Vietnam: The process of establishing a new local development investment fund from February 05, 2021

According to Article 7 of the Decree No. 147/2020/NĐ-CP of the Vietnam Government, the process of establishing a new local development investment fund by central-affiliated cities and provinces is as following:

(1) When there is a need to establish a local development investment fund, the provincial-level People's Committees shall elaborate a scheme on the establishment of the fund and submit it to the provincial-level People's Councils for approval. The project of establishing the Fund includes the following basic contents:

- Objectives, necessity and feasibility of the establishment of the Fund, investment needs of socio-economic projects in the locality, scale, scope, content of activities and impacts of the establishment of the Fund to the local socio-economic development.

- The proposed charter capital allocation plan of the Fund ensures the actual level of charter capital available at the time of establishment as prescribed in Clause 1 Article 6 of the Decree No. 147/2020/NĐ-CP. When using state budget capital to provide charter capital for the Fund, the scheme must clearly state the amount and allocation of capital sources in the local medium-term public investment plan.

- The plan and the source of operating capital of the local development investment fund, in which the Fund's ability to raise capital is expected within 3 years from the time of its establishment.

- The draft charter for organization and operation of the local development investment fund is consistent with the provisions of Article 8 of the Decree No. 147/2020/NĐ-CP.

- Explain in detail the organizational structure and operational apparatus of the Fund.

- The expected list of personnel includes: Chairman, Vice Chairman and members of the Fund Management Council, Supervisory Board, Director and other key personnel of the Fund who meet the standards and conditions as prescribed at the Decree No. 147/2020/NĐ-CP.

- The mode of organization and administration of the Fund shall comply with the provisions of Clause 1 Article 14 of the Decree No. 147/2020/NĐ-CP.

- Estimated operational and financial plan of the local development investment fund within 3 years after its establishment, together with the list of projects to be loaned, invested and socio-economic efficiency.

(2) Provincial-level People's Councils shall consider and approve the project on establishing a local development investment fund.

(3) Provincial-level People's Committees shall issue decisions on establishment on the basis of the project on establishing a local development investment fund approved by the provincial-level People's Council; and send a written notice to the Ministry of Finance of Vietnam about the establishment of the Fund.

(4) Provincial-level People's Committees are responsible to fully allocate charter capital to local development investment funds as prescribed in Clause 1 Article 6 of the Decree No. 147/2020/NĐ-CP.

(5) Within 30 days from the date of issuance of the Decision on establishment of the local development investment fund, the Fund is responsible for publicly announcing the establishment of the Fund on the mass media.

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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