Conditions for the National Technology Innovation Foundation to lend directly in Vietnam

Conditions for the National Technology Innovation Foundation to lend directly in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. Direct lending of the National Technology Innovation Foundation in Vietnam

According to Clause 1, Article 14 of the Charter issued together with Decision 04/2021/QD-TTg, enterprises executing the following projects:

- Transfer, innovation and improvement of technologies receiving transfer incentives as provided in the Law on Technology Transfer;

- Technology transfer, new product development and product commercialization in the high-technology agriculture and industry sectors approved by the Prime Minister;

- Technological innovation, production of industrial products on the list of supporting industrial products prioritized for development approved by the Prime Minister;

- Implementation of technology transfer contracts signed at technology exchanges, technology and equipment markets, technology supply-demand connection events and national startup festivals;

- Innovation and improvement of technologies, development of new products, production expansion for innovative startups and science and technology enterprises in accordance with the laws on science and technology;

- Technology innovation activities for enterprises that win the National Quality Award, enterprises participating in the Production and Quality Improvement Program;

- Receipt, transfer, innovation and improvement of technologies and especially commercialization of technologies after being developed in the National Product Program, the National Technology Innovation Program, the National Program for High Technology Development and other national-level science and technology programs.

2. Conditions for the National Technology Innovation Foundation to lend directly in Vietnam

Specifically, in Clause 2, Article 14 of the Charter issued together with Decision 04/2021/QD-TTg, the requirements for the National Technology Innovation Foundation to lend directly are specified as follows:

- Loan applicants must be classified as qualified borrowers referred to in Section 1;

- Having the project of which objectives, contents and products meet the Foundation's operating purposes as prescribed in Article 3 of this Charter;

- The project must be approved by the competent authority in accordance with laws, verified and evaluated by the Foundation as a feasible project capable of repaying the loan;

- The enterprise applying for a loan is established in accordance with laws, has sufficient resources to implement projects and ensures that the equity participation makes up at least 20% of total investment capital in order for its project to be executed;

- Having financial capability to repay debts and meeting regulations on loan security under the provisions of this Decision and relevant laws;

- At the time of application for a loan, the enterprise has no bad debts to credit institutions and outstanding tax liabilities for a period of 1 year or more in accordance with the Law on Tax Administration.

In case of outstanding tax debts incurred due to objective reasons, the enterprise must obtain certification of this situation from the directly supervisory tax authority;

- The currency unit used for lending and debt repayment transactions must be Vietnamese dong.

3. Duties and powers of the Foundation in Vietnam

Duties and powers of the Foundation include:

- Receiving, handling and using funds derived from the state budget, lawful sources of funding, voluntary contributions from domestic and foreign enterprises, organizations and individuals.

- Formulating the Foundation's annual development strategies, action plans, medium-term plans; adopting specific regulations for the Foundation's operations.

- Taking charge of nominating tasks and projects that qualify for the Foundation's financial support. Developing regulations on financial support and deciding the rate of financial support in a transparent manner; conducting financial appraisal; inspecting and controlling the process of implementing tasks and projects, and conducting the review of the results of execution of tasks and projects funded by the Foundation.

- Suspending the financial support or recovering the offered funds when establishing that enterprises, organizations or individuals performing the tasks and/or projects violate the regulations on the use of funds granted by the Foundation; handling complaints; initiating lawsuits against enterprises, organizations and individuals that violate contracts and agreements with the Foundation in accordance with the law.

- Managing and using capital and assets assigned by the State and other resources prescribed in this Charter and laws.

- The Foundation’s operations shall be subject to regulations laid down herein.

The Foundation may apply the financial, wage and public asset management mechanism like a single-member limited liability company whose charter capital is wholly owned by the State in accordance with laws.

- Cooperating with foreign entities, individuals and international organizations on issues related to the Foundation’s functions and duties in accordance with the law.

- Using the Foundation's idle funds as deposits at commercial banks.

- Offering funds assigned by the Prime Minister or the Minister of Science and Technology to the Foundation for tasks performed by enterprises, organizations or individuals through science and technology programs and objectives by conforming to the principles that the State budget does not provide funding for national science and technology programs or tasks that are funded by the Foundation at the same time.

(Article 5 Charter issued together with Decision 04/2021/QD-TTg)

Thanh Rin

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