Vietnam: Guidelines for disposing surplus assets of the equitized enterprise

1. In case the enterprise still has state capital after the equitization:

Surplus assets:

- If the enterprise has not made the terminal statement on the official date of equitization, the surplus assets shall be recorded as an increase in state capital in the joint stock company (JSC) (if the JSC wishes to use the assets and the use of the surplus assets by the JSC is approved by the resolution of the General meeting of shareholders) or shall be transferred to the Vietnam Debt and Asset Trading Corporation (DATC) (if the JSC does not wish to use the assets).

- If the enterprise has made the terminal statement on the official date of equitization, the assets shall be transferred to the DATC.

Deficit assets after being offset against compensation (if any):

- If the enterprise has not made the terminal statement on the official date of equitization, the assets shall be aggregated with business expenses incurred over the period from the date of enterprise valuation to the official date of equitization.

- If the enterprise has made the terminal statement on the official date of equitization, the deficit assets shall be recorded as decrease in state capital in the JSC (if a resolution has been adopted by the General meeting of shareholders) or aggregated with business expenses of the JSC (if the resolution is rejected by the General meeting of shareholders).

2. In case the enterprise no longer has state capital after the equitization:

The surplus assets shall be transferred to the DATC.

The deficit assets after being offset against compensation (if any) shall be aggregated with business expenses of the JSC.

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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