What are the State-owned enterprises under the law in Vietnam?

What are the State-owned enterprises under the law in Vietnam?

Pursuant to the provisions of Article 88 of the Law on Enterprises 2020, State-owned enterprises shall be limited liability companies or joint stock companies, including:

(1) Wholly state-owned enterprises (100% of charter capital of which is held by the State) 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) Partially state-owned enterprises (over 50% of charter capital or voting shares is held by the State, except the enterprises specified in Point (1) 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.

What are the State-owned enterprises under the law in Vietnam? (Internet image) 

Organizational structure of State-owned enterprises in Vietnam

Pursuant to Article 190 of the Law on Enterprises 2020, 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.

Rights and obligations of enterprises in Vietnam

Pursuant to Article 7 and Article 8 of the Law on Enterprises 2020, regulations on the rights and obligations of enterprises are as follows:

(i) Rights of enterprises

- Freely engage in any business line that is not banned by law.

- Freely run the business and choose a type of business organization; choose business lines, area of operation and type of operation; change the scale of business and business lines.

- Choose the method of mobilizing, distributing and using capital.

- Freely find markets, customers and enter into contracts.

- Export and import.

- Hire employees in accordance with employment laws.

- Apply technological advances to improve business efficiency; have intellectual property rights protected in accordance with intellectual property laws.

- Acquire, use, dispose of their assets.

- Reject unlawful requests for provision of resources from other organizations and individuals.

- File complaints and participate in proceedings as prescribed by law.

- Other rights prescribed by law.

(ii) Obligations of the enterprise

- Maintain the fulfillment of conditions for conducting restricted business lines and business lines restricted to foreign investors (hereinafter referred to as “restricted business lines”) prescribed by law throughout the course of business operation.

- Apply for enterprise registration; register changes to enterprise registration information; publish information about the establishment and operation of the enterprise; submit reports and fulfill other obligations prescribed by the Law on Enterprises 2020.

- Take responsibility for the accuracy of information in the enterprise registration application and reports; promptly rectify incorrect information if found.

- Organize accounting works; pay taxes and fulfill other financial obligations prescribed by law.

- Protect lawful rights and interests of employees as prescribed by law; do not discriminate against or insult employees; do not mistreat or force employees to work; do not employ minors against the law; enable employees to improve their vocational skills through training; buy social insurance, unemployment insurance, health insurance and other insurance for employees as prescribed by law.

- Other obligations prescribed by law.

Mai Thanh Loi

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