on the official date of equitization;

- Cost of share offering;

- Cost of holding the first General meeting of shareholders.

Secondly, costs of hiring an auditing or consulting firm (including the organization providing consulting services to determine enterprise value, determine the starting price, develop the equitization plan or offer shares) decided by the representative authority or the steering committee (if authorized).

The payment for the costs of hiring the consulting firm shall be made according to agreements concluded by relevant parties.

Thirdly, salary for the steering committee and the assistance team:

- The salary for each member of the steering committee and the assistance team shall not exceed twice as much as the statutory pay rate for officials, public employees and arm forces issued by the Government in each period.

- The time limit for paying salary to each member of the steering committee or the assistance team shall be 24 months from the day on which the steering committee or the assistance team is established.

Fourthly, other expenses related to enterprise equitization.

The cost of hiring financial statement audit on the date of enterprise valuation is not considered one of the equitization expenses and shall be aggregated with business expenses of the enterprise in the current period.

Equitization expenses shall be taken from the revenue earned from the offering of shares stated in Article 39 of Decree No. 126/2017/ND-CP.

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