Who is not permitted to establish and manage enterprises in Vietnam?

Who is not entitled to establish and manage enterprises in Vietnam? - Illustrative image.

Specifically, Clause 2, Article 17 of Enterprise Law 2020 stipulates that the following organizations and individuals are not entitled to establish and manage enterprises in Vietnam:

- State agencies and units of the people's armed forces using state assets to establish enterprises for private gain;

- Officials and public employees as stipulated by the Law on Officials and the Law on Public Employees;

- Officers, non-commissioned officers, professional soldiers, defense workers, and public employees within the agencies, units of the Vietnam People's Army; officers, professional non-commissioned officers, and police workers within the agencies, units of the Vietnam People's Public Security, except those appointed as authorized representatives to manage the State’s capital contribution in enterprises or State-owned enterprises;

- Managers and operational leaders in enterprises where the State holds 100% of charter capital, except those appointed as authorized representatives to manage the State’s capital contribution in other enterprises;

- Minors; individuals with restricted legal capacity, loss of legal capacity, or difficulties in cognition and conduct control; organizations that are not legal entities;

- Individuals under criminal prosecution, in temporary detention, serving prison sentences, undergoing administrative measures at compulsory detoxification centers or compulsory education institutions, or prohibited by courts from holding certain positions, practicing specific professions, or performing specific jobs; other cases as stipulated by the Law on Bankruptcy and Anticorruption Law.

If required by the Business Registration Authority, individuals registering for business establishment must submit a judicial record card to the Business Registration Authority;

- Organizations that are commercial legal entities prohibited from business, operating in certain fields, as stipulated by the Criminal Code.

Note the cases where organizations and individuals are not entitled to contribute capital, purchase shares, or buy capital contributions in joint-stock companies, limited liability companies, and partnerships:

- State agencies, units of the people's armed forces using state assets to contribute capital to enterprises for private gain;

- Individuals prohibited from contributing capital to enterprises as stipulated by the Law on Officials, the Law on Public Employees, and the Anticorruption Law.

Additionally, Clause 4, Article 17 of the Enterprise Law 2020 specifies private gain for state agencies and units of the people's armed forces using state assets to establish businesses for private gain; state agencies, units of the people's armed forces using state assets to contribute capital to enterprises are any forms of income gained from business activities, capital contributions, share purchases, and capital contributions used for one of the following purposes:

- Distribution in any form to some or all of the officials and public employees as stipulated by the Law on Officials and the Law on Public Employees; officers, non-commissioned officers, professional soldiers, defense workers, and public employees within the agencies and units of the Vietnam People's Army; officers, professional non-commissioned officers, and police workers within the agencies, units of the Vietnam People's Public Security, except those appointed as authorized representatives to manage the State’s capital contribution in enterprises or State-owned enterprises;

- Supplementing the operational budget of the agency or unit contravening the law on state budget;

- Establishing or supplementing funds serving the private interests of the agency or unit.

For more detailed information, refer to the Enterprise Law 2020, which takes effect on January 1, 2021.

Le Vy

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