Vietnam: Principles of establishment, reorganization, and dissolution of public service providers

Vietnam: Principles of establishment, reorganization, and dissolution of public service providers (Illustrative photo)

According to Decree 120/2020/ND-CP, the establishment, reorganization, and dissolution of public service providers in Vietnam must adhere to the following principles:

- The establishment, reorganization, and dissolution of public service providers must ensure compliance with the conditions, procedures, and authority specified in Decree 120/2020/ND-CP (if there are other specific regulations by sector law, those regulations should be followed); a public service provider may offer multiple similar public services.

- Newly established public service providers (including ones under another public service provider) must self-cover their recurrent and investment expenditures (except for cases where a new establishment is required to provide basic and essential public services). When newly establishing public service providers under another public service provider self-covering recurrent and investment expenditures (including the provision of basic and essential public services), they must also self-cover their recurrent and investment expenditures.

- Public service providers that ineffectively operate must be reorganized or dissolved. The reorganization of a public service provider must not increase the number of employees receiving salaries from the state budget under the approval form the competent authority, ensure compliance with the number of deputy heads of the public service provider, and implement downsizing as per regulations.

More details can be found in Decree 120/2020/ND-CP effective from December 1, 2020.

Thuy Tram

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