Legal Counselling

Vietnam: New regulation on the rate of equity and mobilized capital of PPP investors

17:17, 15/09/2018

Recently, the Government of Vietnam has issued the Decree No. 63/2018/NĐ-CP on the investment in the form of Public-Private Partnerships, setting forth sectors, requirements, and procedures for investment in form of Public-Private Partnerships (hereinafter referred to as PPP).

According to the Decree No. 63/2018/NĐ-CP of Vietnam’s Government, investors shall be responsible for contributing the equity and mobilizing other capital to execute the project as agreed upon in the project contract. Moreover, the rate of equity shall be determined according to the following rules:

- With regard to a project funded by total investment of up to VND 1,500 billion, the equity shall account for at least 20% of such total investment;

- With regard to the project funded by total investment of more than VND 1,500 billion, the rate of equity is determined according to the following rules: the rate shall account for least 20% for the portion of equity up to VND 1,500 billion; and the rate shall account for at least 10% for the portion of equity more than VND 1,500 billion.

Note:

- The State contribution to PPP projects prescribed in Clauses 2 and 4 Article 11 of Decree No. 63/2018/NĐ-CP shall not be included in the total investment for the identification of the equity rate.

- In case of a BT contract, the investor must also meet requirements for equity (if any) in accordance with law on investment, construction, housing, real estate business and relevant law provisions to undertake Other projects.

View more details at Decree No. 63/2018/NĐ-CP of Vietnam’s Government, effective from June 19, 2018.

- Thanh Lam -

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