What is a state-owned enterprise? What are the regulations on wholly and partially state-owned enterprises in Vietnam? - Thien Phuoc (Quang Tri, Vietnam)
Article table of contents
1. What is a state-owned enterprise?
According to Clause 11 Article 4 of the Law on Enterprise 2020, a state-owned enterprise means an enterprise more than 50% charter capital or voting shares of which is held by the State as prescribed in Article 88 of the Law on Enterprise 2020.
What is a state-owned enterprise? Classification of state-owned enterprises in Vietnam (Internet image)
2. Classification of state-owned enterprises in Vietnam
Article 88 of the Law on Enterprise 2020 stipulates that specifically, state-owned enterprises shall be limited liability companies or joint stock companies, including:
- Wholly state-owned enterprises (100% of charter capital of which is held by the State)
- Partially state-owned enterprises (over 50% of charter capital or voting shares is held by the State, except the enterprises specified in Point a Clause 1 of this Article).
2.1 Wholly state-owned enterprises (100% of charter capital of which is held by the State)
Wholly state-owned enterprises include:
- Single-member limited liability companies 100% of charter capital of which is held by the State that are parent companies of state-owned corporations or parent companies in groups of parent company – subsidiary companies;
- Independent single-member limited liability companies 100% of charter capital of which is held by the State.
2.2 Partially state-owned enterprises (over 50% of charter capital or voting shares is held by the State)
Partially state-owned include:
- Multiple-member limited liability companies and joint stock companies over 50% of charter capital or voting shares of which is held by the State that are parent companies of state-owned corporations or parent companies in groups of parent company – subsidiary companies;
- Independent multiple-member limited liability companies and joint stock companies over 50% of charter capital or voting shares of which is held by the State.
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Note: According to Article 7 of Decree 47/2021/ND-CP, the state-owned enterprises and determination of ratio of charter capital or total voting shares held by the State in enterprises is prescribed as follows: - The parent company prescribed in Point a Clause 2 and Point a Clause 3 Article 88 of the Law on Enterprises must not be a subsidiary company in a another business group, corporation or group of parent company - subsidiary companies. - The ratio of charter capital or total voting shares held by the State in an enterprise means the total ratio of charter capital or voting shares held by the state ownership representative bodies in that enterprise. - An independent company mentioned in Article 88 of the Law on Enterprises is a joint stock company or limited liability company whose charter capital or total voting shares are held by the State and does not belong to any group of parent company - subsidiary companies |
3. Organizational structure of state-owned enterprises in Vietnam
Article 90 of the Law on Enterprise 2020 stipulates that the state ownership representative body shall decide whether to apply one of the two models below to organize the state-owned enterprise as a single-member limited liability company:
- A company with a President, Director/General Director and Board of Controllers;
- A company with a Board of Members, Director/General Director and Board of Controllers.
4. Regulations on periodic disclosure of information in Vietnam
Periodic information disclosure of state-owned enterprises is based on the provisions of Article 109 of the Law on Enterprise 2020 (amended by Law No. 03/2022/QH15). Whereby:
- The information shall be periodically posted on the websites of the company and the state ownership representative body:
+ Basic information about the company and the company's charter;
+ Overall targets and specific targets in the annual business plan;
+ The annual financial statement audited by an independent audit organization within 150 days after the end of the fiscal year and its summary (including the financial statement of the parent company and the consolidated financial statement (if any);
+ The mid-year financial statement, including the financial statement of the parent company and the consolidated financial statement (if any); these documents must be disclosed before July 31;
+ Reports on implementation of annual business plans;
+ Reports on performance of public duties that are assigned or bid for (if any) and other social responsibilities;
+ The report on the company’s management and organizational structure.
- The report on the company’s management and organizational structure shall contain the following information:
+ Information about the state ownership representative body, its head and deputies;
+ Information about the company’s executives, their qualifications and experience, managerial position previously held, how they are designated, their managerial tasks; their salaries, bonuses, benefits and payment method, their related persons and interests;
+ Relevant decisions of the state ownership representative body; resolutions and decisions of the Board of Members of the company’s President;
+ Information about the Board of Controllers, Controllers and their activities;
+ Verdicts of inspecting authorities (if any) and reports of the Controllers and the Board of Controllers;
+ Information about the company’s related persons; contracts and transactions between the company and its related persons;
+ Other information prescribed by the company’s charter.
- Information shall be fully, accurately and punctually disclosed as prescribed by law.
- Information shall be disclosed by the legal representative or the person authorized to disclose information. The legal representative shall be responsible for the adequacy, punctuality and accuracy of the information disclosed.
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