Vietnam: The local development investment fund is entrusted with lending and debt recovery

According to Article 32 of the Decree No. 147/2020/NĐ-CP of the Vietnam Government, the local development investment funds are entrusted to manage investment capital; lending and debt recovery; allocating investment capital for works and projects from the state budget, policy banks, domestic and international businesses and organizations and individuals; receive entrustment management of capital sources and operations of state financial funds in the locality.

Thus, the receipt of entrustment of the local development investment fund shall comply with the decision of the People's Committee of the province or the contract of entrustment signed between the Fund and the entrusting organization or individual. The entrustment decision/contract includes the following basic contents:

- Name, address, legal status, legal representative of the entrusting party (if any) and the trustee (local development investment fund).

- Purpose of entrustment; entrusted content.

- Amount of entrusted capital; entrustment term; entrustment costs.

- Beneficiaries; responsibility for appraisal and supervision of entrustment activities; responsibility of the entrusting party for handling risks.

- Rights and obligations of the parties; handling of cases of termination of entrustment documents ahead of time; provisions on handling violations (if any).

- Other contents as agreed by the parties in accordance with the provisions of law.

Moreover, the local development investment fund is responsible for separately accounting the entrusted capital and assets formed from the entrusted capital (if any) with the Fund's operating capital and assets. Trust activities of the Fund must not affect other activities according to the functions and tasks of the Fund.

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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