Cases of social enterprises having to refund all aid and sponsorship received in Vietnam

Cases of social enterprises having to refund all aid and sponsorship received in Vietnam

Specifically, Decree 47/2021/ND-CP stipulates that the social enterprise shall return all incentives, aids and sponsorships it received to pursue social and environmental objectives if it fails to fulfill the commitment to pursue social and environmental objectives and maintain retained earnings for re-investment (except for the case of termination of social and environmental goals before committed period).

In addition, Social enterprises may receive foreign non-governmental aids to pursue their social and environmental objectives in accordance with regulations of law on receiving foreign non-governmental aids. Social enterprises may receive sponsorships in the form of property, finance or technical assistance to pursue their social and environmental objectives from domestic organizations and individuals and foreign organizations that have registered their operation in Vietnam as follows:

- The enterprise shall prepare a document about receipt of sponsorship which specifies: information about the sponsors, types of property, value of property or money, time of sponsorship; requirements to be satisfied by the recipient; full name and signature of the sponsor’s representative (if any).

- Within 10 working days from the receipt of the sponsorship, the enterprise shall send a notification to the authority in charge of management of aids and sponsorships affiliated to the People’s Committee of the province where the enterprise is headquartered. The notification shall be enclosed with a copy of the document about receipt of sponsorship.

Thus, according to the above regulations, social enterprises are allowed to receive aid and funding, however, social enterprises must maintain social and environmental goals, retained profits for reinvestment and other internal content in the Commitment to realize social and environmental goals throughout the operation process, otherwise, if not wanting to return all the incentives, aid and sponsorship that the social enterprise has received.

In fact, this content was previously also stipulated in Decree 96/2015/ND-CP (which expires on April 1, 2021) and continues to be recognized in Decree 47/2021/ND. - CP. In addition, Decree 47 also added a case where the responsibility for refunding all incentives, aid and sponsorships received by social enterprises compared to Decree 95 was excluded, specifically the school. In case a social enterprise terminates its social and environmental goals before the committed time limit.

For more details, see Decree 47/2021/ND-CP, effective from April 1, 2021.

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