Vietnam: Measures to preserve capital safety of the local investment and development fund

According to the Decree No. 147/2020/NĐ-CP of the Vietnam Government, the local investment and development fund is responsible for preserving and using capital for the right purposes, ensuring safety of capital and assets as prescribed in this Decree; report to the People's Committee of the province on the change in equity of the fund. Capital preservation is carried out by the following measures:

- Manage and use capital, assets, distribution of revenue and expenditure differences, financial management regime, accounting and auditing regime according to the provisions of this Decree and the guidance of the Ministry of Finance of Vietnam.

- Make provision for risks for lending activities according to the provisions of Article 30 of this Decree and make other provisions according to regulations for enterprises. Provision expenses are accounted into the operating expenses of the local development investment fund.

- Buy property insurance as prescribed by law.

- Other measures to preserve capital as prescribed by law for enterprises in which 100% of charter capital is held by the State.

Moreover, based on the 5-year operation plan approved by the People's Committee of the province, the local investment and development fund shall draw up the annual operation plan and financial plan for the Fund Management Council to submit to the People's Committee of the province for consideration and approval. Annual financial plan includes: income plan, expense plan, fixed asset procurement plan.

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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