Decree No. 32/2018/NĐ-CP of Vietnam’s Government effective from May 01, 2018 has regulated several new points on state capital investment in enterprises, use and management of capital and assets in enterprises, of which there are 10 featured new points listed below:
Article table of contents
1. Expand the scope of state capital investment for establishment of state enterprises
Decree No. 32/2018/NĐ-CP of Vietnam’s Government has supplemented 02 fields in which the State may invest capital for establishment of state enterprises, including:
- Air traffic, aeronautical information, emergency rescue and response services;
- Maritime safety services (exclusive of dredging and maintenance of public navigable channels).
2. Enterprises shall not be obliged to request a competent authority to provide supplementary chartered capital
Specifically, after accounting for increase in owner’s equity capital, enterprises shall report to the owner’s representative entity to seek its decision on adjustment to the actual contributed capital amount specified in the enterprise registration certificate.
3. Tighten the fields and activities of additional state capital
Decree No. 32/2018/NĐ-CP has limited the scope of additional state capital in some fields of minerals, agriculture - forestry - fishery, etc. and eliminated some fields such as: electricity distribution, seaport exploitation, etc.
4. Specify the case where state enterprises shall make a decreasing adjustment to the chartered capital amount
According to Decree No. 32/2018/NĐ-CP, if state enterprises make a decreasing adjustment to the chartered capital amount, enterprise owners' representative entities shall report to the Prime Minister on the decision on treatment of decreased chartered capital value.
5. The Board of Members or the Chairperson of a state enterprise shall decide on each contract for leasing, mortgaging and pledging of an asset of which the value is restricted to under 50% of the equity
This is a new regulation on authority to decide on leasing, mortgaging and pledging of an asset in state enterprises.
6. Where state enterprises do not continue projects, they may assign these projects to other investors
This content is supplemented in regulations on disposal, transfer or sale of fixed assets.
7. Revenues earned from outward investments of a state enterprise which are accounted for as other revenue of that enterprise
In addition to the amounts collected from after-tax profits and margins between the equity and the charter capital of subsidiary company, other revenue of that enterprise include:
- Profits and dividends distributed by using proceeds from investment of capital in joint-stock companies and multiple-member limited liability companies;
- Investment made under BCC contracts;
- Proceeds from dissolution and bankruptcy of enterprises that have capital contributed by state enterprises and proceeds from other outward investments.
8. Additionally regulate principles of and authority to decide transfer of outward investment of state enterprises
Based on the approval of the investment capital portfolio of the owner's representative agency, the Board of Members or the Company President decides on the capital transfer plan.
9. Profits of state enterprises after deductions are no longer required to be deducted from special funds according to the Prime Minister's decision
This content was annulled by Decree No. 32/2018/NĐ-CP.
10. Supplement regulations on transfer of state capital invested in joint stock companies or multiple-member limited liability companies
Approach to transfer of state capital includes: employing open auction, competitive bidding and agreement methods.
View detailed approach to transfer of state capital at Decree No. 32/2018/NĐ-CP of Vietnam’s Government.
- Key word:
- Decree No. 32/2018/NĐ-CP
- state enterprises
