Vietnam: Supplementing equitization condition of wholly state-owned enterprises

Duc Thao

16:36, 08/12/2020

Recently, the Government of Vietnam has issued the Decree No. 140/2020/NĐ-CP on amendments to the Decree No. 126/2017/NĐ-CP on conversion from State-owned enterprises and single-member limited liability companies with 100% of charter capital invested by state-owned enterprises into joint-stock companies.

According to the Decree No. 140/2020/NĐ-CP of Vietnam’s Government, equitization conditions of wholly state-owned enterprises have been supplemented compared to CArticle 4 of the Decree No. 126/2017/NĐ-CP. Specifically, the enterprises prescribed in Clause 2 and Clause 3 Article 2 of the Decree No. 126/2017/NĐ-CP may carry out equitization when meeting the following conditions:

- It is not an enterprise 100% of charter capital of which is held by the State. The list of enterprises 100% of charter capital of which is held by the State shall be announced by the Prime Minister in each period;

- The enterprise's actual value upon completion of financial settlement and enterprise revaluation as prescribed in Chapter II and Chapter III hereof is equal to or greater than its payables;

- If an enterprise is subject to the rearrangement or settlement of house, land in accordance with regulations of the law on management and use of public property, the plan for rearrangement or settlement of house, land approved by a competent authority as prescribed in the law on management and use of public property must be available. (new condition supplemented by Decree No. 140/2020/NĐ-CP)

View more details at the Decree No. 140/2020/NĐ-CP of Vietnam’s Government, effective from November 30, 2020.

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