RESTRUCTURING OF STATE CAPITAL IN ENTERPRISES

This Decree elaborates the restructuring of state capital in enterprises as prescribed in clause 1 Article 29, clauses 2, 3, 4 and 5 Article 30, clause 6 Article 31, point c clauses 1 and 2 Article 32, point c clauses 1, 2 and 3 Article 33, point d clause 1 Article 34 of the Law on Management and Investment of State Capital in Enterprises.

1. Owner’s representative agencies, direct state owner’s representatives.

2. State-owned enterprises as defined in the Law on Enterprises, as amended or replaced from time to time, and credit institutions over 50% of charter capital of which is held by the State as prescribed by the Law on Credit Institutions, excluding policy banks.

3. Representatives for state capital invested in joint-stock companies and multi-member limited liability companies.

4. Other authorities, organizations and individuals involved in the restructuring of state capital in enterprises.

For the purpose of this Decree, the terms below are construed as follows:

1. “Equitization” means the reorganization of an enterprise in the form of conversion of its business type from a wholly state-owned single-member limited liability company (of which 100% charter capital is held by the State) into a joint-stock company.

2. “Date of equitization decision” means the date on which the competent authority issues the decision on equitization of the enterprise.

3. “Date of enterprise valuation” means the date determined by the owner’s representative agency in conformity with the employed enterprise valuation method. Where the asset-based method is adopted, the date of enterprise valuation shall be the closing date of the accounting book to make the latest quarterly or annual financial statements after the date of equitization decision.

4. “Date of announcement of the enterprise value” means the date on which the owner’s representative agency issues a decision announcing the value of the equitized enterprise.

5. “Date of conversion into a joint-stock company” means the date on which the equitized enterprise is issued with an enterprise registration certificate or establishment license in accordance with regulations of law on credit institutions (hereinafter referred to as “enterprise registration certificate”) for the first time to operate in the form of a joint-stock company.

6. “Auction of shares” means a public offering of shares of an equitized enterprise to eligible entities through a competitive bidding process.

7. “Auction organization” means a Stock Exchange, securities company, or property auction service center or property auction enterprise, as prescribed by the law on property auction, that is selected according to the decision issued by the owner’s representative agency.

8. “Starting price” means the initial price of a share offered to the public for the purpose of equitization, as determined by the owner’s representative agency, provided that such price shall not be lower than its face value (VND 10.000). The starting price shall be determined by a consulting firm so as to fully reflect the actual value of the state capital in the enterprise as re-determined and announced by a competent authority while taking into account the enterprise’s future development potential.

9. “Grade-I enterprise” means a wholly state-owned single-member limited liability company.

10. “Grade-II enterprise” means a single-member limited liability company 100% of the charter capital of which is invested by a state-owned enterprise.

1. Where the Law on credit institutions and this Decree provide different regulations on the same matter, the restructuring of state capital in credit institutions shall comply with the Law on credit institutions.

2. Where the Government decides the restructuring of state capital in an enterprise to serve such purposes as national defense, security, or socio-economic development objectives in each period under a separate plan, such restructuring shall be carried out in accordance with the plan approved by the Government.

3. Political organizations, Vietnamese Fatherland Front and its member organizations may apply the provisions of the Law on Management and Investment of State Capital in Enterprises and the provisions of this Decree to formulation and promulgation of regulations on competence, order and procedures for organizing the restructuring of their capital in enterprises in accordance with law with respect to enterprises of which they are the owners, and for organizing the supervision and inspection of the implementation of the promulgated regulations, ensuring conformity with practical circumstances and conditions, and guaranteeing publicity, transparency, efficiency, and prevention of loss and waste.

4. Enterprises operating in sectors or fields with specific operational mechanisms or financial management mechanisms shall, in addition to complying with the provisions of this Decree, comply with the Government’s separate regulations on such specific characteristics. If there is any inconsistency between such Government’s regulations and this Decree, the former shall prevail.

1. The equitization of a wholly state-owned enterprise shall be carried out in association with the objective of enhancing business efficiency, operational and production capacity, and competitiveness of the enterprise.

2. Enterprises undergoing equitization are Grade-I enterprises to be converted into joint-stock companies, including:

a) Parent companies of economic groups, parent companies of state corporations;

b) Parent companies within parent company – subsidiary groups;

c) Wholly state-owned independent single-member limited liability companies.

1. An enterprise specified in Article 5 of this Decree may undergo the process of equitization when meeting the following conditions:

a) It is not classified as an enterprise 100% of the charter capital of which should be held by the State;

b) The enterprise's actual value upon completion of financial settlement and enterprise valuation as prescribed in Section 2 and Section 3 Chapter II of this Decree is equal to or greater than its total liabilities.

2. Where, upon completion of financial settlement and enterprise revaluation as prescribed in Section 2 and Section 3 Chapter II of this Decree, the enterprise’s actual value is lower than its total liabilities, the owner’s representative agency shall direct the enterprise to continue cooperating with Vietnam Debt and Asset Trading Corporation (DATC) and the enterprise’s creditors to formulate a debt sale and settlement plan for enterprise restructuring so as to satisfy the equitization conditions. Where such debt sale and settlement plan for enterprise restructuring is considered infeasible, other forms of conversion shall be adopted in accordance with regulations of law.

1. Issuing additional shares in order to increase charter capital while keeping existing state capital in the enterprise unchanged.

2. Selling a portion of the existing state capital in the enterprise; or combining the partial sale of state capital with the issuance of additional shares to increase charter capital.

3. Selling the entire existing state capital in the enterprise; or combining the sale of the entire state capital with the issuance of additional shares to increase charter capital.

1. Domestic investors are entitled to purchase an unlimited quantity of shares of an equitized enterprise, except the cases prescribed in clause 4 of this Article.

2. Foreign investors are entitled to purchase shares of an equitized enterprise in accordance with the provisions of this Decree and relevant legislative documents.

Foreign investors that wish to purchase shares shall be required to open accounts at credit institutions in accordance with regulations of law of Vietnam on foreign exchange.

Foreign investors may make deposits or escrow deposits in foreign currencies by bank transfer when participating in an auction for the purchase of shares or stakes of wholly state-owned enterprises in accordance with the Vietnam’s law on foreign exchange and guidelines given by the State Bank of Vietnam (SBV).

3. Strategic investors:

a) A strategic investor may be a domestic or foreign investor that:

a1) Has the status of a juridical person as prescribed in laws;

a2) Has adequate financial capacity (including having a profitable business for the 02 consecutive years immediately preceding the time of subscribing for shares, and having no accumulated losses); has appropriate corporate governance capacity and technological capability, and has operated for at least 03 years in the sectors or fields of the equitized enterprise;

a3) Meets other criteria as decided by the owner’s representative agency, in line with the post-equitization business strategies and orientations of the enterprise;

a4) Has a written commitment made by a competent person when registering to become a strategic investor of the equitized enterprise that:

The primary business line and the brand of the equitized enterprise will be maintained for at least 03 years from the date of officially becoming a strategic investor.

The purchased shares will not be transferred within 03 years from the date on which the joint-stock company is issued with the initial certificate of registration of joint-stock company in accordance with the Law on Enterprises.

There is a plan to support the enterprise after equitization in relation to the transfer of new technologies; human resource training; improvement of financial capacity; corporate governance; supply of raw materials; and development of product markets.

Compensation shall be paid for damage arising from any breach of the commitments, and in such case, the total number of shares purchased by the strategic investor shall be subject to the State’s right of disposal.

b) The initial offering of shares to strategic investors shall only apply to enterprises included in the list of enterprises over 50% of total shares of which has to be held by the State upon equitization, as decided by the competent authority.

c) Based on the scale of charter capital, the nature of business lines, and the requirements for enterprise expansion and development, the Equitization Steering Board (hereinafter referred to as the “Steering Board”) shall request the authority competent to approve the equitization plan to consider issuing a decision on whether to conduct initial offering of shares to strategic investors. Where an initial offering of shares to strategic investors is conducted, the authority competent to approve the equitization plan shall determine the criteria for selection of strategic investors and the percentage of shares to be sold to such strategic investors in the equitization plan.

Procedures for selecting strategic investors of an equitized enterprise shall be followed with the specific steps set out in Appendix I enclosed herewith, ensuring that the selection of strategic investors and share subscription shall be completed before the date of disclosure of information on the initial public offering (IPO);

d) If there is only one strategic investor that meets selection criteria and subscribes for shares, and the number of subscribed shares is smaller than or equal to the number of shares to be offered to strategic investors under the approved equitization plan, the Steering Board shall request the owner’s representative agency to make the decision on offering of shares to such strategic investor by way of direct negotiation, provided that the selling price shall not be lower than the average successful bid as determined based on the public auction results; where shares are offered to other investors as prescribed in clause 4 Article 38 of this Decree, the selling price negotiated with the strategic investor shall not be lower than the price agreed upon with the investor purchasing shares.

The Steering Board shall request the owner’s representative agency to make a decision on modification of the equitization plan to convert the remaining shares (i.e. the difference between the number of shares to be offered to strategic investors specified in the approved equitization plan and the number of shares subscribed by the strategic investor) into shares to be sold through a public auction;

dd) If there are at least two strategic investors that meet selection criteria and subscribe for shares, and the total number of shares subscribed by strategic investors is greater than the number of shares to be offered to strategic investors under the approved equitization plan, the Steering Board shall request the owner’s representative agency to consider holding an auction among such strategic investors on the stock exchange.

The auction among strategic investors shall be conducted after the public auction has been completed, with the starting price equal to the average successful bid of the public auction (in case shares are offered to other investors as prescribed in clause 4 Article 38 of this Decree, the starting price for the auction among strategic investors shall be the selling price agreed upon with the investor purchasing shares). Shares will be sold to strategic investors in descending order of their bids until the entire quantity of shares to be sold is fully allocated;

e) If there are at least two strategic investors that meet selection criteria and subscribe for shares, and the total number of subscribed shares is smaller than or equal to the number of shares to be offered to strategic investors under the approved equitization plan, the Steering Board shall reach an agreement on the number of shares to be offered to each strategic investor and the selling price thereof, and send a report thereon to the owner’s representative agency for approval; the number of shares offered to each strategic investor shall be the quantity of shares subscribed by that investor, provided that the selling price shall not be lower than the average successful bid as determined based on the public auction results (in case shares are offered to other investors specified in clause 4 Article 38 of this Decree, the selling price negotiated with a strategic investors shall not be lower than the price agreed upon with the investor purchasing shares).

The Steering Board shall request the owner’s representative agency to make a decision on modification of the equitization plan to convert the remaining shares (i.e. the difference between the number of shares to be offered to strategic investors specified in the approved equitization plan and total number of shares subscribed by strategic investors) into shares to be sold through a public auction;

g) The strategic investor that fails to fulfill its commitments or violates regulations on transfer of shares shall pay compensation for any damage incurred in accordance with the commitment and regulations of law in force;

h) The strategic investor has to pay a deposit or escrow deposit or obtain a guarantee from a credit institution or foreign bank branch, amounting to 20% of the value of the shares subscribed at the starting price approved by the competent authority and specified in the approved equitization plan.

The strategic investor renouncing the right to purchase shares shall forfeit the paid deposit or incur a fine equal to the deposited amount in case of a deposit or guarantee;

i) Offering of shares to strategic investors must be completed before the first General Meeting of Shareholders (GMS) is held to convert the enterprise into a joint-stock company.

Regarding the remaining shares (i.e. difference between the number of shares actually offered to strategic investors and the total number of shares subscribed by strategic investors under the approved equitization plan), the Steering Board shall request the owner’s representative agency to issue a decision on adjustment of the charter capital and its structure before the first GMS is held.

4. The following organizations and individuals are not allowed to purchase initially issued shares of the equitized enterprise:

a) Members of the Steering Board and Assisting Team (unless they are representatives of the enterprise);

b) Financial intermediaries and employees or executives thereof engaging in provision of equitization consultancy services or financial statement auditing, and the audit firm in charge of enterprise valuation;

c) Subsidiaries and associate companies in the same group, corporation or conglomerate;

d) Auction organizations and employees and executives thereof involved in the auction process;

dd) The related persons as prescribed in Clause 23 Article 4 of the Law on Enterprises, of the organizations and individuals specified in points a, b and d of this clause.

1. Domestic and foreign investors shall purchase shares of the enterprise in VND.

2. The initial offering of shares shall be carried out by the ways of public auction and direct negotiation.

3. Depending on eligible buyers and conditions for purchasing shares from the initial offering, the owner’s representative agency shall decide to adopt an appropriate offering method as prescribed in clause 2 this Article.

1. The owner’s representative agency shall consider approving the estimate and final settlement of equitization costs. The General Director (or Director) of the equitized enterprise shall decide specific cost levels according to the contents approved by the owner’s representative agency and take legal responsibility for such decision. Equitization costs must be supported by valid and lawful documents, and comply with the principles of economy and efficiency as prescribed by law.

2. Equitization costs consist of:

a) Direct costs of the enterprise, including:

a1) Costs of providing professional training in enterprise equitization;

a2) Costs of conducting asset inventory and valuation;

a3) Costs of preparing the equitization plan and the enterprise’s Charter;

a4) Costs of organizing the employees’ meeting for the implementation of equitization;

a5) Costs of communication activities and disclosure of information about the enterprise;

a6) Costs of auditing the financial statements as of the date of enterprise valuation where such date does not coincide with the end of the fiscal year; costs of auditing the financial statements as of the official date of conversion into a joint-stock company;

a7) Costs of organizing the share offering;

a8) Costs of holding the first GMS.

b) Costs of engaging audit firms and consulting firms to provide consultancy services for enterprise valuation, determination of the starting price, formulation of the equitization plan, share offering, and preparation of equitization final settlement documentation. Payments to consulting firms shall be made according to terms and conditions of the consultancy contracts signed between the relevant parties.

c) Remunerations of the Steering Board and the Assisting Team, including:

c1) The monthly remuneration paid to each member of the Steering Board and the Assisting Team shall not exceed twice as much as the reference pay rate for officials, public employees and members of the armed forces as prescribed by the Government from time to time.

c2) Remuneration shall be paid to each member of the Steering Board and the Assisting Team based on the actual period of service, but for no more than 24 months from the date of establishment of such Board or Team.

d) Other costs related to the enterprise equitization.

3. The costs of auditing financial statements as of the date of enterprise valuation, where such date coincides with the end of the fiscal year, shall not be included in equitization costs; such costs shall be recorded by the equitized enterprise as its business expenses in the relevant period as prescribed by law.

4. Equitization costs shall be covered by funding sources prescribed in Article 40 of this Decree.

5. Where an enterprise is required to re-determine its enterprise value, or where the equitization process is suspended or terminated under a decision of a competent authority, the owner’s representative agency shall consider issuing a decision on settlement of equitization costs (provided that such costs are supported by valid and lawful documents), which shall be recorded as the enterprise’s expenses and be deductible in determining its taxable incomes.

If the equitization is terminated under a decision of a competent authority, and the enterprise ceases its production and business activities to implement restructuring in other forms, the equitization costs shall be handled in accordance with the restructuring plan as prescribed.

1. Charter capital shall be divided into equal parts called shares. The face value of a share shall be VND ten thousand (VND 10.000). 

2. Share certificate is a certificate issued by the joint-stock company, a book-entry record or electronic data evidencing the ownership of one or more shares by a shareholder of such company. A share certificate must have the primary contents prescribed in clause 1 Article 121 of the Law on Enterprises.

1. The equitized enterprise shall be responsible for arranging and using, to the maximum extent possible, the employees existing at the date of equitization decision, and for settling benefits for employees whose employment is terminated or who are made redundant in accordance with applicable regulations.

The joint-stock company shall assume all obligations and responsibilities towards employees transferred from the equitized enterprise; have the right to recruit, assign and use its workforce, and cooperate with relevant authorities in resolving employees’ regimes and benefits in accordance with regulations of law.

2. The equitized enterprise shall cooperate with relevant authorities in inspecting and settling financial issues in order to determine the state capital value on the official date of conversion into a joint-stock company.

3. The joint-stock company shall be entitled to use all assets and sources of capital transferred to it for its production and business operations; inherit all lawful rights and interests, take responsibility for all debts, including tax debts, labor contracts, and other obligations of the equitized enterprise.

4. Any surplus or deficit in assets as compared to the value of the equitized enterprise already decided and announced by the owner’s representative agency shall be treated as follows:

a) In case the enterprise still has state capital after the equitization:

a1) Asset surplus:

Where the enterprise has not completed the equitization settlement by the official date of conversion into a joint-stock company, the asset surplus shall be recorded as an increase in state capital in the joint-stock company (if the joint-stock company has demand for use of such assets with the approval given in the GMS’s resolution) or shall be transferred to DATC (if the joint-stock company has no demand for use of such assets).

Where the enterprise has completed the equitization settlement by the official date of conversion into a joint-stock company, the asset surplus shall be transferred to DATC.

a2) Any asset deficit remaining after offsetting compensation paid by relevant organizations or individuals (if any) shall be treated as follows:

Where the enterprise has not completed the equitization settlement by the official date of conversion into a joint-stock company, the asset deficit shall be recorded as its business expenses for the period from the date of enterprise valuation to the official date of conversion into a joint-stock company.

Where the enterprise has completed the equitization settlement by the official date of conversion into a joint-stock company, the asset deficit shall be recorded as a decrease in state capital in the joint-stock company if approved by the GMS’s resolution; otherwise, it shall be recorded as business expenses of the joint-stock company.

b) In case the enterprise does not have state capital after the equitization:

b1) Asset surplus: The asset surplus shall be transferred to DATC.

b2) Any asset deficit remaining after offsetting compensation paid by relevant organizations or individuals (if any) shall be recorded as business expenses of the joint-stock company.

1. The equitized enterprise shall disclose the following information on the Government’s web portal, and concurrently send it to the Ministry of Finance of Vietnam and the Steering Board for Enterprise Innovation and Development for monitoring, including: the roadmap and implementation progress of equitization, information relating to the enterprise, settlement of financial issues arising during the equitization, the valuation method and the results of enterprise valuation, the equitization plan, and the implementation status and results thereof, the status of land management and use (including the Land Use Status Report as prescribed in clause 5 Article 32 of this Decree, and any land areas under dispute requiring further resolution), commitment to transfer assets without compensation in the case specified in clause 3 Article 20 of this Decree, plan for labor arrangement and share purchase by employees, and the enterprise's draft charter as prescribed in the Law on Enterprises.

2. Within a maximum period of 90 days from the official date of conversion into a joint-stock company, where the equitized enterprise satisfies the conditions of a public company, it shall submit an application for registration as a public company; registration for trading on the UPCOM trading system and the listing of shares shall be carried out in accordance with regulations of law on securities.

1. An equitized enterprise may engage consulting firms to conduct enterprise valuation, determine the starting price, formulate the equitization plan, organize initial offering, and prepare the equitization final settlement documentation. The owner’s representative agency shall assume responsibility to decide the selection of consulting firms, and may decentralize or authorize the Steering Board to perform all or part of the responsibilities of the employer or procuring entity in accordance with regulations of the Law on Bidding with respect to the engagement of consulting firms (except for the approval of the contractor selection results).

2. The owner’s representative agency, or the Board of Members/Company’s President shall, within their respective competence, decide and assume responsibility for the selection of consulting firms that meet the standards laid down in clause 4 and clause 5 of this Article to conduct enterprise valuation. Selection of consulting firms shall comply with regulations of the Law on Bidding.

3. The consulting firm in charge of conducting enterprise valuation shall select appropriate valuation methods to determine the enterprise value, ensuring compliance with the rules laid down in this Decree, regulations of laws on land, pricing, and valuation, and completion of the valuation within the time limit and in conformity with the commitments stated in the signed contract. The equitized enterprise shall provide complete and truthful information about the enterprise to the consulting firm in charge of conducting enterprise valuation to serve its performance of valuation tasks.

4. A domestic consulting firm providing consultancy services for enterprise valuation must meet the following standards:

a) It is an audit firm, securities company, or valuation enterprise that is duly established and operating in Vietnam in accordance with regulations of law, and holds a valid Certificate of Eligibility to provide valuation services issued by the Ministry of Finance of Vietnam in accordance with regulations of laws on pricing and valuation;

b) It has at least 05-year experience (equivalent to 60 consecutive months of operation by the time of submission of an application for provision of enterprise valuation consultancy services) in one of the following fields: valuation, auditing, accounting, financial consulting, or enterprise ownership conversion consulting;

c) It is not undergoing dissolution, bankruptcy, restructuring or put under special control by a competent state authority;

d) It meets the criteria regarding the number and professional qualifications of its personnel in the sectors or fields in which it operates;

dd) It does not incur any administrative penalties or more severe penalties for violations against regulations of laws regarding its business lines during 05 consecutive years preceding the year of application;

e) It has established an enterprise valuation process in conformity with regulations of law on conversion of state-owned enterprises into joint-stock companies and valuation standards.

5. A foreign consulting firm may provide consultancy services for enterprise valuation upon its satisfaction of the following standards:

a) It is operating in the field of valuation, auditing, accounting, financial consulting or enterprise ownership conversion consulting in accordance with regulations of law of the country where it is headquartered;

b) It has established reputation, capability, and brand recognition, and at least 05-year experience (equivalent to 60 consecutive months of operation by the time of submission of an application for provision of enterprise valuation consultancy services) in one of the following fields: valuation, auditing, accounting, financial consulting, or enterprise ownership conversion consulting.

6. Responsibilities of a consulting firm in charge of conducting enterprise valuation:

a) Comply with regulations of relevant laws in the course of conducting enterprise valuation and performing the contract signed with the client;

b) Assume legal responsibility for its provided enterprise valuation results;

c) Pay compensation for any damage caused by its commission of violations against regulations of law during its provision of enterprise valuation consultancy services, or incur penalties in accordance with regulations of law;

d) Provide explanations or information and data relating to the enterprise valuation results in the event of complaints or at the written request of the owner’s representative agency, the State Audit Office of Vietnam, the Ministry of Finance of Vietnam, or other competent authorities;

dd) Protect the confidentiality of client information; retain the files and documents relating to enterprises for which enterprise valuation has been conducted;

e) A consulting firm is not allowed to provide enterprise valuation consultancy services if:

e1) Its manager, as defined in clause 24 Article 4 of the Law on Enterprises, chief accountant (or person in charge of accounting tasks), or valuer is a related person, as defined in clause 23 Article 4 of the Law on Enterprises and other specialized laws, of the equitized enterprise.

e2) It is providing or has provided auditing, bookkeeping, or financial statement preparation services to the equitized enterprise for 02 consecutive years before the date of enterprise valuation.

1. Upon receipt of the equitization decision from a competent authority, the enterprise shall carry out inventory and classification of assets, sources of capital, and funds under its management, and reconcile and confirm receivables and payables as of the date of enterprise valuation.

With regard to certain specialized assets for which physical access for inventory and assessment of their actual condition is not feasible or effective, the enterprise shall formulate a plan for conducting the inventory and assessment of such assets and submit it to the owner’s representative agency for getting opinions from relevant specialized and technical authorities. Within 20 working days from the date of receipt of the request from the owner’s representative agency, relevant specialized and technical authorities shall provide their opinions in writing about the plan for conducting the inventory and assessment of such assets. Based on the opinions given by relevant specialized and technical authorities, the owner’s representative agency shall decide to approve an appropriate inventory plan and assume responsibility for inventory results.

2. The equitized enterprise shall take charge of conducting audit of annual financial statements in accordance with the State's regulations. If the date of enterprise valuation does not coincide with the end of the fiscal year, the equitized enterprise shall prepare financial statements and have such financial statements audited as of the date of enterprise valuation.

When the parent company of an economic group, or a state corporation, or in a parent company-subsidiary group, is equitized, all subsidiaries 100% of charter capital of which is held by this parent company shall have to undergo enterprise valuation in accordance with this Decree. The date of enterprise valuation of each subsidiary shall be the same as that of the parent company.

3. Before conducting the enterprise valuation, the equitized enterprise shall send a written request to its supervisory tax authority to examine and determine amounts payable to the state budget as prescribed.

Within 30 days from the date of receipt of the written request from the enterprise and the complete tax declaration dossier in case of conversion of business type or restructuring of the enterprise as prescribed, the tax authority shall carry out a tax audit in accordance with provisions of the Law on Tax Administration in order to determine tax obligations and amounts payable to the state budget. If the tax authority fails to carry out a tax audit within this time limit, the enterprise valuation shall be carried out based on figures declared by the equitized enterprise as prescribed.

4. Based on the results of asset inventory, financial statement audit, and finalization of amounts payable to the state budget, the equitized enterprise shall cooperate with relevant authorities to proactively resolve any financial issues within its competence and in accordance with regulations of law before conducting the enterprise valuation. 

Any issues beyond the competence of the equitized enterprise should be promptly reported to competent authorities.

Where such issues have been reported to competent authorities but remain unresolved, the enterprise shall clearly specify these issues in the enterprise valuation report to serve as the basis for further settlement during the period from the date of enterprise valuation to the official date of conversion into a joint-stock company.

5. For an enterprise having specific operations, the inventory, assessment and classification of cash capital, finance lease assets, and receivables and payables, and the settlement of financial issues, shall be subject to a decision issued by the owner’s representative agency in accordance with the guidelines in relevant specialized laws, ensuring that the financial statements contain no material misstatements.

1. Assets leased, borrowed, or received as capital contribution under joint-venture or cooperation agreements, and other assets that are not under ownership of the enterprise, shall be excluded from the enterprise value for equitization purpose.

Assets form from the state budget-derived investment assistance funding for which the equitized enterprise is assigned only as the employer but is not assigned to manage, use and operate the technical infrastructure shall be also excluded from the enterprise value for equitization purpose. The equitized enterprise shall submit a report on these assets to a competent authority to seek its consideration and making decisions on handling of these assets in accordance with relevant regulations of law.

2. The equitized enterprise shall proactively handle the assets which are redundant or pending liquidation in conformity with prevailing regulations of law on liquidation and transfer of assets.

Notwithstanding the provisions of clause 3 of this Article, the equitized enterprise shall transfer any assets which have not yet been disposed of as of the date of enterprise valuation to DATC for handling in accordance with regulations of law. The remaining values as recorded in the accounting books of such assets shall be recorded as the enterprise’s business expenses in the period.

3. The following assets shall not be excluded from the enterprise value:

a) Houses and other constructions (including underground construction works, roads, walls and yards) directly or indirectly used by the enterprise, machinery, equipment and means of transport which have been newly invested in and put into use within 05 years or which have a residual value, as recorded in accounting books, equal to or exceeding 50% of their original costs. The enterprise shall continue managing, monitoring and fully disposing of such assets by the official date of conversion into a joint-stock company in accordance with regulations of law;

b) Assets subject to compulsory destruction such as chemicals, hazardous substances, or expired pesticides, etc.; the enterprise shall cooperate with relevant competent authorities in disposing or destructing these assets in accordance with regulations of law on environmental protection before the equitized enterprise is issued with the initial certificate of registration of joint-stock company.

After the causes and responsibility to pay compensation have been determined in accordance with regulations of law, any remaining loss incurred by the enterprise shall be recognized as its business results as prescribed.

c) Assets that are in-progress construction costs of projects or construction works that have been suspended pursuant to decisions of competent authorities; the joint-stock company shall inherit, monitor and settle such assets in accordance with regulations of law. With respect to project-related costs which have not been approved by competent authorities, have not resulted in the formation of any tangible assets, and are considered unrecoverable such as costs of preparation of prefeasibility studies, construction surveys, and designs, the enterprise shall determine the causes and entities responsible for paying compensation in accordance with regulations of law. Any remaining loss incurred by the enterprise shall be recognized as its business results as prescribed;

d) Assets that have been provided by the enterprise as collateral for loans at credit institutions;

dd) With regard to the assets of the enterprise mentioned in clause 2 Article 6 of this Decree, during its cooperation with DATC and creditors in formulating and submitting the debt sale plan for enterprise restructuring to the owner’s representative agency for approval, the equitized enterprise shall not carry out any liquidation or transfer of assets included in the list of assets accounted for as the enterprise value as announced by the owner’s representative agency.

4. Welfare construction works, including nurseries, kindergartens, health facilities and other welfare assets funded by the enterprise’s reward fund and/or welfare fund, shall be transferred to the trade union of the joint-stock company for management and use in service of the collective interests of its employees in accordance with regulations of the Law on Land and other relevant laws. If the trade union and employees of the joint-stock company have no demand for use of such assets, the enterprise shall, based on the opinions of the employees and the trade union and upon their authorization, organize the liquidation or transfer of such assets in accordance with regulations of relevant laws and the Law on Land. Proceeds from liquidation or transfer of assets, after deducting relevant expenses and paying taxes (if any), shall be paid to the enterprise’s reward fund and/or welfare fund.

With respect to residential houses for officials and employees constructed using funds from the enterprise’s welfare fund, including those financed by the state budget-derived funds, where the enterprise has no further demand for their use, such houses shall be transferred to the competent local housing and land authority for management.

5. Assets used for production and business operations of the equitized enterprise which have been purchased using its reward and/or welfare fund shall, where supported by valid and lawful documents, be subject to revaluation and have their value included in the enterprise value, and shall thereafter be used by the joint-stock company for its production and business operations.

6. Upon equitization of the parent company of an economic group, the parent company of a state corporate, or the parent company of within a parent company-subsidiary group that has public service units, assets shall be handled as follows:

a) If the equitized enterprise inherits assets, it shall organize the valuation thereof and include the value of assets in the enterprise value for equitization in accordance with regulations of law on conversion of public service units into joint-stock companies;

b) If the equitized enterprise does not inherit assets, the Steering Board shall request the owner’s representative agency to consider making a decision or request the Prime Minister of Vietnam to consider making a decision on transfer of such assets to relevant ministries or provincial-level People’s Committees for management in accordance with regulations of law. Pending the completion of such transfer, the equitized enterprise shall continue managing such assets until a decision is issued by the competent authority.

1. The equitized enterprise shall be responsible for reconciling and confirming all receivables (including due and undue debts; in case of a credit institution, including all off-balance-sheet receivables), and for taking necessary measures to recover all due debts before the valuation of the equitized enterprise.

With regard to receivables from users of postpaid telecommunication, information technology and television services (rendered domestically or abroad), and receivables of equitized enterprises that are commercial banks, where such receivables arise regularly from a large quantity of clients and the reconciliation and confirmation of debts with each client would entail considerable workload, time and expenses, the owner’s representative agency shall make a decision on the method of reconciliation and confirmation of debts in a manner appropriate to practical conditions (based on accounting books and records, and the information technology system employed to manage clients of the equitized enterprise).

Debts for which there are insufficient legal documents evidencing that the debtor remains indebted, or evidencing the irrecoverability of such debts as prescribed, shall not be excluded from the enterprise value. The enterprise shall be required to clarify the causes thereof for handling of such debts in accordance with the following principles:

a) The responsibility to make compensation of collectives and individuals for the receivables for which the debtor cannot be identified shall be determined, and any remaining loss shall be settled in accordance with the State regulations on settlement of outstanding debts;

b) The enterprise shall complete relevant documents and continue monitoring and pursuing recovery of debts for which the irrecoverability has not been substantiated.

2. In the event that, as of the date of enterprise valuation, there remain certain receivables which are supported by adequate documents but not yet reconciled and confirmed, the Board of Members or the President of the equitized enterprise shall provide a detailed explanation of such receivables and clearly determine the responsibility of the relevant collectives and individuals for completing the reconciliation and confirmation such debts prior to the date on which the equitized enterprise is issued with the initial certificate of registration of joint-stock company (except for receivables that have been recovered and are supported by valid documents), and submit a report to the owner’s representative agency for including the value of such receivables in the enterprise value according to their book values. The inclusion of such receivables shall also be specified in the decision on approval of the enterprise value and the equitization plan which shall serve as the basis for auction of shares.

As at the time the equitized enterprise is issued with the initial certificate of registration of joint-stock company, when preparing financial statements to serve the transfer into the joint-stock company, in respect of receivables for which reconciliation procedures have been carried out but confirmation has not yet been obtained, the Board of Members or the President of the equitized enterprise shall be responsible for directing a review and classification of such receivables into irrecoverable debts and other outstanding receivables for handling in accordance with the following provisions:

a) With respect to receivables for which reconciliation procedures have been carried out but confirmation has not yet been obtained, and which are determined to be irrecoverable in accordance with applicable regulations, the responsibility for compensation of the relevant collectives and individuals shall be considered and determined. The remaining value of such debts (after offsetting any compensation paid by the relevant collectives and individuals, and provisions for doubtful debts, if any) shall be recorded as expenses of the equitized enterprise; all documents relating such debts shall be transferred to DATC for further handling in accordance with regulations of law. 

b) Other receivables for which reconciliation procedures have been carried out but confirmation has not yet been obtained shall be transferred to the joint-stock company for continued monitoring and recovery as prescribed.

3. The equitized enterprise shall transfer all the debts which are not included in the enterprise value for equitization purpose (including doubtful or bad debts which have been settled by provisions for doubtful debts during 05 consecutive years preceding the date of enterprise valuation), accompanied with all relevant documents, to DATC for further handling in accordance with regulations of law.

With respect to debts which are not included in the enterprise value for equitization purposes of a wholly state-owned enterprise operating in the field of telecommunications (including doubtful or bad debts which have been settled by provisions during 05 consecutive years preceding the date of enterprise valuation), the enterprise shall retain such debts for continued monitoring, management, and recovery.

With respect to debts which are not included in the enterprise value for equitization purposes of a wholly state-owned commercial bank (including doubtful or bad debts which have been settled by provisions during 05 consecutive years preceding the date of enterprise valuation), the commercial bank shall retain such debts for continued monitoring, management, and recovery, or transfer part or all of such debts to DATC for handling as prescribed.

Where the telecommunications enterprise or commercial bank retains such debts for continued monitoring, management, and recovery, it shall be entitled to retain a percentage of the amounts recovered, at the rate prescribed by the Ministry of Finance as applicable to DATC, for the purpose of offsetting costs incurred from the debt recovery. The remaining amount shall be paid to the state budget of appropriate level in accordance with applicable regulations on hierarchical management of state budget.

4. With regard to amounts prepaid to suppliers of goods and services (such as house rents, land rents, payments for goods, salaries and wages payable, premiums for long-term insurance policies, and lump-sum payments of land rents for the entire lease term in industrial parks) which have been recorded as its business expenses, the enterprise shall review the relevant contracts and volume of goods/services delivered in order to record a decrease in its expenses (corresponding to the value of goods/services which are yet to be supplied or the remaining lease term), and record an increase in its prepaid expenses when conducting valuation of the equitized enterprise.

1. The equitized enterprise shall carry out reconciliation and confirmation of all payables owed to organizations and individuals prior to the enterprise valuation, and cooperate with DATC in addressing and resolving any outstanding financial issues before carrying out the financial settlement and the enterprise valuation.

Where, as of the date of enterprise valuation, the debt settlement plan is yet to be completed, the enterprise shall clearly state the reasons therefor in the enterprise valuation record and continue cooperate with DATC in completing such plan as prescribed in clause 2 Article 6 of this Decree.

In the event that, as of the date of enterprise valuation, there remain certain payables which are supported by adequate documents but not yet reconciled and confirmed, the Board of Members or the President of the equitized enterprise shall provide a detailed explanation of such payables and determine the responsibility of the relevant collectives and individuals for completing the reconciliation and confirmation tasks prior to the date on which the equitized enterprise is issued with the initial certificate of registration of joint-stock company (except for payables that have already been settled with relevant organizations and individuals and are supported by valid documents), and submit a report to the owner’s representative agency for including such payables in the enterprise value for equitization purposes according to their book values. The inclusion of such payables shall also be specified in the decision on approval of the enterprise value and the equitization plan which shall serve as the basis for auction of shares.

As at the time the equitized enterprise is been issued with the initial certificate of registration of joint stock company, when preparing financial statements to serve the transfer from a wholly state-owned enterprise to the joint-stock company, the debts for which procedures for requesting creditors to carry out debt reconciliation and confirmation have been completed but such creditors fail to provide confirmation shall be recorded as an increase in state capital. The joint-stock company (converted from a wholly state-owned enterprise) shall retain all debt-related documents, inherit, monitor and pay such debts at the request of creditors. Any payment of debts shall be recorded as the enterprise’s expenses in the relevant period.

With respect to a wholly state-owned commercial bank, checking and reconciliation of client deposits and valuable papers (including certificates of deposit, treasury bills, promissory notes, and bonds) shall be conducted on the basis of detailed records of each payable as reflected in its accounting books; deposit balances of clients that are juridical persons must be reconciled and confirmed with such clients; savings deposits, individual deposits, and valuable papers must be reconciled against  accounting books and records kept by the bank, or where appropriate, reconciled with the relevant clients. As at the time the equitized enterprise is issued with the initial certificate of registration of joint-stock company, when preparing financial statements to serve the transfer from a wholly state-owned enterprise to a joint-stock company, in respect of debts for which reconciliation procedures have been duly carried out but reconciliation and confirmation with customers have not been obtained, the joint-stock commercial bank shall inherit, monitor, manage and pay debts at the lawful request of creditors in accordance with regulations of law.

With regard to collateral, deposits, prepaid amounts of users of postpaid telecommunication, information technology and television services, or for ensuring the provision of intermediary payment services as prescribed by law, where the reconciliation and confirmation of debts with each client would entail considerable workload, time and expenses, the owner’s representative agency shall direct the enterprise to submit a report thereon and make a decision on the method of reconciliation and confirmation of debts in a manner appropriate to practical conditions and regulations of law (based on accounting books and records, contracts for provision of telecommunication, information technology, television, and or intermediary payment services, and the information technology system employed to manage clients of the equitized enterprise).

2. The equitized enterprise shall mobilize lawful sources of capital to pay all debts that have fallen due prior to the date of enterprise valuation, or enter into written agreements with the relevant creditors for the settlement thereof, including the conversion of such payables into share capital.

The conversion of payables outstanding as at the date of enterprise valuation into share capital must be specified in the equitization plan, disclosed in the prospectus for the initial offering of shares, and carried out through the creditor’s successful bid at the auction of shares. Accordingly, the creditor shall participate in IPO and, based on the winning bid, the amount of debt owed to the creditor shall be converted into the corresponding number of shares.

3. Tax debts and other amounts payable to the state budget:

a) The equitized enterprise shall pay taxes and other debts to the state budget before conversion;

b) If the equitized enterprise has not fulfilled its obligations to pay taxes and other amounts payable to the state budget, the joint-stock company shall inherit all of such outstanding liabilities.

4. During the equitization, where the enterprise encounters difficulties in repaying overdue loan debts to credit institutions (including the Vietnam Development Bank) due to its business losses, it shall cooperate with such credit institutions in settling such debts in accordance with regulations of law on credit institutions and other relevant laws.

1. Unused amounts of provisions for devaluation of inventories, financial investments, and doubtful receivables (if any) as at the date of enterprise valuation may be used for offsetting losses in accordance with applicable regulations. Any remaining amounts shall be reserved and recorded as the equitized enterprise’s income.  

2. The equitized enterprise shall be entitled to retain the balance of provisions for warranty of products, good, and construction works as at the date of enterprise valuation corresponding to the warranty obligations under the contracts that remain in force.

3. The amounts of provisions for risks, financial reserves of a bank, or provisions for insurance operations that remain after they are used for offsetting losses in accordance with applicable regulations may be retained by the equitized enterprise but shall be included in the value of the state capital at the equitized enterprise.

4. The amounts of profits that remain after they are used for offsetting the losses incurred in previous years (if any) in accordance with regulations of the Law on Corporate Income Tax, making contributions to the science and technology development fund as prescribed by law, and paying corporate income tax shall be distributed in accordance with regulations of law applicable to state-owned enterprises in force at the date of enterprise valuation.

5. After losses have been offset against according to the abovementioned provisions, the equitized enterprise shall cooperate with relevant authorities in settling any outstanding debts owned to credit institutions (including Vietnam Development Bank) as at the date of enterprise valuation in accordance with regulations of law and the provisions of clause 4 Article 18 of this Decree.

1. If the equitized enterprise inherits the capital amounts invested in other enterprises (stakes), such stakes shall be determined according to the rules stated in Article 34 of this Decree.

2. If the equitized enterprise does not inherit such stakes in other enterprises, the owner’s representative agency shall:

a) Reach an agreement with capital-contributing members to transfer such stakes to another state-owned enterprise to act as the representative for such stakes as prescribed by law;

b) Sell such stakes to another partner or investor as prescribed by law;

c) Where, as at the date of enterprise valuation, the equitized enterprise has not been able to sell or transfer such stakes to another partner or investor, it shall continue to inherit such stakes in accordance with clause 1 of this Article.

3. With regard to the investment made by the equitized enterprise in a foreign-invested enterprise, where the capital contribution contract or investment license includes a commitment that, upon the expiration of its operating period, the entire assets of this enterprise shall be transferred without reimbursement to the Vietnamese party, and such assets are to be inherited by the equitized enterprise, the value of such investment shall be included in the enterprise value for equitization purpose according to the rules stated in Article 34 of this Decree. When the operating period of the foreign-invested enterprise, as stated in the capital contribution contract or investment license, expires, all assets must be transferred without reimbursement to the State shareholder or the Government of Vietnam, if the State no longer holds any stakes in the enterprise, in accordance with Article 125 of the Government's Decree No. 31/2021/ND-CP dated March 26, 2021, as amended or replaced from time to time, and relevant laws.

The equitized enterprise shall publish information about such transfer of assets to its investors and specify the same in the asset transfer record and the Charter of the joint-stock company.

1. The cash balances of the reward fund and the welfare fund as at the date of enterprise valuation shall be used to offset any expenditures in excess of the prescribed levels for employees (if any), and to make payments to employees in accordance with regulations applicable to the equitized enterprise. any remaining amounts shall be distributed to employees, managers and controllers currently working at the enterprise, in proportion to their respective months of working at the equitized enterprise. Such distribution of the remaining amounts of the reward fund and welfare fund to employees, managers and controllers of the enterprise shall be completed before the date of conversion into a joint-stock company.

2. Upon the equitization of the parent company of an economic group, or a state corporation, or a parent company within a parent company–subsidiary group, the unused amounts of the funds mentioned in Clause 1 of this Article shall be settled following the rule that employees and managers of a specific enterprise (whether the parent company or a grade-II enterprise) shall be entitled to distributions from the corresponding funds of that enterprise.

1. The unused amount of the enterprise arrangement support fund of the equitized enterprise (if any) as at the date of enterprise equitization shall be considered as the state capital and transferred to the state budget of appropriate level in accordance with applicable regulations on hierarchical management of state budget.

2. The unused amount of the science and technology development fund of the equitized enterprise (if any) as at the date of enterprise equitization shall be retained by the enterprise; the joint-stock company established after equitization shall inherit and assume responsibility to manage and use such amount in accordance with applicable regulations.

1. The equitized enterprise shall continue implementing regulations on financial management applicable to state-owned enterprises from the date of enterprise valuation to the official date of conversion into a joint-stock company.

2. From the day on which the equitized enterprise is issued with the initial certificate of registration of joint-stock company, the equitized enterprise shall prepare financial statements according to financial policies for state-owned enterprises as the basis for transfer from the equitized enterprise to the joint-stock company, in which:

a) The unused amounts of provisions for devaluation of inventories, financial investments and doubtful debts (if any) may be used for offsetting losses in accordance with applicable regulations. Any remaining amounts shall be reversed and recorded as the equitized enterprise’s income.

With respect to provisions for warranty of products, goods, and construction works (for the signed contracts that remain in force or for the products, goods, and construction works that are still within their warranty periods), the equitized enterprise shall be entitled to set aside such provisions according to the signed contracts and retain the corresponding amounts to perform its warranty obligations thereunder.

The equitized enterprise shall accompany the equitization dossier with detailed statement of each type of products, goods, and construction works. Upon the expiration of the warranty period for the relevant products, goods, and construction works, the remaining amount of the provisions for such warranty shall be, within 05 working days after the date of expiration of the warranty period under the relevant contract, paid by the joint-stock company to the state budget of appropriate level in accordance with applicable regulations on hierarchical management of state budget.

In the event that the joint-stock company fails to fully pay such amount to the state budget within the prescribed time limit, it shall also incur interests on late payment as prescribed by laws on taxation.

b) With respect to exchange rate differences arising from the revaluation of monetary items denominated in foreign currencies as at the official date of conversion into a joint-stock company, the equitized enterprise shall carry out such revaluation in accordance with applicable regulations and shall not record such differences as its income or expenses. The value of exchange rate differences as at that date shall be transferred to the joint-stock company (converted from a state-owned enterprise) for further monitoring and settlement as prescribed.

c) Distribution of profits and making of contributions to funds shall comply with prevailing regulations applicable to state-owned enterprises.

If the official date of conversion into a joint-stock company does not coincide with the date of preparation of annual financial statements, and thus the enterprise classification serving as the basis for determination of contributions made to the enterprise’s funds cannot be carried out, the equitized enterprise shall make contributions to the reward fund and the welfare fund as at that date according to the following rules:

c1) Contributions shall be made based on the enterprise classification results of the year preceding the official date of conversion into a joint-stock company.

c2) Contributions shall be made based on the profits available for making contributions to the enterprise’s funds as prescribed.

c3) The contribution to each fund shall be equal to that made according to regulations on profit distribution applicable to state-owned enterprises divided by 12 and multiplied by the number of months from the beginning of the year until the official date of conversion into a joint-stock company.

d) Where dividends or profits arise during the period from the date of enterprise valuation to the official date of conversion into a joint-stock company (which have not been included in the enterprise value and have not been taken into account in determining the starting price of shares), and a resolution on the distribution of such dividends or profits has been adopted:

d1) With respect to dividends or profits distributed in cash, upon receipt of such dividends or profits, the joint-stock company shall transfer the entire amount received, after deduction of any tax obligations (if any), to the state budget within 05 working days from the date of receipt of such dividends or profits distributed in cash.

d2) With respect to dividends distributed in shares, based on the resolution on the dividend distribution and the notice of right to receive dividends, the equitized enterprise shall determine the number of shares to be received for monitoring and shall clearly provide an explanation thereof in the record of transfer of assets and capital between the equitized enterprise and the joint-stock company.

The joint-stock company shall complete the transfer of such shares within 90 days from the date of receipt thereof. Within 05 working days from the date of successful completion of the transfer, the joint-stock company shall transfer the proceeds received from the transfer that remain after deduction of any tax obligations (if any) and costs incurred from the share transfer to the state budget in accordance with regulations of law.

Transfer of shares listed or registered for trading on the securities market shall comply with regulations of the Law on Securities. Transfer of shares which have been not listed or registered for trading on the securities market shall comply with provisions of Chapter V of this Decree.

Transfer costs include costs of engaging valuation consultants, costs of organizing the auction of shares, costs of carrying out legal procedures for the transfer, taxes, fees and charges (if any) payable to the state budget and other related costs. The estimate of such costs, specific cost levels and final settlement thereof shall be subject to approval by the Board of Directors, provided that such costs must be supported by adequate and valid documents in accordance with regulations of law in force.

At the request of the enterprise made through its capital representatives, the entities to which the enterprise makes capital contributions shall determine the number of shares distributed that are attributable to the state ownership, and shall notify the owner’s representative agency thereof for monitoring and supervision. The owner’s representative agency shall supervise, direct and give its opinions to the capita representatives in the cases specified in clause 2 of this Article.

dd) Where dividends or profits arise during the period from the date of enterprise valuation to the official date of conversion into a joint-stock company (which have not been included in the enterprise value and have not been taken into account in determining the starting price of shares), and resolutions on distribution of dividends or profits in cash or shares issued by competent authorities of the capital-receiving entities are not yet available, the equitized enterprise shall instruct its capital representatives to request such capital-receiving entities to issue resolutions on distribution of dividends or profits, or request the joint-stock company to clearly provide an explanation thereof in the record of transfer of assets and capital between the equitized enterprise and the joint-stock company. Upon receipt of resolutions on distribution of dividends or profits in cash or shares issued by competent authorities of the capital-receiving entities, the dividends or profits distributed shall be settled according to provisions of point d of this clause.

e) Where certain expenses have been recorded by the equitized enterprise prior to the official date of conversion into a joint-stock company but are recovered after such date, the joint-stock company shall transfer the recovered amounts to the state budget.

3. Within 90 days from the issue date of the initial certificate of registration of joint-stock company, the equitized enterprise shall complete the following tasks:

a) Prepare the financial statements as at the date of initial registration of joint-stock company;

b) Carry out the financial statement audit;

c) Carry out finalization and declaration of taxes and other amounts payable to the state budget with tax authorities;

d) After fulfilling the tasks mentioned in Points a, b and c of this Clause, request the owner’s representative agency to consider giving approval of the state capital value as at the official date of conversion into a joint-stock company and the final settlements of proceeds from equitization, payment of benefits paid to redundant employees, and equitization costs.

4. Within 60 days from the receipt of the enterprise’s request for approval of the state capital value as at the official date of conversion into a joint-stock company (excluding the period during which the State Audit Office of Vietnam conducts the audit of the equitization final settlement documentation), the owner’s representative agency shall cooperate with relevant authorities in making decisions on approval of the financial final settlement, the final settlements of equitization costs, payment of benefits paid to redundant employees, and proceeds from the equitization, and the decision to announce the actual state capital value as at the date on which the joint-stock company is issued with the initial enterprise registration certificate. To be specific:

a) The owner’s representative agency shall cooperate with relevant authorities in inspecting and resolving any outstanding financial issues of the enterprise;

b) Upon completion of the inspection and resolution of the enterprise’s financial issues, the owner’s representative agency shall send a written request, accompanied with relevant documents, to the State Audit Office of Vietnam to conduct an audit of the equitization final settlement documentation, where enterprise falls within the scope specified in clause 1 Article 28 of this Decree, including: the financial statements as at the official date of conversion into a joint-stock company, the final settlement of equitization costs, the final settlement of payment of benefits paid to redundant employees, the final settlement of proceeds from the equitization, and the actual state capital value as at the official date of conversion into a joint-stock company.

The equitized enterprise and the owner’s representative agency shall be responsible for providing explanations and adequate relevant documents to ensure the completeness and accuracy of the documents relating to the final settlement of equitization, and the settlement of financial issues prior to the approval of the final settlements, at the request of the State Audit Office of Vietnam.

c) Based on the audit results given by the State Audit Office of Vietnam, the owner’s representative agency shall consider issuing a decision to announce the actual state capital value as at the official date of conversion into a joint-stock company, and determine any additional amounts required to be paid to the state budget or to the parent company - a wholly state-owned enterprise (if any).

5. Based on the approval decision issued by the owner’s representative agency, the equitized enterprise shall re-prepare the financial statements as at the issue date of the initial certificate of registration of joint-stock company to serve as the basis for transfer to the joint-stock company.

The financial statements shall be re-prepared according to modified contents about the settlement of financial issues prescribed herein, final settlements of proceeds from equitization, equitization costs and payment of benefits paid to redundant employees, and the decision to announce the actual state capital value as at the official date of conversion into a joint-stock company (without modifying according revaluation results).

6. The after-tax profits arising during the period from the date of enterprise valuation to the issue date of initial registration of joint-stock company shall be used for offsetting the amount of state capital adjusted due to business losses (if any); any remaining amounts shall be distributed and contributed to the funds prescribed in Point c Clause 2 of this Article.

After deducting relevant expenses as prescribed, the profit amount paid to the development investment fund and the increase in state capital arising during the period from the date of enterprise valuation to the issue date of initial registration of joint-stock company shall be paid to the state budget of appropriate level in accordance with applicable regulations on hierarchical management of state budget

7. The equitized enterprise shall report any decrease in state capital to the owner’s representative agency that shall then cooperate with relevant authorities in inspecting, identifying the causes thereof and determining responsibility of relevant collectives and individuals, and taking the following actions: 

a) In case of objective causes (such as acts of God, enemy-inflicted destruction; changes in the State polices or fluctuations in the international market or other force majeure events), the equitized enterprise shall send a report requesting the owner’s representative agency to consider deciding to use the proceeds from offering of shares of the equitized enterprise to offset losses after deducting compensation from insurers (if any).

If the proceeds from the offering of shares are insufficient to offset the decrease in the state capital, the owner’s representative agency shall, with the approval of the GMS, consider issuing decision to decrease the state capital in the joint-stock company, the charter capital and its structure accordingly, ensuring conformity with the practical conditions.

b) In case of subjective causes:

b1) If losses are incurred due to failure to settle financial issues in accordance with State regulations in force, the responsibility to make material compensation of relevant agencies and individuals, including the enterprise, consulting firms, independent auditors, and the authority issuing the equitization decision shall be identified.

b2) If losses are incurred due to the management of business operations and loss of capital and assets of the enterprise, the enterprise’s managers shall make compensation for such losses caused by their subjective fault in accordance with applicable regulations.

b3) If an organization or individual is unable to make compensation according to a competent authority's decision due to force majeure events, the remaining losses shall be settled in accordance with the provisions of point a of this clause.

8. With regard to the assets prescribed in Clause 4 Article 12 of this Decree, the equitized enterprise shall manage and transfer them to DATC within 15 working days from the day on which the owner’s representative agency issues a decision to transfer these assets to DATC.

1. The consulting firm in charge of conducting enterprise valuation shall be entitled to decide the valuation method which must be appropriate to the specific operational characteristics of the enterprise, ensure compliance with regulations of law in force, and be selected in an objective and transparent manner so as to safeguard and maximize the interests of the State, and shall assume responsibility for its decision.

2. The enterprise value and the state capital value in the enterprise determined and announced shall not be lower than those determined adopting the asset-based method prescribed in Section 4 Chapter II of this Decree.

1. Based on the enterprise valuation documentation prepared by the consulting firm, the Steering Board shall be responsible for reviewing and verifying the order and procedures, as well as the compliance with regulations of law on enterprise valuation, and shall submit it to the owner’s representative agency for decision.

The period for settlement of financial issues and provision of enterprise valuation consulting services (from the date of enterprise valuation to the date of announcement of the enterprise value) shall not exceed 12 months; in respect of an enterprise subject to audits by the State Audit Office of Vietnam as prescribed in Clause 1 Article 28 of this Decree, such period shall not exceed 15 months.

If the value of the equitized enterprise has not been announced upon expiry of the aforementioned time limit, the owner’s representative agency shall decide to change the date of enterprise valuation to serve the settlement of financial issues and enterprise valuation in accordance with applicable regulations; and determine the objective and subjective causes of such delayed announcement of the enterprise value so as to review accountability, take appropriate disciplinary actions, and request the relevant organizations and individuals to compensate for any costs incurred from such delay.

2. The owner’s representative agency shall consider deciding and announcing the enterprise value within a period not exceeding 15 working days from the date of receipt of complete documentation (including the conclusion given by the State Audit Office of Vietnam in respect of an enterprise specified in Clause 1 Article 28 of this Decree).

3. Within 15 working days from the day on which the owner’s representative agency issues a decision to announce the enterprise value, the equitized enterprise shall manage and transfer receivables, payables and assets excluded from the enterprise value as prescribed in clause 2 Article 16, clause 2 and clause 3 Article 17 of this Decree to DATC; continue monitoring, managing and recording other assets according to their book values as at the date of enterprise valuation.

The enterprise valuation results as announced by the owner’s representative agency shall constitute an important basis for determining the starting price for the initial offering of shares of the equitized enterprise.

1. The owner’s representative agency shall consider modifying the announced enterprise value in the following cases:

a) There are force majeure events (such as acts of God, enemy-inflicted destruction, changes in the State polices or other force majeure events) that affect the values of the enterprise’s assets;

b) Variations or discrepancies in the enterprise valuation process conducted by the consulting firm or the equitized enterprise are found. 

2. Modification of the announced enterprise value prescribed in Clause 1 of this Article shall only apply to the equitized enterprise that has not yet conducted its IPO.

3. If, after 09 months from the date of announcement of the enterprise value, the enterprise fails to conduct the IPO, an enterprise revaluation shall be required, unless otherwise decided by the Prime Minister at the request of the owner’s representative agency, provided that the IPO must in any event be conducted within 12 months from the date of announcement of the enterprise value.

1. Regulated entities and scope of audit:

Based on the enterprise valuation results provided by the consulting firm and at the request of the owner’s representative agency, the State Audit Office of Vietnam shall audit the enterprise valuation results and settlement of financial issues prior to valuation of the following enterprises:

a) Wholly state-owned single-member limited liability companies which are parent companies of economic groups or state corporations (including state-owned commercial banks);

b) State-owned enterprises (including parent companies in groups of parent company – subsidiary groups and wholly state-owned single-member limited liability companies) that have state capital of at least VND 1.800 billion as recorded in accounting books as at the date of enterprise valuation;

c) Other single-member limited liability companies that are subject to state audit at the request of the Prime Minister or the owner’s representative agency.

2. In respect of the enterprises specified in Points a and b, Clause 1 of this Article, the owner’s representative agency shall send to the State Audit Office of Vietnam a list of such enterprises which must specify the schedule (roadmap) for their equitization so that the State Audit Office of Vietnam shall formulate a program or plan for auditing enterprise valuation results given by consulting firms and settlement of financial issues prior to the official announcement of the enterprise value.

In respect of the enterprises mentioned in point c clause 1 of this Article, within 05 working days from the date of receipt of the Prime Minister’s request for audit, the owner’s representative agency shall send a notice of the schedule (roadmap) for equitization of such enterprises to the State Audit Office of Vietnam to serve its formulation of a program or plan for auditing enterprise valuation results given by consulting firms and settlement of financial issues prior to the official announcement of the enterprise value.

3. Responsibilities of the State Audit Office of Vietnam and relevant authorities:

a) Upon receipt of enterprise valuation results given by consulting firms, the owner’s representative agency shall send a written request, accompanied with the relevant documents, to the State Audit Office of Vietnam, for audit of enterprise valuation results given by consulting firms and settlement of financial issues prior to the official announcement of the enterprise value;

b) Upon receipt of the request from the owner’s representative agency, the State Audit Office of Vietnam shall conduct the audit of enterprise valuation results given by consulting firms and settlement of financial issues of the equitized enterprise. The time limits for completion of audit tasks and announcement of audit results shall comply with regulations of law on state audit. The State Audit Office of Vietnam shall assume responsibility for their audit results in accordance with regulations of law;

c) The equitized enterprise and the consulting firm in charge of conducting the enterprise valuation shall provide explanations and adequate documents concerning the enterprise valuation and settlement of financial issues prior to enterprise valuation at the request of the State Audit Office of Vietnam.

4. Handling of audit results:

Based on the audit results produced by the State Audit Office of Vietnam, the owner’s representative agency shall consider issuing a decision to announce the enterprise value and proceed with the subsequent steps of the equitization process as prescribed.

1. The total actual value of the equitized enterprise shall be the aggregate value of all assets of the enterprise as at the date of enterprise valuation, as revalued, taking into account the enterprise’s earning capacity.

The actual value of the owner’s equity in the equitized enterprise as stated in the decision to announce the enterprise value shall be the total actual value of the equitized enterprise after deducting all liabilities payable and any remaining funding for non-profit activities (if any).

2. Where a parent company of an economic group, or a state corporation, or a parent company within a parent company-subsidiary group, undergoes equitization, the value of the owner’s equity in the equitized enterprise shall be equal to the total actual value of the owner’s equity in such parent company.

3. When conducting valuation of a financial institution or credit institution adopting the asset-based method, the audited financial statements may be used as the basis for determining the value of cash and cash-equivalent assets, outstanding debts and other assets, provided that the physical inventory and valuation of fixed assets, financial investments in other enterprises and land-use rights must be carried out in accordance with the State regulations.

4. Intangible assets (excluding land-use rights) must be revalued and included in the enterprise value if the equitized enterprise has a demand to continue using them. Revaluation of such intangible assets shall be conducted by a licensed valuation organization in accordance with regulations of law on valuation.

5. In respect of the equitized enterprise’s investments in joint-stock companies in which the equitized enterprise is entitled to receive shares without payment as at the date of enterprise valuation, the value of such investments must be re-determined in accordance with the rules set out in Article 34 of this Decree, on the basis of the total number of shares owned by the equitized enterprise (including all shares already received, managed, and monitored in the notes to the financial statements) and the number of shares to be received after the date of enterprise valuation pursuant to resolutions of the GMS of such companies.

6. The value of assets created under a build-operate-transfer (BOT) contract shall be determined according to their values recorded in accounting books; at the same time, investors should be informed that these assets will be transferred to competent authorities upon expiry or termination of the BOT contract.

7. With respect of assets being technical infrastructure facilities of an industrial park (excluding leased land-use rights) in which the enterprise has invested, and for which the enterprise has entered into a sublease agreement specifying the rent unit price, and has collected a lump-sum rent payment for the entire project term, such assets shall not be subject to revaluation when conducting the enterprise valuation. The joint-stock company shall pay the land rent in accordance with regulations of the Law on Land. Assets that are the remaining parts of technical infrastructure facilities of the industrial park which have not yet been leased out shall be revalued as prescribed.

8. If assets have been liquidated, transferred or sold within the period from the date of enterprise valuation to the day on which the valuation is conducted by the consulting firm (i.e. such assets no longer physically exist at the time the valuation is conducted), the enterprise shall record the proceeds and costs arising from such liquidation, transfer or selling of assets in accordance with regulations on financial management. When conducting the valuation, the consulting firm shall base its assessment on the actual proceeds recovered from the liquidation, transfer or selling of such assets, provided that such proceeds shall not be lower than the asset values as recorded in accounting books.

1. The value of the assets mentioned in clauses 1, 2 and 4 Article 16 of this Decree.

2. Irrecoverable receivables.

3. Investments in other enterprises as prescribed in points a and b clause 2 Article 20 of this Decree.

4. Assets of public service units in the case of equitization of the parent company of an economic group or a state corporation, or the parent company within a parent company-subsidiary group (except for vocational education and training institutions, and health facilities), and assets used for non-business activities which shall not be inherited by the equitized enterprise and shall, upon consideration and decision by the owner’s representative agency, be transferred to relevant authorities for the purpose of promoting private sector participation in accordance with regulations of law.

5. The person having the power to decide the enterprise value shall consider and decide the exclusion from the enterprise value of the items specified in clauses 1, 2, 3 and 4 of this Article.

1. The figures recorded in accounting books of the enterprise as at the date of enterprise valuation.

2. Documents on inventory, classification and quality assessment of the enterprise’s assets as at the date of enterprise valuation.

3. Market prices of assets as at the date of enterprise valuation.

4. The value of allocated land-use rights and goodwill of the enterprise, or the value of intangible assets which cannot be determined as prescribed by the law on valuation, as at the date of enterprise valuation.

1. The value of land-use rights over the land areas allocated with land levies as prescribed in clause 2 Article 119 of the Law on Land, as amended or replaced from time to time, must be re-determined for inclusion in the enterprise value according to the following provisions:

a) The land price used for determining the value of land-use rights which shall be included in the enterprise value shall be the specific land price for the region where the enterprise’s land area is located, as announced by the People’s Committee of the province or central-affiliated city where the enterprise’s land area is located, in accordance with provisions of point c Clause 1 and Point a Clause 2 Article 160 of the Law on Land, as amended or replaced from time to time;

b) Any positive difference between the value of land use rights re-determined as prescribed in Point a of this Clause and the value currently recorded in accounting books shall be paid to the state budget.

If the value of land-use rights re-determined according to the land price prescribed in Point a of this Clause is lower than the value currently recorded in accounting books, the latter shall be taken into account upon the enterprise valuation.

c) If the enterprise has not to pay land levies or is exempted from land levies, as prescribed by the Law on Land and relevant laws, for its allocated land areas (including those land areas used for producing and supplying public or welfare services/goods such as green parks, urban environment works, coach stations or irrigation works, etc.), these land areas shall be excluded when determining the value of land-use rights upon enterprise valuation. Land areas used for public works that have safety corridors as prescribed in the Law on Land shall be also excluded from the enterprise value. The equitized enterprise shall manage and use these land areas for their intended purposes in conformity with regulations of the Law on Land.

2. With regard to the remaining land area (after deducting the land areas prescribed in Clause 1 of this Article), the enterprise shall enter into a fixed-term land lease in accordance with regulations of the Law on Land and pay annual land rents. Where:

a) The joint-stock company shall pay the land rents in accordance with regulations of the Law on Land, and such land rents shall not be included in the enterprise value for equitization;

b) In respect of land areas leased by the State to the enterprise with lump-sum payment of the land rent for the entire lease term, and land areas transferred to the enterprise originating from land leased with lump-sum payment of the land rent to the State, the joint-stock company shall be entitled to continue leasing such land for the remaining lease term under the land lease. The amount which has been paid by the enterprise to the State or to receive the transfer of land use rights but has not yet been accounted for the enterprise’s business results as at the date of enterprise valuation shall be recorded as the prepaid expenses and deducted from the annual land rents payable by the joint-stock company according to the land price schedule as announced by the relevant provincial-level People’s Committee;

c) The land areas allocated by the State with charging the land levy, and land areas transferred to the enterprise originating from land allocated by the State with charging the land levy are now subject to land lease in accordance with the Law on Land, land leases shall be signed to continue using such land areas. The amount which has been paid by the enterprise to the State or to receive the transfer of land use rights but has not yet been accounted for the enterprise’s business results as at the date of enterprise valuation shall be recorded as the prepaid expenses and deducted from the annual land rents payable by the joint-stock company in accordance with regulations of the Law on Land;

d) The value generated by the rights to use the land areas leased with annual rent payment shall be determined for inclusion in the enterprise value adhering to the following rules:

d1) Only the value generated by the rights to use the land areas leased with annual rent payment under the land leases signed by the enterprise directly with competent authorities shall be determined. In cases where there is no land lease or where the land lease has expired, the relevant provincial-level People’s Committee shall be responsible for reviewing and recovering the land, organizing an auction of the land lease rights, and leasing the land in accordance with the laws and regulations of the Law on Land.

d2) The value generated by the rights to use the land areas leased with annual rent payment shall be determined by the consulting firm using an appropriate method in conformity with valuation standards, provided that it shall not be lower than the value determined based on the remaining lease term and the positive difference (if any) between the land rent calculated at the land price determined by the consulting firm at the time of determining the starting price and the land rent calculated at the land price currently paid by the equitized enterprise. Where the remaining lease term is shorter than 05 years, it shall be deemed to be 05 years.

d3) If the enterprise is using leased land and is exempted from payment of land rents in accordance with regulations of the Law on Land, the value of the land area for which the land rents are exempted shall not be included in the enterprise value. In respect of land areas that are currently exempted from the land rents but no longer meet the conditions for such exemption, the equitized enterprise must participate in the auction for land-use rights and pay land rents in accordance with the regulations of the Law on Land.

3. In cases where the land area is used by an enterprise that directly serves national defense and security tasks and is undergoing equitization, and is included in the planning for land areas used for national defense and security purposes but has not yet been used for such purposes, the Ministry of National Defense of Vietnam or the Ministry of Public Security of Vietnam shall cooperate with the People’s Committee of province or central-affiliated city where the land area is located in considering and deciding whether to allow the enterprise to use such land area until a land appropriation decision is issued by a competent authority in accordance with Clause 3 Article 200 of the Law on Land, as amended or replaced from time to time.

4. After obtaining the initial certificate of registration of joint-stock company, the joint-stock company shall perform financial obligations, complete procedures for land allocation, land lease, and issuance of certificate of land-use rights and ownership of house and other property on land in accordance with applicable regulations of the Law on Land.

5. Upon equitization, the enterprise mentioned in Article 5 of this Decree shall not be allowed to repurpose any land areas under its management and use. The enterprise shall prepare a Land Use Status Report for the land areas under its management and use in accordance with the law, which shall include: a list of land parcels, their areas, current land use purposes, payment methods, whether the land area is allocated or leased, and the lease term. Upon completion of conversion into a joint-stock company, the enterprise shall continue using such land areas for the purposes stated in the submitted Land Use Status Report. In cases where the enterprise wishes to repurpose such land areas and change the land allocation method, it shall comply with provisions of the Law on Land and relevant laws.

1. The goodwill of an equitized enterprise includes brand value and development potential.

2. The goodwill of the equitized enterprise shall be determined as follows:

a) The brand value shall be determined on the basis of actual costs incurred for the creation and protection of brands and trade names during the enterprise’s operation over 10 years preceding the date of enterprise valuation, including costs of enterprise establishment, employee training, advertising and promotion activities performed in Vietnam and overseas for the marketing and introduction of the enterprise and its products, and development of the enterprise’s website.

b) The enterprise’s development potential value shall be assessed and determined on the basis of its future earning capacity by comparing the enterprise’s rate of return with the interest rate of Government bonds as follows:

Where: The state capital value, as recorded in accounting books, as at the date of enterprise valuation shall be the total value of state capital actually recorded in the accounting books of the equitized enterprise as at the date of enterprise valuation, after deducting debts payable and unused amount of the funding for non-profit activities (if any), excluding any exchange rate differences arising from the revaluation of monetary items denominated in foreign currencies.

The state capital shall be determined to include the entire owner's equity. The after-tax rate of return shall be determined as follows:

The average state capital, as recorded in accounting books, over 5 years shall be determined by dividing the sum of the annual average state capital amounts for such 5 years by 5. The annual average state capital amount shall be determined by dividing the sum of the state capital at the beginning of the year and the state capital at the end of the same year by 2.

3. In cases where the equitized enterprise owns intangible fixed assets such as mineral and raw material exploitation advantages, project development rights, rights to manage and operate industrial park infrastructure projects, or other unidentified intangible fixed assets, the owner’s representative agency shall decide whether to employ the valuation method prescribed in Clause 2 of this Article or another appropriate method to ensure that the enterprise’s goodwill is fully and accurately reflected.

1. The stake that the equitized enterprise invests in a single-member limited liability company 100% of the capital of which is contributed by the equitized enterprise shall be determined as follows:

a) The value of the stake that the equitized enterprise holds in a grade-II enterprise shall be re-determined according to provisions of Section 3 Chapter II of this Decree;

b) Determination of the value of stakes that the equitized enterprise holds in grade-II enterprises established and operating overseas shall be carried out in the same manner as determination of the value of stakes that the equitized enterprise holds in other enterprises as prescribed in Points a, b and c Clause 3 this Article.

The value of the equitized enterprise’s stakes in a grade-II enterprise operating overseas shall be converted at the foreign currency buying rate quoted by the commercial bank where the equitized enterprise regularly conducts transactions as at the date of enterprise valuation.

2. The value of stakes that the equitized enterprise holds in a joint-stock company listed on the securities market shall be determined based on the reference price of the shares traded on the securities market as at the date of enterprise valuation. If no transactions occur as at the date of enterprise valuation, the value of stakes shall be determined based on the reference price of the most recent trading session preceding the date of enterprise valuation.

The value of stakes that the equitized enterprise holds in a joint-stock company registered for trading on UPCOM shall be determined as the average trading price on the system as at the date of enterprise valuation. If no transactions occur as at the date of enterprise valuation, the value of stakes shall be determined based on the average trading price on the system on the most recent trading date preceding the date of enterprise valuation. If no transactions in the shares of the joint-stock company registered for trading on UPCOM occur within 30 days prior to the date of enterprise valuation, the value of stakes shall be determined according to provisions of Points a, b and c Clause 3 this Article.

If the price of shares on the securities market or on UPCOM is lower than their face value (i.e. VND 10.000) but the joint-stock company in which the equitized enterprise holds stakes operates profitably, the value of stakes that the equitized enterprise holds in such joint-stock company shall be determine according to provisions of Points a and b Clause 3 this Article.

3. The value of stakes that the equitized enterprise holds in another enterprise (other than those specified in Clauses 1 and 2 of this Article) shall be determined on the basis of the ratio of actual stakes multiplied (x) by the owner's equity of such enterprise as follows:

a) The ratio of actual stakes of the equitized enterprise means the ratio (%) of the capital amount actually contributed by the equitized enterprise to the total paid-in capital (total capital amount contributed by the owners) of that enterprise;

b) The owner's equity of that enterprise shall be determined based on its audited financial statements as at the date of enterprise valuation. If such financial statements have not been audited, the owner’s equity shall be determined based on the unaudited financial statements as at the date of enterprise valuation. If the enterprise in which the equitized enterprise hold stakes does not prepare financial statements as at the date of enterprise valuation, the most recent financial statements prepared prior to the date of enterprise valuation shall be used as the basis for determination;

The representative of the equitized enterprise’s stakes in such enterprise shall review and give opinions about fluctuations arising during the period for which such enterprise does not prepare financial statements as at the date of enterprise valuation, and submit a report thereon to the owner’s representative agency for its consideration and decision on the determination of the value of the equitized enterprise’s stakes in such enterprise.

c) If the re-determined actual value of the equitized enterprise’s stakes in an enterprise is lower than the value recorded in the equitized enterprise’s accounting books, such value shall be determined based on the re-determined actual value, provided that it is not less than zero (0);

d) The value of the equitized enterprise’s stakes in a joint-stock company or a multi-member limited liability company operating overseas shall be converted at the foreign currency buying rate quoted by the commercial bank where the equitized enterprise regularly conducts transactions as at the date of enterprise valuation.

1. Based on the state capital value as recorded in the accounting books of the equitized enterprise and the business plans for the years following its conversion into a joint-stock company, the owner’s representative agency shall decide the scale of the charter capital according to the following rules:

a) If the state capital value as recorded in the enterprise’s accounting books exceeds the charter capital required for the enterprise’s operations, the owner’s representative agency shall determine the charter capital based on the enterprise’s actual operational needs. The difference between the state capital value as recorded in the enterprise’s accounting books and the determined charter capital shall be transferred to the state budget within 10 days from the day on which the owner’s representative agency issues a decision on transfer of such difference to the state budget;

b) In case of issuance of additional shares, the charter capital shall be determined as the sum of the state capital value as recorded in accounting books and the value of additionally issued shares calculated at their face value.

2. Based on the determined charter capital, the owner’s representative agency shall decide the structure of initial share capital, including:

a) Shares held by the State as per classification criteria for state-owned enterprises announced by the Prime Minister in each period.

In case of enterprises that have specific operations and play an important role in local economic development or serve sectoral development strategies or economic groups (such as enterprises engaged in the management and operation of seaports; cases where the State holds 36% of the charter capital, and other specific cases), the owner’s representative agency shall submit reports requesting the Prime Minister to issue specific decisions on the number of shares to be held by the State and the number of super-voting shares in accordance with provisions of Clause 3 Article 114 and Article 116 of the Law on Enterprises. 

b) Shares sold to the trade union of the equitized enterprise.

The trade union of the equitized enterprise is entitled to use its budget (as prescribed in Article 29 of the 2024 Law on Trade Union; without mobilizing or borrowing funds) to purchase shares, provided that the value of their purchased shares shall not exceed 3% of the charter capital. The purchased shares shall be held by the trade union and shall not be transferred within 03 years from the date of conversion into a joint-stock company.

The selling price of shares to the trade union of the equitized enterprise shall be their face value (VND 10.000 per share);

c) Shares sold to employees of the equitized enterprise as prescribed in Clause 1 and Clause 2 Article 43 of this Decree;

d) Shares sold to strategic investors (if any) as prescribed in Clause 3 Article 8 of this Decree;

dd) Shares sold at public auctions accounting for at least 20% of the charter capital.

3. If the number of shares to be sold at preferential prices to the enterprise’s employees (calculated at the maximum preferential rate) exceeds the number of remaining shares to be issued (after deducting the number of shares held by the State and the number of shares sold to investors and the trade union as prescribed in Points a, b, d and dd Clause 2 this Article), and the enterprise does not have control shares held by the State, the owner’s representative agency shall consider issuing a decision to reduce the number of shares held by the State in order to increase the number of shares sold at preferential prices to employees.

1. The auction method shall be applied in cases of public auction without distinction between institutional investors and individual investors, or between domestic and foreign investors.

2. The public auction shall be conducted at the SE. If the total face value of shares offered by the equitized enterprise is less than VND 10 billion, the owner’s representative agency may consider issuing a decision to conduct the auction of shares through a securities company, property auction service center, or property auction enterprise, as prescribed in the Law on Property Auction.

3. At least 30 days before the initial offering, the Steering Board shall cooperate with the SE or the auction organization to disclose information at the enterprise, the auction venue, and on the mass media and the Government’s web portal.

4. The selling price at the public auction shall be the successful bid of each investor. The investor shall be entitled to purchase shares at their winning bid which shall not be lower than the starting price.

1. Direct negotiation means a method of offering shares whereby shares are sold to investors based on the results of negotiation between the Steering Board (or its authorized organization) and each investor.

2. The selling price shall be agreed upon according to provisions of points d and e Clause 3 Article 8 and Clauses 2, 4 Article 38 of this Decree.

1. Based on the equitization plan approved by the competent authority, the Steering Board shall sell shares to employees and the enterprise’s trade union before conducting the public auction; the Steering Board shall report the number of shares which the employees and the enterprise’s trade union refuse to purchase according to the approved equitization plan to the owner’s representative agency for inclusion in the number of shares to be sold through the public auction.

2. Based on the actual share offering results, the Steering Board shall request the owner’s representative agency to issue a decision on adjustment of the charter capital and its structure as set out in the approved equitization plan.

In case the equitization is carried out through the sale of a portion of the state capital combined with the issuance of additional shares, or through the sale of the entire state capital combined with the issuance of additional shares, the number of shares sold shall be determined as the number of additionally issued shares according to the approved equitization plan, and the remaining number of shares shall be determined as shares sold to reduce the state capital; the number of shares sold at preferential prices to the entities prescribed in Points a and c Clause 1 Article 43 of this Decree shall be determined as shares sold from the state capital portion.

3. Where no investors subscribe for shares, the enterprise shall, based on the results of offering of shares to employees and the enterprise’s trade union, follow procedures for conversion into a joint-stock company and adjust its charter capital and charter capital structure according to Clause 2 of this Article.

4. If there is only one investor subscribing for shares, the Steering Board shall conduct a direct negotiation to offer shares to such investor at a price not lower than the starting price and for the validly subscribed quantity of shares. If the investor declines to purchase shares, the equitized enterprise shall comply with the provisions of Clause 3 this Article.

5. Where, after the public auction, all successful bidders decline to purchase shares, the equitized enterprise shall comply with the provisions of Clause 3 of this Article.

6. Where only part of shares is sold in the public auction, the remaining unsold shares (including the number of shares declined to purchase by successful bidders) shall be settled in the following order:

a) The Steering Board shall notify investors that have made valid bids in the auction (excluding those who won the entire quantity of shares subscribed in the public auction) and conduct direct negotiations for offering of shares to such investors based on the quantity of shares they subscribed for but were not allocated and at the bids submitted at the auction session, following the rule that their bids shall be considered in descending order until the remaining shares are fully sold;

b) If shares still remain unsold after the negotiations conducted as prescribed in Point a Clause 6 of this Article, the Steering Board shall continue to notify investors who won the entire quantity of shares subscribed in the public auction (excluding those who won the auction but declined to purchase shares) and conduct direct negotiations for offering of shares to such investors at the bids submitted by each investor at the public auction, following the rule that their bids shall be considered in descending order until the remaining shares are fully sold;

c) The equitized enterprise shall deal with the number of shares which remain unsold after the implementation of Points a and b of this Clause in accordance with Clause 3 of this Article.

Within 04 months from the issue date of the decision on approval of the equitization plan, the enterprise shall be required to complete the initial offering of shares adopting the methods prescribed in this Decree.

1. Determination of the proceeds earned from the initial offering

a) Within 05 working days from the deadline for payment by investors participating in the public auction, the auction organization shall transfer the proceeds earned from the initial offering to the equitized enterprise. The equitized enterprise shall use such proceeds to settle redundancy policies, and pay equitization expenses under the cost estimate stated in the equitization plan approved by the competent authority, retain an amount equivalent to the value of additionally issued shares calculated at face value and book value, and transfer the remaining amount to the state budget;

b) Within 05 working days from the deadline for payment by the trade union and employees, the Steering Board shall transfer the entire proceeds earned from the offering of shares to the trade union and employees to the state budget;

c) Within 20 days from the deadline for payment by investors participating in the public auction, the Steering Board shall direct the enterprise to complete the offering of shares in accordance with clause 6 Article 38 of this Decree. Within 05 days from the deadline for payment, the Steering Board shall request the enterprise to transfer the proceeds earned from the offering of shares to the state budget;

d) Within 30 days from the deadline for payment by investors participating in the public auction, the Steering Board shall request the enterprise to complete the offering of shares by conducting negotiations with strategic investors as prescribed in this Decree. The Steering Board shall transfer the entire proceeds earned from such offering of shares to the state budget within 05 days from the deadline for payment;

dd) Within 30 days from the deadline for payment by investors participating in the public auction, the Steering Board shall direct the enterprise to cooperate with the auction organization in completing the auction for offering of shares to strategic investors. Within 05 days from the deadline for payment, the Steering Board shall transfer the entire proceeds earned from such offering of shares to the state budget;

e) Where the total proceeds earned from the initial offering mentioned in Points a, b, c, d or dd Clause 1 of this Article are lower than the estimated funding for paying benefits to redundant employees and estimated equitization costs stated in the approved equitization plan, the equitized enterprise shall retain the entire amount of such proceeds to cover expenses under the approved cost estimates and shall make the final settlement when the enterprise is issued with the initial certificate of registration of joint-stock company.

2. Determination of proceeds from equitization as at the official date of conversion into a joint-stock company:

a) Within 90 days from the issue date of the initial certificate of registration of joint-stock company, the enterprise shall determine the amount payable to the state budget based on the financial statements as at the date on which it commences operation in the form of a joint-stock company and the guidelines for settlement of financial issues as at the official date of conversion into a joint-stock company as prescribed in Article 23 of this Decree. The amounts retained by the enterprise include: an amount equivalent to the value of additionally issued shares calculated at face value; the capital surplus from the issuance of additional shares which shall be used to pay equitization costs and benefits to redundant employees (if insufficient, such costs and benefits shall be settled according to the provisions of Point d this Clause); and the remaining amount (if any) which shall be retained by the joint-stock company in proportion to the number of additionally issued shares in the charter capital structure, where:

b) Within 05 working days from the day on which the owner’s representative agency issues a decision on the matters specified in Clause 4 Article 23 of this Decree, the enterprise shall transfer any additional amount exceeding the amount already paid as determined under Point a Clause 2 this Article (if any) to the state budget;

c) If the amount payable to the state budget as determined in the final settlement by the owner’s representative agency is lower than the amount determined and already transferred to the state budget by the enterprise as prescribed in Point a of this Clause, the enterprise shall submit a written request to the owner’s representative agency for refund of the overpaid amount from the state budget in accordance with the Government’s Decree No. 148/2021/ND-CP dated December 31, 2021, as amended or replaced from time to time;

d) If, based on the IPO results, the proceeds actually earned from offering of shares at preferential prices to employees, the enterprise’s trade union, strategic investors, and other investors are insufficient to cover the relevant expenses (including equitization costs, benefits paid to redundant employees, and preferential treatment for employees) according to the final settlement approved by the competent authority, the owner’s representative agency shall consider issuing a decision, with approval by the GMS, to reduce the state capital in the joint-stock company (if the joint-stock company still has the state capital), and adjust the charter capital and the charter capital structure of the joint-stock company to align with its actual situation. Where, after adjustment, there is no remaining state capital, the enterprise shall report to the owner’s representative agency to request financial support from the state budget to cover the deficit in accordance with the Decree No. 148/2021/ND-CP, as amended or replaced from time to time.

3. Where, upon the expiry of the time limits specified in clauses 1 and 2 of this Article, the auction organization and the enterprise have not yet transferred the required amounts to the state budget, they shall incur late payment interests in accordance with regulations of law on tax administration. Such late payment interests shall not be included in the enterprise’s reasonable expenses for the purpose of calculating corporate income tax and shall be covered using profits after tax, after deducting any compensations paid by the Board of Members, Board of Directors and relevant collectives and individuals responsible for such late payment (if any).

4. The owner’s representative agency shall direct the Steering Board and the equitized enterprise to submit adequate and timely reports on management and use of proceeds from equitization to the Ministry of Finance of Vietnam.

5. Proceeds from equitization to be transferred to the state budget as prescribed in this Decree shall be declared and paid in accordance with the Decree No. 148/2021/ND-CP, as amended or replaced from time to time.

1. The Steering Board shall direct the equitized enterprise to cooperate with the consulting firm in charge of equitization tasks in drafting the Charter of the joint-stock company which must be disclosed to investors before the offering of shares. The draft Charter of the joint-stock company shall not be contrary to the provisions of the Law on Enterprises and relevant laws.

2. The Charter of the joint-stock company shall be considered to be ratified by the first GMS if it is approved by at least 65% of the total votes of shareholders attending the GMS.

1. Within 30 working days from the completion of the offering of shares, the equitized enterprise shall convene the first GMS to convert the enterprise into a joint-stock company, and follow enterprise registration procedures in accordance with regulations of law.

2. An application for enterprise registration shall include the decision on conversion into a joint-stock company issued by the authority issuing the equitization decision, the decision on appointment of the representative for state capital in the joint-stock company issued by the owner’s representative agency (if any), and the Charter of the joint-stock company bearing the signature of its legal representative.

1. Shares sold at preferential prices to employees

a) Persons eligible to purchase shares at preferential prices include:

a1) Employees working under employment contracts and managers of the equitized enterprise as at the date of enterprise valuation.

a2) Employees of the equitized enterprise who, as at the date of enterprise valuation, are appointed to act as representatives of the enterprise’s stakes in other enterprises and have not yet been entitled to the policy on purchase of shares at preferential prices in such enterprises.

a3) Employees working under employment contracts and managers of a grade-II enterprise (who have not yet been entitled to the policy on purchase of shares at preferential prices in other enterprises) as at the date of enterprise valuation of a grade-I enterprise.

b) Each person specified in Point a Clause 1 of this Article is entitled to purchase up to 100 shares for each year of actual working in the state sector at a price equal to 60% of the face value per share (VND 10.000/share);

c) An employee representing a contracting household (one employee representative for each contracting household) who, as at the date of enterprise valuation, has a stable long-term contracting agreement with an agriculture or forestry company shall, upon the company’s conversion into a joint-stock company, be entitled to purchase up to 100 shares for each year of actual contracting with the company at a price equal to 60% of the face value per share (VND 10.000/share);

d) The difference between the selling price of shares sold to employees and the face value of shares as prescribed in Clause 1 of this Article shall be deducted from the state capital value upon the final settlement as at the official date of conversion into a joint-stock company;

dd) The shares purchased by employees at preferential prices under this Clause must be held and may not be transferred within 03 years from the date of payment for such purchased shares;

e) Total value of shares sold at preferential prices to employees calculated at the face value of shares shall not exceed the owner’s equity as recorded in accounting books as at the date of enterprise valuation.

2. Employees working under employment contracts and managers of the equitized enterprise who, as at the date of enterprise valuation, are required to be retained by the enterprise and commit to continue working for the enterprise for a minimum period of 03 years (from the date on which the enterprise is issued with the initial enterprise registration certificate) shall be entitled to purchase additional shares in accordance with the following provisions:

a) An employee may purchase an additional amount of up to 200 shares for each year of continued working as committed, provided that total number of shares purchased by such an employee shall not exceed 2.000 shares.

Particularly, an employee who is a highly qualified expert with a high level of professional expertise may purchase an additional amount of up to 500 shares for each year of continued working as committed, provided that the total number of shares purchased such an employee shall not exceed 5.000 shares. The equitized enterprise shall, based on the specific characteristics of its business lines, develop and decide the criteria for determining highly qualified experts with a high level of professional expertise; such criteria must be unanimously agreed upon by the Conference of the enterprise's employees prior to the equitization.

b) The selling price of shares additionally sold to employees as prescribed in Point a of this Clause shall be the starting price approved by the owner’s representative agency in the equitization plan;

c) Each employee shall only be entitled to purchase a specific quantity of additional shares as prescribed in Point a this Clause;

d) The shares additionally purchased by an employee as prescribed in Point a Clause 2 of this Article shall be converted into ordinary shares after the committed working period expires.

In case the joint-stock company changes its structure or technology, or relocates or narrows its production or business facilities as requested by a regulatory authority, resulting in an employee’s termination of the employment contract, resignation, or loss of job in accordance with the provisions of the Labor Code prior to the expiration of the committed working period, the number of shares additionally purchased by such an employee shall be converted into ordinary shares. If an employee wishes to sell their shares back to the enterprise, the joint-stock company shall consider repurchasing such shares at a price close to the prevailing market price.

An employee who terminates the employment contract prior to the expiration of his/her committed working period shall sell the entire number of his/her additionally purchased shares back to the joint-stock company at a price close to the prevailing market price but not exceeding the purchase price of such shares at the date of equitization;

dd) The number of additional shares an employee is entitled to purchase as prescribed in Point a Clause 2 of this Article shall be determined based on the period he/she commits to continue working for the enterprise, up to the statutory retirement age applicable to employees working under normal working conditions as provided for in the Labor Code.

3. Employees of an enterprise that undergoes restructuring and conversion into a joint-stock company through DATC as prescribed in Clause 2 Article 6 of this Decree shall be eligible to the policies specified in Clauses 1 Clause 2 of this Article, subject to the specific conditions of such enterprise and the restructuring plan approved by the competent authority.

4. Employees wishing to purchase shares in addition to those they are entitled to purchase as prescribed in Clauses 1 and 2 of this Article shall subscribe for shares through the public auction in accordance with the same regulations as other investors.

1. Employees working under employment contracts and employees of the equitized enterprise who, as at the date of enterprise valuation, have been appointed as representatives of the enterprise’s stakes in other enterprises and cannot be arranged employment at the joint-stock company in accordance with the labor utilization plan shall be entitled to the policies applicable to redundant employees as prescribed by laws.

2. The owner’s representative agency shall consider issuing a decision on assignment of positions to the enterprise managers. In the event that the owner’s representative agency, after having taken all possible measures, is unable to arrange employment for such managers, they shall be entitled to policies applicable to workforce downsizing for officials and civil servants in accordance with regulations of law.

3. The Board of Members or the President of the state-owned enterprise shall consider and decide the assignment of positions to managers of the Grade-II enterprise. In he event that, after all possible measures have been taken, employment cannot be arranged, the relevant policies shall be applied in accordance with provisions of the Labour Code.

1. State-owned enterprises shall apply the provisions set out in Chapter II of this Decree to making of decisions on the conversion of enterprises in which they hold 100% of the charter capital into joint-stock companies in accordance with their actual circumstances and conditions, while ensuring compliance with the following rules:

a) Such conversion shall be carried out in association with the objective of enhancing the enterprise’s business efficiency, and its production and business capacity, and competitiveness;

b) Rights and interests of employees and other relevant parties must be ensured;

c) Such conversion must be carried out in accordance with the law and in a manner that prevents loss of capital and assets of the state-owned enterprise.

2. By the date of enterprise valuation, any unused assets, idle assets, or assets pending liquidation of a grade-II enterprise which have not yet been disposed of, except for those assets which are not allowed to be excluded as prescribed in Clause 3 Article 16 of this Decree, shall be recorded as the enterprise’s business expenses according to their book values, and transferred to the parent company for continued management and liquidation or transfer as prescribed.  The proceeds earned from the liquidation, transfer or sale of assets shall be recorded as business income of the parent company.

3. The value of a grade-II enterprise’s stakes in another single-member limited liability company (hereinafter referred to as “grade-III enterprise”) shall be determined according to provisions of Points a, b and c Clause 3 Article 34 of this Decree.

4. Based on the enterprise valuation results determined by the consulting firm and the opinions given by the owner’s representative agency, the State Audit Office of Vietnam shall conduct an audit of the enterprise valuation results and settlement of financial issues prior tor valuation of grade-II enterprises that have the owner's equity of at least VND 1.800 billion as recorded in accounting books as at the date of enterprise valuation.

5. The proceeds earned from offering of shares of a grade-II enterprise, as specified in the final settlement approved by a competent authority, that remain after deducting the cost of shares offered (book value), equitization costs, benefits paid to redundant employees, preferential treatment for employees and tax obligations (if any) shall be transferred to the parent company - the grade-I enterprise within 05 working days from the day on which a competent authority’s decision is issued.

If the proceeds from the equitization of the grade-II enterprise are not sufficient to cover the expenses incurred from the equitization of such enterprise (including equitization costs, and expenses incurred from provision of benefits paid to redundant employees, preferential treatment for employees), the parent company shall provide funding for covering the deficit, and record such provided funding as its financial expenses.

1. The Prime Minister shall:

a) Make decisions on equitization of wholly state-owned economic groups, state corporations, and enterprises listed in Appendix III enclosed herewith at the request of owner’s representative agencies and the approved 5-year state capital restructuring plan;

b) Make decisions on approval for the equitization plans of the enterprises specified at Point a Clause 1 of this Article;

c) Make decisions on appointment of owner’s representative agencies in charge of managing the state capital in the enterprises specified in Point a Clause 1 this Article, after equitization.

2. Each owner’s representative agency shall:

a) Based on the plan for restructuring of state capital in enterprises under its management, make decisions on the equitization of grade-I enterprises under its management, except for the enterprises specified at Point a Clause 1 of this Article;

b) Establish Steering Boards to assist the Prime Minister in considering and making decisions on the equitization of the enterprises specified at Point a Clause 1 of this Article, and assist the owner’s representative agency in conducting equitization as prescribed in this Decree;

c) Make decisions on selection of consulting firms in charge of equitization tasks, and auction organizations, and decisions to announce the enterprise value of the enterprises specified in Point a Clause 1 this Article.

Submit the equitization plans of the enterprises specified at Point a Clause 1 of this Article to the Prime Minister for approval;

Assign the Board of Members/Company’s President of grade-I enterprises to make decisions on selection of consulting firms in charge of equitization tasks and auction organizations when conducting the equitization of the enterprises specified in Point a Clause 2 this Article;

d) Announce the enterprise value, and make decisions on approval for the equitization plans of the enterprises specified in Point b Clause 2 this Article, accompanied with draft charters of the joint-stock companies developed in accordance with provisions of the Law on Enterprises and relevant laws;

dd) Issue decisions on approval of the debt sale plans for enterprise restructuring and equitization plans of the enterprises sustaining losses after reaching agreements with DATC and creditors on the debt sale plans for enterprise restructuring as prescribed in Clause 2 Article 6 of this Decree.

Time limit for completing such approval of the debt sale plans for enterprise restructuring and equitization plans for enterprises sustaining losses as prescribed in Clause 2 Article 6 of this Decree shall not exceed 03 months from the date of announcement of the enterprise value;

e) Make decisions on modification of the equitization plans and adjustment of the state capital in joint-stock companies as prescribed; make decisions on transfer of asset surplus (if any) to DATC according to the provision of Clause 4 Article 12 of this Decree;

g) Make decisions on approval of labor utilization plans and provision of benefits to redundant employees of the equitized enterprises;

h) Within the time limit prescribed in Clause 4 Article 23 of this Decree, the owner’s representative agency shall cooperate with relevant authorities in approving the final financial settlement, final settlements of equitization costs, expenses incurred from provision of benefits to redundant employees, and proceeds earned from equitization, and issuing decisions to announce the actual state capital value as at the date in which the joint-stock company is issued with the initial enterprise registration certificate (including the enterprises specified in Point a Clause 1 of this Article);

i) Provide guidelines on and inspect, supervise the equitization of the entities under its management in accordance with the provisions of this Decree;

k) Consider and resolve difficulties, complaints and denunciations concerning the equitized enterprises within its competence in accordance with regulations of law;

l) Direct equitized enterprises to submit applications for registration as public company where the equitized enterprise meets the eligibility conditions for a public company, carry out procedures for registration and depositing of shares won at auctions with Vietnam Securities Depository and Clearing Corporation (VSDC) and procedures for registration for trading and listing of shares on securities trading system in accordance with regulations of law on securities;

m) Direct equitized enterprises to prepare required documents and transfer rights of representation of state capital in joint-stock companies (after conversion from state-owned enterprises) to other owner’s representative agencies or the State Capital Investment Corporation (SCIC) as prescribed;

Make decisions on approval for criteria and selection of strategic investors of enterprises that offer shares to strategic investors, including the enterprises prescribed in Point a Clause 1 of this Article.

3. Authority, responsibilities and composition of Steering Boards:

a) A Steering Board shall have the following authority and responsibilities:

a1) Assist authorities issuing the equitization decisions in directing and carrying out equitization for one or some enterprises as prescribed in this Decree.

a2) Use the seal of the owner’s representative agency when performing tasks.

a3) Establish the Assisting Team to carry out equitization tasks.

a4) Direct the enterprise, based on the approved plan for restructuring of state capital in enterprises, to:

Proactively prepare legal documents on the enterprise’s assets (including housing and land); the Land Use Status Report in respect of the land areas under the enterprise’s management and use in accordance with regulations of law upon equitization as at the date of enterprise valuation; carry out asset inventory and reconciliation of debts as at the date of preparation of financial statements as prescribed by law.

Prepare and submit the equitization schedule (including the time limit for each task) to the owner’s representative agency for approval. In case of failure to comply with the equitization schedule, the Steering Board shall be deemed not to have fulfilled its tasks.

a5) Direct the settlement of financial issues, labor issues, and organize the enterprise valuation according to the provisions of this Decree.

a6) Request the owner’s representative agency to decide the method of initial offering of shares.

a7) Direct the preparation of the equitization plan and the first draft Charter of the   joint-stock company.

a8) Direct the preparation of the labor utilization plan for submission to the owner’s representative agency to seek its approval.

a9) Review and report to the owner’s representative agency, or the Board of Members/Company’s President of grade-I enterprises, for making decisions on the selection of consulting firms and auction organizations;

a10) Review and report to the owner’s representative agency for announcement of the enterprise value and issuance of decision on the approval of the equitization plan within its competence.

a11) Direct the equitized enterprise to cooperate with auction organizations as prescribed.

a12) Direct the equitized enterprise to determine the proceeds earned from equitization in accordance with the form of equitization, make and submit final settlements (including the final financial settlement as at the official date of conversion into a joint-stock company, the final settlement of equitization costs, and final settlement of expenses incurred from provision of benefits to redundant employees, and preferential treatment for employees and the enterprise’s trade union) to competent authorities to seek their approval.

a13) Prepare and submit consolidated reports on share offering results to the owner’s representative agency.

a14) Review and request the owner’s representative agency to issue decisions on modification of the equitization plan or decisions on adjustment of the enterprise value after conversion into a joint-stock company.

a15) Cooperate with relevant authorities to review and submit reports to the owner’s representative agency to issue decisions on approval of financial statements as at the official date of conversion into a joint-stock company; the final settlement of equitization costs; the final settlement of expenses incurred from provision of benefits to redundant employees; the final settlement of proceeds earned from equitization, and decision to announce the actual state capital value as at the date on which the joint-stock company is issued with the initial enterprise registration certificate.

a16) Consider and request the owner’s representative agency to appoint a representative for the state capital/capital of the grade-I enterprise in the equitized enterprise.

a17) Direct the equitized enterprise to promptly and fully publish the equitization schedule on the Government’s web portal and send it to the Ministry of Finance of Vietnam and the Steering Board for Enterprise Innovation and Development for monitoring purpose;

b) The composition of a Steering Board shall be decided by a Minister, head of ministerial agency or governmental agency, or Chairperson of the relevant provincial-level People’s Committee.

In case of the enterprises specified in Point a Clause 1 this Article, members of the Steering Board shall also include representatives of the Steering Board for Enterprise Innovation and Development and the Ministry of Finance of Vietnam at the request of the owner’s representative agency.

4. The trade union of the equitized enterprise shall cooperate with the Steering Board in:

a) Disseminating information on, and mobilizing officials and employees of the equitized enterprise to follow, equitization policies of the State;

b) Supervising the equitization process;

c) Appointing the representative of the trade union’s capital to apply for the position of a member of the Board of Directors or Board of Controller of the joint-stock company in accordance with regulations of law;

d) Using the trade union’s fund to purchase shares of the enterprise, managing the enterprise as a shareholder, and protecting rights and interests of employees working in the enterprise in accordance with regulations of law.

Ministers, heads of ministerial agencies, heads of Governmental agencies, Chairpersons of provincial-level People’s Committees, Boards of Members/Presidents of parent companies of economic groups, state corporations, or parent companies within parent company-subsidiary groups shall promptly submit reports to the Steering Board for Enterprise Innovation and Development and the Ministry of Finance of Vietnam on relevant contents in the course of equitization, including: decision to announce the enterprise value and any adjustments thereof, equitization plan, decision on approval of the state capital value as at the official date of conversion into a joint-stock company, and final settlements for transfer to the joint-stock company; and also direct equitized enterprises to make full and timely disclosures of the information stated in clause 1 Article 13 of this Decree.

1. Develop the equitization plan

a) Establish the Steering Board and Assisting Team.

a1) Based on the approved plan for restructuring of state capital in enterprises, the competent authority shall issue an equitization decision and decision to establish the Steering Board, accompanied with the plan/roadmap for implementation of equitization tasks.

a2) The head of the Steering Board shall select and make a decision on establishment of the Assisting Team in charge of equitization tasks within 05 working days from the day on which the decision on establishment of the Steering Board is issued.

a3) After the competent authority issues an equitization decision, the Steering Board and the Assisting Team shall cooperate with the equitized enterprise and consulting firm (if any) to decide to follow procedures for contacting and exchanging information with investors about the enterprise’s business and financial status, and demands for selection of strategic investors, etc. which are used to serve their decisions to make investments in the enterprise.

b) Prepare relevant documents as required.

The Steering Board shall direct the Assisting Team to cooperate with the enterprise in preparing the following documents:

b1) Legal documents on establishment of the enterprise.

b2) Legal documents on assets, sources of capital and debts of the enterprise.

b3) Financial statements and tax finalizations of the enterprise as at the date of enterprise valuation. 

b4) Estimate of equitization costs as prescribed.

b5) The Land Use Status Report in respect of the land areas under the enterprise’s management and use as at the date of enterprise valuation.

b6) List of employees and labor utilization plan.

b7) Selected methods, forms and date of enterprise valuation which are suitable for the enterprise’s conditions and comply with relevant written guidelines on equitization.

c) The Steering Board shall direct the Assisting Team to cooperate with the equitized enterprise in preparing and submitting relevant documents to the owner’s representative agency for approval of estimate of equitization costs and decision on appointment of the consulting firm in charge of conducting equitization as prescribed;

d) Carry out inventory, settlement of financial issues and enterprise valuation.

d1) The equitized enterprise shall cooperate with the consulting firm in:

Carrying out asset inventory and classification, and making final financial settlement and tax finalizations, and cooperating with relevant authorities in settling financial issues as at the date of enterprise valuation.

Prepare the Land Use Status Report in respect of the land areas under the enterprise’s management and use in accordance with regulations of law.

Conduct the enterprise valuation.

d2) The Steering Board shall direct the Assisting Team to cooperate with the equitized enterprise and consulting firm in conducting the enterprise valuation as prescribed. Where the consulting firm has the function of enterprise valuation, it may be engaged on a package basis to provide all services, including formulation of the equitization plan, determination of the enterprise value, and organization of the share offering;

dd) Decide to approve and announce the enterprise value.

The Steering Board shall review the results of asset inventory and classification, and enterprise valuation, and submit a report on review results to the owner’s representative agency for issuing a decision to announce the enterprise value.

Where an enterprise is subject to audit as prescribed in this Decree, the Steering Board shall request the owner’s representative agency to decide the enterprise value, and send a written request, accompany with relevant documents, to the State Audit Office of Vietnam for the audit of enterprise valuation results given by consulting firms and settlement of financial issues before the official announcement of the enterprise value.  

The decision to announce the enterprise value shall clearly specify amounts of debts and assets excluded when determining the enterprise value to transfer to DATC as prescribed in Clause 2 Article 16, Clauses 2 and 3 Article 17 this Decree;

e) Complete and submit the equitization plan to a competent authority for approval.

e1) Based on the decision to announce the enterprise value and actual situation of the enterprise, the Steering Board shall direct the Assisting Team to cooperate with the enterprise and consulting firm in formulating the equitization plan. The equitization plan shall, inter alia, include the following contents:

Actual situation of the enterprise as at the date of enterprise valuation.

The enterprise valuation results and issues requiring further consideration.

Form of equitization and charter capital required to serve business operations of the joint-stock company.

Structure of charter capital, starting price and share offering methods.

Draft Charter on organization and operation of the joint-stock company formulated according to regulations of the Law on Enterprises and other legislative documents in force.

Plan for rearrangement of employees approved by the owner’s representative agency.

The business plan for the next 3 – 5 years.

The Land Use Status Report in respect of the land areas under the enterprise’s management and use in accordance with regulations of law.

e2) The Steering Board shall direct the Assisting Team and the equitized enterprise to cooperate with the consulting firm in publishing and sending the equitization plan to each division of the enterprise for reference before an (extraordinary) employees’ conference is held.

After completing the employees’ conference, the Assisting Team and the equitized enterprise shall cooperate with the consulting firm in completing the equitization plan for submission to the owner’s representative agency for approval.

e3) The Steering Board shall review and submit the equitization plan to the owner’s representative agency for approval within its competence.

If the enterprise has the actual enterprise value lower than the payables stated in Clause 2 Article 6 of this Decree, the owner’s representative agency shall direct the Steering Board and the enterprise to cooperate with DATC and creditors of the enterprise in developing a feasible and efficient debt sale plan for restructuring the enterprise. Based on the efficiency and feasibility of the debt sale plan, the owner’s representative agency shall issue a decision on approval of the debt sale plan for enterprise restructuring or decide to adopt another conversion form as prescribed by law.

2. Implement the equitization plan

a) The Steering Board shall direct the enterprise to cooperate with intermediate consulting firms in organizing offering of shares according to the approved equitization plan approved and provisions of this Decree;

b) The Steering Board shall direct the enterprise to sell shares at preferential prices to its employees and trade union (if any) according to the approved plan;

c) Based on results of offering of shares to the entities specified in the equitization plan, the Steering Board shall direct the enterprise to transfer the proceeds earned from equitization to the state budget as prescribed.

If shares are not fully sold up to the entities specified in the approved equitization plan, the Steering Board shall report it to the owner’s representative agency for making a decision on adjustment of the scale and structure of shares of the equitized enterprise;

d) The Steering Board shall request the owner’s representative agency to issue a decision on appointment of a representative of the capital of the equitized enterprise having state capital to continue engaging in the joint-stock company and take responsibility to perform rights and obligations of the representative of state capital’s owner as prescribed in laws.

3. Finalize the conversion into a joint-stock company

a) Hold the first FMS and follow the enterprise registration procedures.

a1) The Steering Board shall direct the Assisting Team, the representative for state capital (if any) and the enterprise to convene the first GMS for ratifying the Charter on organization and operation, and business plan, and for voting for members of the Board of Directors, Board of Controllers, and the management of the joint-stock company.

a2) The Board of Directors of the joint-stock company shall, based on the results of the first GMS, apply for enterprise registration.

b) Make final settlement and transfer between the enterprise and the joint-stock company.

b1) Within 90 days from the date of issuance of the initial enterprise registration certificate, the Steering Board shall direct the Assisting Team and the enterprise to prepare financial statements as at the day on which the joint-stock company is issued with the initial business registration certificate, carry out tax finalization, arrange for the audit of the financial statements, make final settlement of equitization costs, and submit reports on such contents to the owner’s representative agency.

b2) Based on the state capital value re-determined as at the date of enterprise registration by the owner’s representative agency, the Steering Board shall direct the Assisting Team and the enterprise to carry out transfer between the enterprise and the joint-stock company.

b3) Organize the inauguration of the joint-stock company and make the public announcement on the mass media as prescribed.

The authority issuing the equitization decision, the Steering Board, the Assisting Team, and the enterprise may perform multiple steps simultaneously in order to expedite the equitization process.

1. A wholly state-owned enterprise may be converted into a multi-member limited liability company when it satisfies the same conditions applicable to equitized enterprises (this provision shall not apply to conversion of agriculture and forestry companies).

2. Conversion of a wholly state-owned enterprise into a multi-member limited liability company shall be carried out by transferring a part of state capital in the converted enterprise.

1. Settlement of financial issues, determination and adjustment of the enterprise value, engagement of consulting firms in the enterprise valuation, determination of starting price and formulation of the conversion plan shall comply with the  regulations on conversion of wholly state-owned enterprises into joint-stock companies set out in Chapter II of this Decree.

2. Based on the charter capital structure, the percentage of state capital to be sold, and the criteria for selection of investors approved by the competent authority under the Plan for conversion into a multi-member limited liability company, an auction shall be conducted to sale of the state capital in accordance with regulations on conversion of wholly state-owned enterprises into joint-stock companies set out in Chapter II of this Decree. Successful bidders shall be selected in descending order and limited to 50 investors as prescribed in Clause 5 Article 51 of this Decree.

A conversion plan shall, inter alia, include the following contents:

1. The actual status of the enterprise as at the date of enterprise valuation.

2. The enterprise valuation results and issues requiring further consideration.

3. Criteria for the selection of investors receiving transfer of state capital, including those criteria relating to business lines, fields of operation, financial, corporate governance, technology, and market capacity.

4. Charter capital required for the enterprise’s business operations.

5. Structure of charter capital, starting price and method of transfer of state capital which adhere the following rules: Based on scale and nature of business lines, and development requirements, the minimum amount of capital to be transferred to each investor must be determined so as to ensure that no more than 50 investors will be selected as prescribed by the Law on enterprises. The conversion plan shall stipulate the minimum amount of capital to be transferred to each investor, ensuring non-discriminatory treatment among investors from all economic sectors.

6. The draft Charter on organization and operation of the multi-member limited liability company that is drawn up in accordance with the Law on Enterprises and other legislative documents in force.

7. The plan for rearrangement of existing employees.

8. The business plan for the following 3-5 years.

9. The Land Use Status Report which is prepared by the enterprise in respect of the land areas under the enterprise’s management and use in accordance with regulations of law.

1. For state-owned groups, corporations and enterprises listed in Appendix III enclosed herewith:

a) Based on the plan for restructuring of state capital in enterprises approved by the Prime Minister as prescribed in Point b Clause 1 Article 101 of this Decree, the Prime Minister shall decide the conversion and approve the conversion plans at the request of the owner’s representative agencies and the opinions given by the Ministry of Finance, Ministry of Home Affairs, Ministry of Justice, and supervisory ministries; issue decisions on appointment of owner’s representative agencies to manage the state capital in enterprises after conversion;

b) The owner’s representative agency shall decide to select the consulting firm in charge of valuation, and the auction organization in charge of conducting the sale of state capital, and shall enter into contracts or authorize the enterprise to enter into contracts with such selected entities; consider approving the plan for management of existing employees and settlement of benefits for redundant employees; announce the enterprise value; submit the plan for conversion into multi-member limited liability company to the Prime Minister for approval; issue decisions to approve the final financial settlement; the final settlement of conversion costs; expenses incurred from provision of benefits to redundant employees; proceeds from conversion, and decision to announce the actual state capital as at the date on which the multi-member limited liability company is issued with the initial enterprise registration certificate;

c) The owner’s representative agency shall deal with any difficulties, complaints and denunciations concerning the conversion of enterprise within its competence and in accordance with regulations of law in force;

d) The owner’s representative agency shall instruct and inspect the conversion process according to the contents prescribed in this Decree.

2. In respect of an enterprise established under a decision issued by the owner’s representative agency or assigned to it for management, except those enterprises specified in point a clause 1 of this Article, the owner’s representative agency shall:

a) Based on the plan for restructuring of state capital in enterprises under its management, decide the approval of the enterprise conversion plan;

b) Decide to select the consulting firm in charge of valuation, and the auction organization in charge of conducting the sale of state capital, and shall enter into contracts or authorize the enterprise to enter into contracts with such selected entities; announce the enterprise valuation results; decide to approve the plan for conversion into a multi-member limited liability company; issue decisions to approve the final financial settlement; the final settlement of conversion costs; expenses incurred from provision of benefits to redundant employees; proceeds from conversion, and decision to announce the actual state capital as at the date on which the multi-member limited liability company is issued with the initial enterprise registration certificate;

c) The owner’s representative agency shall discharge the responsibilities specified in Points c, d Clause 1 of this Article.

3. Authority and responsibilities of the converted enterprise:

a) Proactively prepare the documents for developing the conversion plan; organize settlement of financial issues and enterprise valuation in accordance with regulations of law;

b) Submit to the owner’s representative agency for decision or approval within its competence the contents specified in point b clause 1 of this Article or point b clause 2 of this Article;

c) Enter into contracts with the consulting firm in charge of enterprise valuation and the auction organization in charge of conducting sale of the state capital with authorization of the owner’s representative agency;

d) Organize the implementation of the conversion plan and complete the conversion into a multi-member limited liability company;

dd) Follow procedures for registration of conversion into a multi-member limited liability company with the business registration authority. The application for enterprise registration shall be prepared in accordance with the Government's regulations on enterprise registration, in which the transfer contract or documents proving completion of transfer shall be replaced with the decision to announce the actual state capital in the enterprise and decision to appoint the representative for state capital (if any) issued by the owner’s representative agency.

1. Employees who continue employment with the enterprise after conversion shall enter into new employment contracts.

2. Employees who wish to terminate employment contracts shall be provided with redundancy or severance allowances in accordance with regulations on labour or policies for employees redundant after conversion of wholly state-owned enterprises.

3. Employees who are eligible for retirement benefits shall be treated in accordance with regulations of the Law on social insurance and provided with other benefits in accordance with regulations of the Labour Code.

4. The Chairperson and members of the Board of Members, or company’s President, General Director (Director), and controllers who are working under appointment regime shall be considered by the owner’s representative agency on a case-by-case basis for assignment of tasks after the conversion of enterprise. Where arrangement of suitable positions for persons who are working under appointment regime cannot be carried out, such persons shall be treated according to downsizing policies as prescribed.

After deducting conversion costs and benefits paid to employees and managerial position holders, the remaining proceeds earned from the conversion of a wholly state-owned enterprise into a multi-member limited liability company shall be paid to the state budget of appropriate level in accordance with applicable regulations on hierarchical management of state budget.

1. An enterprise that is a joint-stock company more than 50% but less than 100% of the charter capital of which is held by the State may be converted into a single-member limited liability company in the following forms:

a) A shareholder receives transfer of the entire shares from the other shareholders;

b) An organization or individual other than a shareholder receives transfer of shares from all shareholders;

c) Only 01 shareholder remains in the company.

2. An enterprise that is a joint-stock company more than 50% but less than 100% of the charter capital of which is held by the State may be converted into a multi-member limited liability company in the following forms:

a) Conversion into a multi-member limited liability company without raising additional capital or transferring shares to other organizations or individuals;

b) Conversion into a multi-member limited liability company by raising additional capital from other organizations and individuals;

c) Conversion into a multi-member limited liability company by transferring all or part of shares to other organizations and individuals;

d) Only 02 shareholders remain in the company;

dd) Conversion by combining the forms specified in Points a, b and c of this Clause and other forms.

3. An enterprise that is a multi-member limited liability company more than 50% but less than 100% of the charter capital of which is held by the State may be converted into a joint-stock company in the following forms:

a) Conversion into a joint-stock company without raising additional capital from, or selling stakes to, other organizations and individuals;

b) Conversion into a joint-stock company by raising additional capital from other organizations and individuals;

c) Conversion into a joint-stock company by selling all or part of stakes to one or some organizations and individuals;

d) Conversion by combining the forms specified in Points a, b and c of this Clause and other forms.

1. Conversion of enterprises in the forms specified in Article 55 of this Decree shall be carried out in accordance with provisions of the Law on Enterprises and in line with the criteria for classification of state-owned enterprises and state-invested enterprises, as set out in the Prime Minister's decision.

2. The starting price and the method of transferring shares or state capital for conversion of enterprises shall be determined in accordance with regulations on the transfer of state capital in enterprises as set forth in Chapter V of this Decree.

3. The representative for state capital in the enterprise shall develop a plan for the transfer/acquisition of shares or capital contributions and submit it to the owner’s representative agency for its review and decision in order to implement the enterprise conversion plan. For the conversion of an enterprise listed in Appendix III enclosed herewith, based on the plan received from the representative for state capital, the owner’s representative agency shall submit a report thereon to the Prime Minister to seek his review and decision.

A conversion plan shall, inter alia, include the following contents:

1. The actual status of the enterprise as at the date of enterprise valuation.

2. The enterprise valuation results and issues requiring further consideration.

3. Criteria for selection of investors receiving transfer of state capital, including those criteria relating to business lines, fields of operation, financial, corporate governance, technology, and market capacity.

4. Charter capital required for the enterprise’s business operations and charter capital structure of the enterprise after conversion.

5. Draft Charter on organization and operation of the enterprise after conversion formulated according to regulations of the Law on Enterprises and other legislative documents in force.

6. The business plan for the next 3-5 years.

The proceeds earned from the transfer of shares or stakes of the State for the purpose of enterprise conversion that remain after deducting all costs incurred from such transfer shall be paid to the state budget of appropriate level in accordance with applicable regulations on hierarchical management of state budget.

1. Consolidation of enterprises:

Two or more wholly state-owned enterprises and enterprises 100% of charter capital of which is held by wholly state-owned enterprises (hereinafter referred to as “consolidating enterprises”) may be consolidated into a new wholly state-owned enterprise (hereinafter referred to as “consolidated enterprise”), after which the consolidating enterprises shall cease to exist. Cases of enterprise consolidation:

a) Two or more wholly state-owned enterprises are consolidated into a new enterprise;

b) One or more wholly state-owned enterprises and enterprises 100% of the charter capital of which is held by wholly state-owned enterprises are consolidated into a new wholly state-owned enterprise.

2. Merger of enterprises:

One or some wholly state-owned enterprises and enterprises 100% of charter capital of which is held by wholly state-owned enterprises (hereinafter referred to as “acquired enterprises”) may be merged into another wholly state-owned enterprise (hereinafter referred to as “acquiring enterprise”) by transfer all of the acquired enterprises’ assets, rights, obligations and lawful interests to the acquiring enterprise, after which the acquired enterprises shall cease to exist. Cases of enterprise merger:

a) One or some wholly state-owned enterprises are merged into another wholly state-owned enterprise;

b) One or some enterprises 100% of charter capital of which is held by wholly state-owned enterprises are merged into a wholly state-owned enterprise.

3. Split-up of wholly state-owned enterprises: 

A wholly state-owned enterprise (hereinafter referred to as “parent enterprise”) may split all of its existing assets, rights and obligations to establish two or more new wholly state-owned enterprises, after which the parent enterprise shall cease to exist.

4. Split-off of wholly state-owned enterprises: 

A wholly state-owned enterprise (hereinafter referred to as “parent enterprise”) may split part of its existing assets, rights and obligations to establish one or some new wholly state-owned enterprises without ceasing the existence of the parent enterprise.

5. Financial settlement upon consolidation, merger, split-up or split-off of enterprises:

a) Consolidation, merger, split-up or split-off of enterprises shall be carried out without revaluation of the enterprises involved; <0}

b) Pursuant to a decision issued by the competent authority as prescribed in Article 61 of this Decree, the enterprise established from the consolidation, merger, split-up or split-off shall be responsible for preparing financial statements as at the effective date of such decision. To be specific:

In case of consolidation or merger of enterprises, the financial statements shall be prepared on the principle that the entire capital and assets of the consolidating or acquired enterprises are fully aggregated.

In case of split-up or split-off of an enterprise, the financial statements of the enterprises after the split-up or split-off shall be prepared on the basis of the results of allocation of capital and assets of the parent enterprise according to the split-up or split-off scheme prescribed in clause 2 Article 62 of this Decree.

An enterprise specified in Article 59 of this Decree may be consolidated, merged, split up or split off if all of the following conditions are met:

1. Any new enterprise established from the split-up or split-off must meet all of the following conditions:

a) Its business lines and fields fall within the scope of state capital investment in accordance with regulations of law on management and investment of state capital in enterprises;

b) It has sufficient charter capital as required upon establishment of enterprises;

c) It has a valid application as prescribed in Article 62 of this Decree;

d) The establishment of such an enterprise is conformable with the socio-economic development strategies and plans, and the national sector planning.

2. Consolidation and merger of enterprises must comply with the Law on Competition in respect of consolidation and merger of enterprises.

1. The Prime Minister shall decide the consolidation, merger, split-up or split-off of economic groups, state corporations and state-owned enterprises listed in Appendix III enclosed herewith at the request of the owner’s representative agencies, including the following cases:

a) Consolidation, merger, split-up or split-off of parent companies of economic groups or state corporations;

b) Consolidation or merger of wholly state-owned enterprises under the management of the same or different owner’s representative agencies into the parent company of an economic group or state corporation;

c) Consolidation or merger of enterprises 100% of the charter capital of which is held by the parent company of an economic group or state corporation into/with such parent company;

d) Consolidation or merger of enterprises 100% of the charter capital of which is held by other wholly state-owned enterprises into/with the parent company of an economic group or state corporation.

2. Based on the plan for restructuring of state capital in enterprises under its management, the owner’s representative agency shall decide the consolidation, merger, split-up or split-off of wholly state-owned enterprises under its management. In cases of consolidation or merger of wholly state-owned enterprises under the management of different owner’s representative agencies, one of such owner’s representative agencies shall decide the consolidation or merger on the basis of written consent obtained from the remaining owner’s representative agencies, except for the cases specified in Clause 1 of this Article.

3. The owner’s representative agency shall decide the merger of a wholly state-owned enterprise under its management with enterprises 100% of the charter capital of which is held by such enterprise. In cases of merger between a wholly state-owned enterprise and an enterprise 100% of the charter capital of which is held by another wholly state-owned enterprise, the owner’s representative agency of the acquiring enterprise shall issue a merger decision on the basis of written consent obtained from the parent company of the acquired enterprise.

4. The Board of Member/Company’s President of a wholly state-owned enterprise shall decide the consolidation, merger, split-up and split-off of enterprises 100% of the charter capital of which is held by such wholly state-owned enterprise. In cases of consolidation or merger of enterprises 100% of the charter capital of which is held by different wholly state-owned enterprises, the Board of Member/Company’s President of one of such wholly state-owned enterprises shall decide the consolidation or merger on the basis of written consents obtained from Boards of Member/Company’s Presidents of the other wholly state-owned enterprises.

1. An application for consolidation, merger, split-up or split-off of enterprises shall include:

a) An application form for consolidation, merger, split-up or split-off of enterprises;

b) The scheme for consolidation, merger, split-up or split-off of enterprises;

c) The audited financial statements of the previous year and the financial statements of the most recent quarter preceding the date of consolidation, merger, split-up or split-off of the enterprises involved;

d) The draft Charter of every new enterprise established after consolidation, split-up or split-off; The draft Charter of the enterprise after the merger, if amended;

dd) The draft consolidation or merger contract which is prepared according to Article 200 and Article 201 of the Law on Enterprises in case of consolidation or merger of enterprises;

e) Other documents concerning the consolidation, merger, split-up or split-off of enterprises (if any).

2. The scheme for consolidation, merger, split-up or split-off of enterprises shall, inter alia, include the following contents:

a) Names and addresses of the enterprises before and after the consolidation, merger, split-up or split-off;

b) The necessity of the consolidation, merger, split-up or split-off; the conformity of such consolidation, merger, split-up or split-off with the socio-economic development strategies and plans, and national sector planning;

c) The enterprise’s charter capital after consolidation, merger, split-up or split-off;

d) The labour arrangement and use plan;

dd) The plan for financial settlement, transfer of capital and assets, and settlement of rights and obligations of the enterprises involved in the consolidation, merger, split-up or split-off;

e) The time limit for completing the consolidation, merger, split-up or split-off;

g) Where new enterprises are established from the consolidation, split-up or split-off, the scheme for consolidation, split-up or split-off of enterprises shall also include the contents of the scheme for establishment of such new enterprises in accordance with the Government’s regulations on management and investment of state capital in enterprises.

1. Procedures for consolidation or merger of enterprises decided by the Prime Minister:

a) The owner’s representative agency shall direct one of the consolidating enterprises (in case of consolidation) or the acquiring enterprise (in case of merger) to prepare an application for consolidation or merger of enterprises according to Article 62 of this Decree, give opinions about the consolidation or merger, and submit 01 set of the application comprising of original documents to the Ministry of Finance for appraisal;

b) Upon receipt of adequate application for consolidation or merger of enterprises from the owner’s representative agency, the Ministry of Finance shall play the leading role in collecting opinions from the Ministry of Home Affairs, the Ministry of Justice, the supervisory ministry, and relevant authorities (where necessary).

Within 15 working days from the receipt of the application for consolidation or merger of enterprises, relevant authorities shall provide their written opinions about issues under their management to the Ministry of Finance for consolidating and issuing an appraisal report;

c) Within 10 working days from the receipt of opinions from relevant authorities, the Ministry of Finance shall submit the report on appraisal of the application for consolidation or merger of enterprises to the Prime Minister, and also send it to the owner’s representative agency for review and providing necessary explanations.

If different opinions are given about the same content of the application, the Ministry of Finance shall hold a meeting with relevant authorities before submitting the appraisal report o the Prime Minister. The time limit for submitting the appraisal report may be extended for a period not exceeding 10 working days;

d) The owner’s representative agency shall consider and provide explanations regarding appraisal opinions given by the Ministry of Finance, complete the application and submit it to the Prime Minister for consideration and decision.

2. Procedures for consolidation or merger of enterprises decided by the owner’s representative agency:

a) Wholly state-owned enterprises shall cooperate with each other in preparing an application for consolidation or merger of enterprises according to Article 62 of this Decree, and submit it to the authority issuing establishment decision or assigned to manage such enterprises for consideration and decision;

b) Within 30 working days from the receipt of adequate application, the competent authority prescribed in Article 61 of this Decree shall appraise and approve the application, and issue a consolidation or merger decision.

3. After the consolidation or merger decision has been issued, the legal representatives of enterprises shall enter into the consolidation or merger contract, and assume responsibility to implement the consolidation or merger scheme.

The acquiring enterprise (in case of merger) or the wholly state-owned enterprise established after the consolidation shall follow procedures for enterprise registration in accordance with regulations of law.

1. Procedures for split-up or split-off of an enterprise decided by the Prime Minister:

a) The owner’s representative agency shall direct the enterprise to prepare an application for split-up or split-off according to Article 62 of this Decree, and submit 01 set of application comprising the original documents to the Ministry of Finance for appraisal;

b) Upon receipt of an adequate application for split-up or split-off of enterprise, the Ministry of Finance shall play the leading role in collecting opinions from the Ministry of Home Affairs, the Ministry of Justice, the supervisory ministry, and relevant authorities (where necessary).

Within 15 working days from the receipt of the application for split-up or split-off of enterprise, relevant authorities shall provide their written opinions about issues under their management to the Ministry of Finance;

c) Within 10 working days from the receipt of opinions from relevant authorities, the Ministry of Finance shall submit the appraisal report to the Prime Minister, and also send it to the owner’s representative agency for review and providing necessary explanations.

If different opinions are given about the same content of the application, the Ministry of Finance shall hold a meeting with relevant authorities before submitting the appraisal report o the Prime Minister. The time limit for submitting the appraisal report may be extended for a period not exceeding 10 working days;

d) The owner’s representative agency shall consider and provide explanations regarding appraisal opinions given by the Ministry of Finance, complete the application, and submit it to the Prime Minister for consideration and issuance of a split-up or split-off decision;

dd) After the split-up or split-off decision has been issued, the enterprise subject to the Prime Minister’s split-up or split-off decision shall organize the implementation of the split-up or split-off scheme.

2. Procedures for split-up or split-off of a wholly state-owned enterprise decided by the owner’s representative agency:

a) The enterprise shall prepare 01 set of application for split-up or split-off comprising the original documents as prescribed in Article 62 of this Decree, and submit it to the owner’s representative agency for appraisal;

b) Upon receipt of an adequate application, the owner’s representative agency shall play the leading role in collecting opinions from the Ministry of Finance, and the supervisory ministry (in case the wholly state-owned enterprise is established under a decision issued by the provincial-level People's Committee).

Within 10 working days from the receipt of the application, relevant authorities shall provide their written opinions about issues under their management to the owner’s representative agency;

c) Within 30 working days from its receipt of written opinions from the relevant authorities, the owner’s representative agency shall issue a decision on split-up or split-off of enterprise;

d) After the split-up or split-off decision has been issued, the enterprise shall organize the implementation of the split-up or split-off scheme.

3. Enterprises established after the split-up or split-off of enterprise shall follow procedures for enterprise registration in accordance with regulations of law.

1. A consolidation, merger, split-up or split-off decision must clearly specify rights and obligations inherited from the consolidating or acquired enterprises or the parent enterprise.

2. The consolidation, merger, split-up or split-off decision, and the consolidation or merger contract shall be sent to all creditors and employees of the enterprise(s) involved within 15 days from the day on which they are ratified.

1. Employees who continue employment with the enterprise after conversion shall enter into new employment contracts.

2. Employees who are eligible for retirement benefits shall be treated in accordance with regulations of the Law on social insurance and provided with other benefits in accordance with regulations of the Labour Code.

3. Employees who wish to terminate employment contracts shall be provided with redundancy or severance allowance in accordance with regulations on labour or policies for employees redundant after consolidation, merger, split-up or split-off of wholly state-owned enterprises.

4. The Chairperson and members of the Board of Members, or Company’s President, General Director (Director), and controllers who are working under appointment regime shall be considered by the owner’s representative agency on a case-by-case basis for assignment of tasks after the consolidation, merger, split-up or split-off. Where arrangement of suitable positions for persons who are working under appointment regime cannot be carried out, such persons shall be treated according to downsizing policies as prescribed.

1. Consolidation, merger, split-up and split-off of enterprises more than 50% but less than 100% of charter capital of which is held by the State shall be carried out in accordance with regulations of law on enterprises. The consolidation, merger, split-up and split-off of enterprises that are joint-stock companies registered for trading on the securities trading system or listed on the stock exchange must strictly comply with regulations of law on securities.

2. The owner’s representative agency shall direct the representatives of state capital in the enterprises involved to reach agreement on the preparation of the application for consolidation, merger, split-up or split-off according to Article 62 of this Decree; give its opinions on the application so that the representatives of state capital may organize the collection of opinions and submit it to the GMS or Board of Members for approval in accordance with regulations of law on enterprises.

1. One or some state-owned enterprises and enterprises whose stakes are held by state-owned enterprises may be consolidated or merged into a joint-stock company or multi-member limited liability company, including the following cases:

a) A wholly state-owned enterprise is consolidated or merged with an enterprise less than 100% of charter capital of which is held by the State;

b) A wholly state-owned enterprise is consolidated or merged with an enterprise less than 100% of charter capital of which is held by a state-owned enterprise;

c) An enterprise more than 50% but less than 100% of charter capital of which is held by the State is consolidated or merged with an enterprise 100% of charter capital of which is held by a state-owned enterprise.

2. The consolidation or merger in the cases specified in clause 1 of this Article shall comply with provisions of Section 1 Chapter IV of this Decree and provisions of Articles 200, 201 of the Law on Enterprises.

3. Authority to decide the consolidation or merger:

a) The Prime Minister shall decide the consolidation or merger in the cases specified in clause 1 of this Article with respect to the enterprises listed in Appendix III enclosed herewith at the request of the owner’s representative agencies;

b) An owner’s representative agency shall decide the consolidation or merger in the cases specified in clause 1 of this Article with respect to the state-owned enterprises under its management, except for the case specified in point a clause 3 of this Article.

4. Determination of enterprise value, share value, and the value of the state capital in an enterprise for the purpose of formulating the financial plan for conversion and transfer of capital and assets, and settlement of issues concerning the rights and obligations of the enterprises involved in the consolidation or merger shall comply with the provisions of Chapter II, Chapter V of this Decree, as appropriate to the practical circumstances and conditions, ensuring the harmonization of interests among the enterprises, the State, and investors. The owner’s representative agency or the Board of Members/Company’s President shall decide and assume responsibility for the selection of consulting firm in charge of valuation that must meet relevant standards as prescribed by law. The consulting firm in charge of valuation shall decide and take responsibility for the valuation method in accordance with regulations of law, ensuring objectivity, transparency, and the highest interests to the State; shall be legally responsible for the valuation results.

1. Authority to propose the dissolution:

a) Wholly state-owned enterprises;

b) Owner’s representative agencies;

c) Inspection authorities, auditing authorities, tax authorities or other state authorities that, during the performance of tasks within their competence, find that the enterprise falls into a case subject to dissolution.

2. Authority to issue dissolution decision:

a) The Prime Minister shall consider issuing decisions to dissolve the enterprises listed in Appendix III enclosed herewith at the request of the owner’s representative agencies and opinions given by the Ministry of Finance, the Ministry of Home Affairs, the Ministry of Justice of Vietnam and the supervisory ministries;

b) Based on the plan for restructuring of state capital in enterprises under its management, the owner’s representative agency shall consider issuing decisions to dissolve wholly state-owned enterprises under its management, except those subject to dissolution decisions issued by the Prime Minister.

1. Within 30 working days from the day on which the enterprise is determined to fall into one of the dissolution cases as prescribed in the law on enterprise, the person having authority to decide the dissolution shall issue a dissolution decision and establish a dissolution council to follow dissolution procedures.

2. A dissolution decision shall have the contents prescribed in Article 71 of this Decree.

3. After the dissolution decision has been issued:

a) The dissolution council shall perform the tasks prescribed in Article 73 of this Decree;

b) The subject enterprise shall perform the tasks prescribed in Article 74 of this Decree;

c) The enterprise’s supervisory tax authority shall issue a notice confirming the enterprise’s fulfillment of tax obligations within 10 working days from its receipt of the enterprise’s written request for such confirmation.  

4. The dissolution council shall automatically terminate its operation when the enterprise has completed dissolution procedures in accordance with regulations of law and the enterprise’s legal status on the National Enterprise Registration Database has been changed into “dissolved” by the business registration authority.

1. A decision to dissolve a wholly state-owned enterprises shall, inter alia, contain the following information:

a) Name and headquarters address of the dissolved enterprise;

b) Reasons for dissolution;

c) Time limit and procedures for finalization of contracts and payment of the enterprise’s debts;

d) Plan for settlement of obligations under employment contracts;

dd) Full name and signature of the Chairperson of the Board of Members or Company’s President of the dissolved enterprise.

2. Within 07 working days from its issue date, the dissolution decision must be sent to the dissolved enterprise and:

a) The enterprise’s employees;

b) The authority or organization proposing the dissolution;

c) Creditors, persons with related rights, obligations and interests in case the enterprise still has unpaid debts;

d) The specialized agencies, in the fields of finance, planning and investment, affiliated to the provincial-level People's Committee in case the dissolution is decided by the Chairperson of the provincial-level People's Committee;

dd) The enterprise’s supervisory tax authority;

e) The provincial-level People's Committee, statistical authority, the business registration authority of the province where the dissolved enterprise is headquartered, and the business registration authority of province where its branch or representative office is located.

1. The person having authority to decide the dissolution shall establish a dissolution council. Such a dissolution council shall have the function of advising the person having authority to decide the dissolution on the organization and implementation of the enterprise’s dissolution. The composition of the dissolution council shall comply with Clause 2 and Clause 3 of this Article.

2. The dissolution council of an enterprise specified in point a clause 2 Article 69 of this Decree shall comprise:

a) The Council’s Chairperson who is the head of the agency assigned to act as the owner’s representative;

b) Representatives of the Ministry of Finance, and the Ministry of Home Affairs;

c) Representatives of employees’ representative organization in the dissolved enterprise;

d) Chairperson of the Board of Members or Company’s President of the dissolved enterprise;

dd) Representatives of other authorities and organizations who may be invited to join the dissolution council as the case may be.

3. The dissolution council of an enterprise established under a decision issued by the owner’s representative agency or that is managed by the owner’s representative agency shall comprise:

a) The Council’s Chairperson who is the representative of the owner’s representative agency;

b) Representatives of affiliated units or specialized agencies of the owner’s representative agency in charge of managing finance, planning and labour affairs;

c) Representatives of employees’ representative organization in the dissolved enterprise;

d) Chairperson of the Board of Members or Company’s President of the dissolved enterprise;

dd) Representatives of other authorities and organizations who may be invited to join the dissolution council as the case may be.

1. The dissolution council is entitled to use the enterprise’s seal to serve the dissolution process and request relevant competent authorities to assist in recovery of assets.

2. After the dissolution decision has been issued and published on newspapers as prescribed, the dissolution council shall:

a) Revoke the seal of the dissolved enterprise to serve the dissolution process;

b) Carry out the dissolution process according to the ratified dissolution decision. The owner’s representative agency or the Board of Members/Company’s President shall directly organize the liquidation of the enterprise’s assets in accordance with relevant laws, unless otherwise prescribed by the enterprise's charter. Payment of debts of the dissolved enterprise shall comply with Clause 5 Article 208 of the Law on Enterprises;

c) Within 07 working days from the completion of the dissolution process and payment of debts of the dissolved enterprise, the dissolution council shall prepare and submit financial reports on the enterprise dissolution to the person who issued the dissolution decision; prepare an application for dissolution according to Article 210 of the Law on Enterprises and send it to the business registration authority where the enterprise is registered.

3. No later than 05 days from the effective date of the decision to establish the dissolution council, the Chairperson of the dissolution council shall open an account at the State Treasury in charge of the area where the dissolved enterprise is headquartered to deposit proceeds earned from the liquidation and transfer of assets and recovery of debts of the dissolved enterprise. The Chairperson of the dissolution council shall be the holder of this account.

4. All proceeds obtained from the dissolution, including cash capital, proceeds from the transfer or liquidation of assets, transfer of investment capital, and recovery of the dissolved enterprise’s debts, shall be deposited to the account opened by the dissolution council within the same date on which such proceeds are earned. Where the proceeds are earned after working hours, they shall be deposited on the following working day. Any intentional delay in depositing such proceeds shall give rise to compensation calculated at the on-demand savings interest rate announced by the bank and the person responsible for such depositing shall be subject to administrative disciplinary measures as prescribed.

Payment of dissolution costs and payment of debts to creditors shall comply with provisions of Article 77 of this Decree.

The amount of proceeds that remains after paying all debts shall be paid to the state budget (including any interest accrued from depositing the proceeds earned from the enterprise's dissolution). Within 05 days from the completion of payments to creditors, the dissolution council shall pay the entire remaining amount to the state budget.

1. Upon the issuance of a dissolution decision, the dissolved enterprise shall publicly post such decision at its headquarters, branches and representative offices, and publish it in at least 03 consecutive issues of a printed or electronic newspaper. Such decision should be accompanied by a notice stating the planned date of shutdown and time limit for creditors to present and reconcile their claims.  

2. From the effective date of the dissolution decision, the dissolved wholly state-owned enterprise shall:

a) Not perform any prohibited acts as prescribed in Article 211 of the Law on Enterprises;

b) Terminate business operations, the payment of debts, lending of assets to others, and holding of assets on behalf of others;

c) Close accounting books; carry out inventory of assets; check and reconcile receivables and payables; prepare financial statements as at the effective date of the dissolution decision;

d) Make a list of creditors and debts payable (sorted by secured debts, partially secured debts, and unsecured debts); a list of debtors and debts receivable (sorted by recoverable debts and irrecoverable debts);

dd) Send a written request for confirmation of fulfillment of tax obligations to the tax authority.

3. Within 30 working days from the effective date of the dissolution decision, the dissolved enterprise shall transfer the following to the dissolution council:

a) Financial statements, accounting books and documents concerning the dissolution; the enterprise’s lists of creditors and debtors;

b) All assets under the enterprise’s lawful ownership, management and use (including assets which are not yet recovered), assets held on behalf of others, and assets borrowed or leased.

1. Employees who are eligible for retirement benefits shall be treated in accordance with regulations of the Law on social insurance and provided with other benefits in accordance with regulations of the Labour Code.

2. Employees who wish to terminate employment contracts shall be provided with redundancy or severance allowances in accordance with regulations on labour or policies for employees redundant after reorganization of wholly state-owned enterprises.

3. The Chairperson and members of the Board of Members, or Company’s President, General Director (Director), and controllers who are working under appointment regime shall be considered by the owner’s representative agency on a case-by-case basis for assignment of tasks after the enterprise’s dissolution. Where arrangement of suitable positions for persons who are working under appointment regime cannot be carried out, such persons shall be treated according to downsizing policies as prescribed.

1. The dissolution of an enterprise must be completed within a maximum period of 01 year from the effective date of the dissolution decision. In the event that difficulties arise during the dissolution resulting in an extension of the above-mentioned dissolution period, the case should be reported to the person who issued the dissolution decision for consideration and decision in writing.

2. In case the enterprise registration certificate is revoked, the time limit for completion of dissolution process shall comply with regulations of the Law on Enterprises.

All proceeds earned from the dissolution of an enterprise shall be distributed in the following order:

1. Payment of the dissolution costs, including:

a) Costs associated with the finalization of economic contracts, and costs incurred in the recovery, transportation, preservation, and safekeeping of the assets of the dissolved enterprise;

b) Costs related to the organization of auctions for the sale of assets;

c) Costs or the arrangement, storage, and preservation of the records and documents of the dissolved enterprise, and other costs related to the enterprise’s dissolution. Such costs shall be determined based on actual payments as approved by the dissolution council‘s Chairperson who shall be responsible for his/her decisions;

d) Salaries and social insurance, health insurance and unemployment insurance contributions, which must be paid by the employer as prescribed by law, for managerial position holders, employees, and workers of the dissolved enterprise who are mobilized to participate in the dissolution process and assisting teams, but for a period not exceeding 12 months from the effective date of the dissolution decision.

Such costs must be supported by adequate documents in accordance with accounting policies in force.

2. Payment of outstanding salary debts, unpaid social insurance, health insurance and unemployment insurance contributions (if any), and other benefits of employees of the dissolved enterprise in accordance with employment contracts, or the collective bargaining agreement, the enterprise’s internal regulations, and regulations of law in force.

3. Payment of tax debts and other debts owed to the state budget.

4. Payment of secured debts (in the following order: entirely secured debts, followed by partially secured debts).

5. The amount that remains after making the above-mentioned payments shall be used to pay unsecured debts (excluding interests accrued from the issue date of the dissolution decision). Payments of unsecured debts to creditors may be made in several installments, with the amount paid in each installment determined on a pro rata basis according to the ratio between the total amount distributed in such installment and the total outstanding unpaid debts.

Proceeds obtained in subsequent rounds shall continue to be distributed in the above-mentioned order until fully paid.

For creditors maintaining accounts at commercial banks or the State Treasury, the dissolution council’s Chairperson shall follow procedures for transferring the required payments to their accounts. Where a creditor does not have such an account, the dissolution council’s Chairperson shall request the creditor to receive the payment directly or make such payment to the creditor by post. Postal service charges shall be included in the dissolution costs.

1. When a wholly state-owned enterprise operating in the field of agriculture and/or forestry that is duly established before the effective date of the Law No. 68/2025/QH15 and has its dissolution plan approved by a competent authority carries out the dissolution, it shall be entitled to receive state budget-derived financial support for fulfilling outstanding liabilities arising from the enterprise’s solvency, and for covering dissolution costs in case where the proceeds earned from sale of the enterprise’s assets are insufficient to meet payment obligations.

2. Wholly state-owned enterprises operating in the field of agriculture and/or forestry shall follow dissolution procedures in accordance with provisions of this Decree.

When settling financial issues to determine the state budget-derived financial support for the dissolved agriculture or forestry company, the owner’s representative agency shall work with and obtain confirmation from creditors in respect of debt exemption and reduction in accordance with relevant laws.

3. All proceeds earned from the dissolution of an enterprise shall be distributed in the order specified in Article 77 of this Decree. Where the proceeds earned are insufficient to cover costs and debts in the above-mentioned order, the state budget shall provide financial support to ensure payment of the outstanding costs and debts in accordance with Clauses 4, 5 and 6 of this Article.

4. Principles for provision of state budget-derived financial support:

a) The central-government budget shall consider providing financial support for agriculture or forestry companies in which Ministries, ministerial agencies, Governmental agencies or other organizations, as assigned by the Government, act as owner’s representative agencies (hereinafter referred to as “central-level owner’s representative agencies);

b) The local-government budget shall consider providing financial support for agriculture or forestry companies in which provincial-level People's Committees act as owner’s representative agencies;

c) During each state budget stabilization period, where a local-government budget unable to balance its funding to provide financial support to dissolved agriculture and forestry companies that are facing insolvency, the central-government budget shall allocate additional funding to the local-government budget in accordance with regulations of law on state budget;

d) Formulation, assignment and execution of budget estimates, and final settlement of state budget expenses shall comply with regulations of law on state budget and relevant laws.

5. Procedures for provision of state budget-derived financial support:

a) The dissolution council shall be responsible for determining the amount of funding deficit in accordance with Clause 2 of this Article, and preparing an application for financial support and submitting it to the owner’s representative agency at the same level. Such an application for financial support includes:

a1) An application form;

a2) Dissolution decision; 

a3) Documents evidencing the proceeds earned from the dissolution;

a4) Documents on outstanding debts supported by complete and valid documents, and accompanied with certifications from competent authorities; contracts and debt reconciliation records;

b) At the request of the dissolution council, the owner’s representative agency shall use funding of the state budget of appropriate level, in accordance with applicable regulations on hierarchical management of state budget, to provide financial support for the dissolution council after collecting opinions from the Ministry of Agriculture and Environment of Vietnam. The Ministry of Agriculture and Environment of Vietnam shall give its written opinions within 15 days from the date of receipt of the written request, accompanied with the documents specified at Point a Clause 5 of this Article, from the owner’s representative agency.

c) Where requested amounts of the state budget-derived financial support have not yet been provided, the central-level owner’s representative agencies and provincial-level People's Committees shall include such requested amounts of financial support in state budget expenditure estimates of appropriate levels in accordance with applicable regulations on hierarchical management of state budget; such state budget expenditure estimates shall be submitted to the Ministry of Finance of Vietnam for consolidation and reporting to the Government for further submission to the National Assembly for approval. Based on state budget expenditure estimates approved by competent authorities, owner’s representative agencies shall provide financial support to dissolution councils in accordance with regulations of law on state budget.

6. Responsibilities of relevant authorities:

a) Responsibilities of owner’s representative agencies: 

a1) Consider providing state budget-derived financial support, in accordance with applicable regulations on hierarchical management of state budget, for agriculture and forestry companies to cover their outstanding costs and debts when carrying out dissolution.

a2) Direct specialized agencies to provide guidance and coordinate with dissolution councils of enterprises and other relevant authorities in resolving issues arising from the dissolution; supervise and inspect the provision of financial support in accordance with this Decree.

a3) Submit reports on provision of state budget-derived financial support to wholly state-owned agriculture and forestry companies that carry out dissolution but are facing insolvency to the Ministry of Agriculture and Environment of Vietnam for consolidation;

b) Responsibilities of the Ministry of Agriculture and Environment of Vietnam:

b1) Submit periodic or ad hoc reports to competent authorities on the dissolution of agriculture and forestry companies; and on provision of state budget-derived financial support to wholly state-owned agriculture and forestry companies that carry out dissolution but are facing insolvency.

b2) Give opinions about plans for provision of state budget-derived financial support to pay outstanding costs and debts arising during the dissolution of agriculture and forestry companies at the request of the owner’s representative agency;

c) Responsibilities of Ministry of Finance:

Direct and provide guidance for tax authorities, the State Treasury, and relevant specialized agencies in certifying tax debts and other amounts payable to the state budget during handling of applications for financial support for dissolved agriculture and forestry companies in accordance with applicable regulations;

d) Responsibilities of dissolved agriculture and forestry companies:

d1) Provide adequate information and documents relating to their debts and loans in accordance with the law, and assume responsibility for the accuracy of such provided information and documents.

d2) Fully perform obligations arising from their dissolution in accordance with regulations of the law on enterprises and this Decree.

1. Principles for transfer of state capital

Transfer of state capital invested in joint-stock companies and multi-member limited liability companies shall comply with provisions of Article 31 of the Law on Management and Investment of State Capital in Enterprises and the following provisions:

a) The transfer of state capital must ensure the compliance with the criteria for classification of state-owned enterprises and state-invested enterprises issued by the Prime Minister; it shall be carried out regardless of the investment capital amount and the business performance of the state-invested enterprise, whether profitable or loss-making; the organization of capital transfer, preparation of the capital transfer dossier, disclosure of information, reporting on the capital transfer, procedures for transfer of ownership of shares, and submission of documents and reports on capital transfer results to competent authorities shall comply with provisions of this Decree.

Where the owner’s representative agency transfers state capital in a joint-stock company whose charter contains restrictions on transfer of shares in accordance with regulations of the Law on Enterprises, or where there is a commitment between the owner’s representative agency and other shareholders regarding priority in transfer of shares (in case a shareholder may only transfer their shares to other existing shareholders of the company), the owner’s representative agency shall direct the representative for state capital in such company to present opinions on amendments to the company’s charter at the GMS, or cooperate with such state capital representative to negotiate with other shareholders to amend such commitment in a manner that enables the state shareholder to freely transfer its capital to other investors (including existing shareholders of the company).

If the opinions presented by the representative for state capital in the joint-stock company at the GMS are refused, or the owner’s representative agency has conducted negotiation but failed to reach an agreement on amendment of the commitment with other existing shareholders, the transfer of state capital shall be carried out in accordance with the charter of the joint-stock company and the commitment made among the company’s shareholders. The transfer of state capital to existing shareholders as prescribed by the company’s charter and the commitment made among the company’s shareholders shall comply with the principles, order and methods of capital transfer prescribed in this Decree;

b) The transfer must adhere to market principles, ensure openness and transparency, maximize the recovery of state capital, and minimize losses arising from such capital transfer.

c) Determination of the starting price when holding an auction for transfer of state capital:

c1) The owner’s representative agency, or an organization or individual working for a unit affiliated to the owner’s representative agency, or the state capital representative authorized in writing by the owner’s representative agency, shall enter into a contract with a qualified valuation organization to determine the starting price in accordance with regulations of laws on pricing and valuation.

c2) The valuation organization may select appropriate valuation methods in accordance with regulations of laws on pricing and valuation for determining the starting price, and shall assume legal responsibility for valuation results. When determining the starting price, the actual value of the state capital invested in the enterprise, including the value generated by the rights to use the land areas allocated with collecting land levies, lawfully transferred land use rights, and leased land use rights (including those leased with annual payment or lump-sum payment of land rents for the entire lease term) must be fully determined in accordance with regulations of law. Inclusion of the value of intangible assets in the starting price for capital transfer shall comply with regulations of law on valuation.

c3) A starting price used for transferring capital under the methods prescribed in this Decree shall be valid for a maximum period of 06 months from the effective date of the valuation certificate to the last trading day (for transactions conducted on the securities trading system), or to the date on which the winning bid for the capital transfer is announced (if the public auction method is employed), or to the date on which the capital transfer contract is signed (if the negotiated method is employed).

c4) In case of transfer of capital in a joint-stock company listed or registered for trading on the Stock Exchange, the starting price shall be determined according to the above-mentioned regulations and the following:

The starting price decided and announced by the owner’s representative agency on the date of the approval of the capital transfer plan shall not be lower than: (i) the price determined by a qualified valuation organization; (ii) the average reference price over 30 consecutive days preceding the date of approval of the capital transfer plan for the ticker symbol of the traded securities of the joint-stock company listed or registered for trading on the Stock Exchange;

d) Transfer of state capital invested in an enterprise that involves land use rights must comply with regulations of the Law on Land. Where:

d1) When carrying out the transfer of state capital invested in an enterprise, the owner’s representative agency shall review the dossier on transfer from a state-owned enterprise to a state-invested enterprise (a joint-stock company or a multi-member limited liability company) in accordance with regulations (including the report on land use of the enterprise) and the actual land use status of the state-invested enterprise as the basis for determining the value of land-use rights to be included in the starting price for the capital transfer purpose.

d2) Determination of the value generated by the land-use rights allocated with collecting land levies, lawfully transferred land-use rights, and leased land-use rights with lump-sum payment of land rents for the entire lease term for inclusion in the starting price shall be carried out on the basis of the land prices determined by a consulting firm at the time of determining the starting price, in comparison to the land levies, transfer price, and land rents paid by the state-invested enterprise.

d3) The value generated by the land-use rights leased with annual payment of land rents included in the starting price shall be determined according to the following rules:

Only the value generated by the land-use rights leased with annual payment of land rents under lease contracts directly signed by the state-invested enterprise with competent authorities shall be determined and included in the starting price. In cases where there is no land lease or the land lease has expired, the relevant provincial-level People’s Committee shall be responsible for reviewing and recovering the land area, organizing an auction of the land lease rights, and leasing such land area in accordance with regulations of the Law on Land.

The value generated by land-use rights leased with annual payment of land rents included in the starting price shall be determined based on the remaining lease term and the positive difference (if any) between the land rent calculated based on the land price determined by a consulting firm at the time of determining the starting price and the land rent calculated based on the land price currently applied by the state-invested enterprise. Where the remaining lease term is shorter than 05 years, it shall be deemed to be 05 years.

d4) If an enterprise uses leased land and is exempted from payment of land rents in accordance with regulations of the Law on Land, the value of the land area for which the land rents are exempted shall not be included in the starting price. In respect of land areas that are currently exempted from the land rents but no longer meet the conditions for such exemption, the provincial-level People's Committee shall review and determine the land rents payable in accordance with the regulations of the Law on Land.

dd) The owner’s representative agency, or an organization or individual working for a unit affiliated to the owner’s representative agency, or the state capital representative authorized in writing by the owner’s representative agency, shall engage a qualified auction organization and consulting firms providing capital transfer-related services to organize the transfer of state capital invested in joint-stock companies and multi-member limited liability companies.

e) When carrying out the transfer of state capital invested in a joint-stock commercial bank as prescribed in this Decree, the owner’s representative agency shall be responsible for disclosing adequate information on conditions to be satisfied by an auction-winning investor to be approved as a shareholder of the joint-stock commercial bank in accordance with regulations of law on credit institutions regarding transfer of capital contributions of shareholders in joint-stock commercial banks, for investors’ information and compliance.

Where, after winning the auction, an investor fails to satisfy the conditions for being approved as a shareholder of the joint-stock commercial bank in accordance with regulations of law on credit institutions, such investor shall not be required to pay for the purchased shares to the owner’s representative agency; if such payment has been made, it shall be refunded (including any deposited amount), and the shares which have not been paid for or have been paid for but the payment has been refunded shall remain under the ownership of the owner’s representative agency;

g) The owner’s representative agency shall direct a competent authority to formulate and submit a capital transfer plan to the owner’s representative agency for making final decision on the capital transfer. A capital transfer plan shall, inter alia, include the following primary contents;

g1) Legal grounds and purposes of the capital transfer.

g2) Assessment of the capital investment status, benefits gained, and impacts of the transfer of state capital invested in the enterprise.

g3) Financial position and business performance of the state-invested enterprise in which the state capital will be transferred, and market demands for investment in such enterprise. Expected proceeds from the capital transfer.

g4) Capital transfer method (in case of lot auction, grounds for such lot auction method must be specified).

g5) Planned time for implementation and completion of the capital transfer;

h) The owner’s representative agency shall not be required to re-formulate the capital transfer plan when changing between the capital transfer methods according to the prescribed sequence (i.e. public auction followed by the negotiated method).

Where the capital transfer carried out adopting the methods prescribed in this Decree is unsuccessful or the number of shares or stakes is not fully transferred according to the approved plan, the owner’s representative agency shall consider deciding an appropriate time to continue the capital transfer in order to complete the capital transfer plan;

i) Any foreign investor that purchases the State’s shares or stakes in a joint-stock company or multi-member limited liability company must comply with the ratio of its paid-in capital to the charter capital of the joint-stock company or multi-member limited liability company in each sector as prescribed by specialized law or international convention to which Vietnam is a signatory. Opening and use of investment capital accounts by foreign investors for purchasing shares or stakes in Vietnamese enterprises when state-owned enterprises transfer their capital invested in joint-stock companies or multi-member limited liability companies shall comply with regulations of relevant laws;

k) The owner's representative agency shall decide, and assume legal responsibility for, all costs associated with the transfer of state capital (including, but not limited to, valuation costs, auction costs, and other costs directly related to the transfer process). Such costs shall be deducted from the proceeds earned from the transfer of state capital. In the event that the transfer of state capital is unsuccessful, or the proceeds earned from the capital transfer are insufficient to fully cover the transfer-related costs, the deficit may be covered by the state budget-derived funding or the enterprise’s funding for production and business expenses to the extent necessary to cover the remaining outstanding costs.

l) The owner’s representative agency shall be responsible for dealing with any difficulties, complaints and denunciations concerning the transfer of state capital within its competence and in accordance with regulations of law in force.

2. Authority to decide the transfer of state capital:

a) Based on the plan for restructuring of state capital in enterprises approved by the Prime Minister as prescribed in point b clause 1 Article 101 of this Decree, the relevant owner's representative agencies shall decide plans for the transfer of state capital in the enterprises listed in Appendix III enclosed herewith;

b) Based on the plan for restructuring of state capital in enterprises prescribed in clause 2 Article 101 of this Decree, the relevant owner's representative agencies shall decide plans for the transfer of state capital in the enterprises under their management (except those specified in point a clause 2 of this Article);

c) Owner’s representative agencies shall develop roadmaps, decide plans, and organize the transfer of state capital invested in joint-stock companies or multi-member limited liability companies according to the plan for restructuring of state capital in enterprises approved by the competent authority.

Methods for transfer of state capital invested in joint-stock companies and multi-member limited liability companies shall comply with provisions of Article 31 of the Law on Management and Investment of State Capital in Enterprises and the following provisions:

1. The transfer of state capital in a joint-stock company listed or registered for trading on the securities market shall be conducted adopting the methods for trading shares on the trading system of the securities market (hereinafter referred to as “securities trading system”) organized by the Stock Exchange, and must comply the rule that the trading price (floor price) shall not be lower than the starting price determined according to point c clause 1 Article 79 of this Decree.

a) Where the capital transfer is conducted through transfer of shares on the securities trading system, the owner’s representative agency shall submit the following documents to the Stock Exchange for disclosure of information about the transfer of shares:

a1) A competent authority's decision on approval of the capital transfer plan;

a2) The information statement which is made using the form specified in Appendix II enclosed herewith;

a3) Documents evidencing that the enterprise whose shares are sold at auction for the purpose of capital transfer is the lawful owner of such shares.

a4) The Stock Exchange shall disclose such information about the transfer of shares at least 20 days before the planned capital transfer date;

b) The transfer of funds for settling transactions involving purchase and sale of shares, and transfer of share ownership shall be carried out in accordance with regulations of law on securities;

c) In the case of a transfer of capital in a joint-stock company listed or registered for trading on the securities market which is not conducted on the securities trading system, such transfer shall be conducted in the following order of methods: public auction, followed by the negotiated method (off-exchange transaction).

The selling price of shares at which investors must make payment to the owner’s representative agency for such off-exchange transactions shall be determined in accordance with regulations applicable to each transfer method (public auction or negotiated method);

d) The owner’s representative agency shall publicly disclose information on the selling price of shares for the purpose of transferring capital in a joint-stock company listed or registered for trading on the securities market in cases where such transactions are conducted outside the securities trading system (off-exchange transactions) to investors for information and compliance;

dd) In the case of a transfer of state capital in a joint-stock company listed or registered for trading on the securities market, the time limit for payment by investors shall be determined according to each trading method; however, the time limit for transfer of proceeds earned from such transfer to the state budget shall comply with provisions on transfer of state capital in joint-stock companies that are not listed or registered for trading on the securities market.

2. The transfer of capital in a joint-stock company that is not yet listed (or that has been listed or registered for trading on the securities market but such transfer is not conducted on the securities trading system) shall be conducted adopting the public auction method; if the public auction is unsuccessful, the negotiated method shall be adopted.

3. Steps of the public auction:

a) Preparation of auction documents, including:

a1) A competent authority's decision on approval of the capital transfer plan;

a2) The information statement which is made using the form specified in Appendix II enclosed herewith;

a3) Documents evidencing that the owner’s representative agency that has shares sold at auction for the purpose of capital transfer is the lawful owner of such shares.

a4) Rules of auction;

b) Organization of the public auction:

b1) After the decision on approval of the capital transfer plan is issued, the owner’s representative agency shall notify the plan for transfer of shares under its ownership to the joint-stock company in which state capital is invested; and shall prepare the auction documents as prescribed.

b2) The owner’s representative agency, or an organization or individual working for a unit affiliated to the owner’s representative agency, or the state capital representative authorized in writing by the owner’s representative agency, shall enter into a service contract with a property auction service center or property auction enterprise established in accordance with regulations of law on property auction or a Stock Exchange or securities company (hereinafter referred to as “auction organization”) for carrying out the capital transfer. The auction shall be held at the headquarters of the auction organization, the owner’s representative agency, or the state-invested enterprise that transfers capital, or at another location as agreed upon between the owner’s representative agency and the auction organization.

b3) The auction organization shall issue the rules of auction of shares and related forms used for conducting the auction after obtaining the consent from the owner’s representative agency. The rules of auction must ensure the compliance with the capital transfer principles as prescribed in the law on management and use of state capital in enterprises and other relevant laws; clearly define responsibilities and rights of relevant parties during the auction of shares for the purpose of capital transfer; stipulate the disclosure of information on the auction (information to be disclosed, and means of disclosing information); stipulate eligible participants, procedures for participating in the auction, notification of auction results (including such information on the payment deadline, payment description, name, address and account number of the beneficiary), procedures for transfer of the ownership of shares, handling of violations, and include other provisions necessary to meet management requirements and ensure that the auction is conducted publicly, transparently, and in conformity with regulations of law.

b4) The owner’s representative agency/auction organization shall publicly disclose the auction documents which are prepared according to regulations to investors at least 20 days before the auction date at the headquarters of the joint-stock company in which the state capital is transferred, the auction venue, on the mass media (at least 03 consecutive issues of a national newspaper and a local newspaper of the area where the owner’s representative agency or the state-invested enterprise is headquartered), and on the websites of the auction organization, the owner’s representative agency, and the joint-stock company in which the state capital is transferred (if any).

b5) Within the time limit specified in the rules of auction, the owner’s representative agency, the auction organization, and investors shall complete the procedures for participating in the auction; investors (organizations or individuals) eligible to participate in the auction shall be provided by the owner’s representative agency/auction organization with auction registration forms to specify the quantity of shares they intend to purchase, and to pay the required deposit. After paying the required deposit, investors shall be provided by the owner’s representative agency/auction organization with auction bidding forms to specify their bids.

b6) Within the time limit specified in the rules of auction, investors shall write their bids on the auction bidding forms, and submit them to the owner’s representative agency/auction organization, either by casting them directly at the auction venue or sending them by post as prescribed in the rules of auction.

b7) A public auction shall only be conducted if at least 02 investors that are eligible participants have submitted valid documents as required and completed all procedures for participating in such public auction in accordance with the rules of auction;

c) Determination of auction results, payment for purchased shares, transfer of ownership of shares, and reporting on capital transfer

c1) Successful bidders shall be determined through selecting bids in descending order until the total number of shares offered for sale at the auction is fully allocated, provided that such bids are not lower than the starting price.

c2) In the event that there are multiple investors (including foreign investors) offering the same bid which is considered the lowest winning bid but the number of remaining shares is less than the total number of shares subscribed for by such investors at such lowest winning bid, the number of shares to be allocated to each investor shall be determined adopting the following formula:

Where the maximum ratio of shares acquired by foreign investors is imposed in accordance with applicable regulations, the auction result shall be also determined following the above-mentioned principles; however, the number of shares to be acquired by a foreign investor shall not exceed such prescribed maximum ratio, and the number of shares exceeding such prescribed ratio (if any) shall be allocated to other investors adopting the above-mentioned formula.

c3) Immediately after the end of the auction, based on the auction result, the auction organization shall make a record of auction result which must be made using the form in Appendix II enclosed herewith, and bear the signatures of the auction organization, representative of the owner’s representative agency and representative of the auction council (if any).

c4) After the investor has fully paid for the subscribed shares, within 05 working days, the owner’s representative agency shall send a set of documents, including: the competent authority’s decision on approval of the capital transfer plan, a written request, and the record of auction result, to Vietnam Securities Depository and Clearing Corporation (VSDC) (in the case of capital transfer in a joint-stock company whose shares have been registered with VSDC) for carrying out procedures for the transfer of securities ownership. Within 05 days from the date of receipt of the capital transfer dossier from the owner’s representative agency, VSDC shall be responsible for effecting the transfer of ownership of shares representing the state capital transferred to other organizations and individuals based on such dossier received from the owner’s representative agency.

c5) In the case of transfer of state capital in a joint-stock company whose shares have not been registered with VSDC, procedures for the transfer of share ownership between the owner’s representative agency and the investor, after the investor has fully paid for the subscribed shares, shall be carried out in accordance with the Law on Enterprises and the Charter of the joint-stock company. The owner’s representative agency shall cooperate with the joint-stock company to complete procedures for the transfer of share ownership to the investor, and publicly disclose information on the procedures and the specific time limit for completing the transfer of share ownership to the investor when organizing the capital transfer.

c6) Within 15 days upon completion of the capital transfer, the owner’s representative agency shall submit a report on results of the auction of shares for the purpose of capital transfer to the Ministry of Finance;

d) Regarding a lot auction:

d1) Cases in which the lot auction shall be applied for capital transfer:

Transfer of shares/capital amounts subject to transfer restrictions as prescribed by the Law on Enterprises, as amended or replaced from time to time;

Capital transfer associated with the obligation to guarantee a loan;

Transfer of the entire capital amount invested in an enterprise in a single auction which would be unlikely to succeed when adopting a normal auction method. In such case, the capital transfer plan must indicate analysis and assessment of the lot auction's effectiveness compared to the normal auction method;

Transfer of capital associated with debts receivable in the case of a state-owned enterprise engaged in debt purchase and sale, The Ministry of Finance shall be assigned to provide further guidelines on this case;

Other cases, subject to the Prime Minister’s decision issued at the request of the owner’s representative agency.

d2) Documentation preparation and submission, organization of the lot auction, transfer of share ownership, and reporting on capital transfer in the case of a lot auction shall be carried out in accordance with the same provisions on public auction in points a, b and c of this clause, and the following regulations:

The auction result shall be determined as follows: A bid is considered valid if it is not lower than the starting price specified in the rules of auction. The winning bid is the highest valid bid. If there are two or more investors submitting the same highest bid which is not lower than the starting price, within 05 working days from the date of the lot auction, the owner’s representative agency shall cooperate with the auction organization to directly hold a secret ballot among these investors to select the one that submits the only highest bid. The bids submitted at the secret ballot shall not be lower than the highest bid submitted by these investors according to the bid increments specified in the rules of auction. The investor submitting the highest bid at the secret ballot shall be declared the successful bidder and entitled to purchase the entire lot of shares. If these investors continue to submit the same bid at the ballot, the successful bidder shall be determined by random drawing. If all investors submitting the highest bid refuse to hold a secret ballot or the successful bidder refuses to purchase shares, the auction shall be considered unsuccessful and another transfer method will be employed as prescribed.

Based on the list of capital amounts to be transferred approved by a competent authority, the value of capital to be transferred, and the market developments at the time of formulating the capital transfer plan, the owner’s representative agency shall decide whether to sell all shares at once or divide them into lots to be put up for auction;

dd) Cases in which the public auction (whether a normal auction or a lot auction) is deemed unsuccessful include: Upon the expiry of the registration period, no investor applies for participation in the auction, or only one investor applies for participation in the auction; during the period from the deadline for payment of the required deposit to the deadline for submission of bidding forms, no bidding form is submitted; no bid is offered during the auction session, or the highest bid received is still lower than the starting price; there is only one successful bidder that refuses to purchase shares, or all successful bidders refuse to purchase shares; all investors are found to have violated the rules of auction according to provisions thereof;

e) In the event that a public auction is unsuccessful, or is successful but there remain shares to be sold for the purpose of transferring state capital, shares shall be sold adopting the negotiated method.

4. Negotiated method:

a) Negotiated method means a method of transferring state capital whereby the owner’s representative agency directly negotiates with the investor in the event that a public auction is unsuccessful and only one investor has submitted a valid bid and has fully completed all procedures for participating in such public auction;

b) The selling price shall be negotiated on the basis of the price determined according to point c clause 1 Article 79 of this Decree;

c) When conducting a transfer of state capital adopting the negotiated method, the person having the power to decide the capital transfer shall not be allowed to decide to transfer capital to an enterprise in which his/her spouse, natural or adoptive parent, natural or adopted child, son/daughter-in-law, biological sibling, or brother/sister-in-law acts as a manager, and shall not decide to transfer capital to these individuals;

d) Upon completion of the negotiation and conclusion of the capital transfer contract, the payment for purchased shares must be made within 05 working days from the date on which the capital transfer contract is signed;

dd) Within 05 working days after the investor has fully paid for the purchased shares, the owner’s representative agency shall prepare a set of documents for transfer of ownership of shares to the investor, comprising: the competent authority’s decision on approval of the capital transfer plan, a written request of the owner’s representative agency, and the capital transfer contract. Submission of documents for transfer of share ownership, and reporting on the capital transfer under the negotiated method shall comply with the same provisions on public auction for transfer of state capital in enterprises in point c clause 3 of this Article.

5. If the state capital to be transferred is not fully transferred after adopting public auction or negotiated method, the owner’s representative agency shall, based on the market demands and the enterprise’s development prospects, determine an appropriate time to continue the capital transfer and decide to re-determine the starting price in conformity with the order of capital transfer methods prescribed in this Decree.

If the valuation certificate expires while the owner’s representative agency is carrying out the capital transfer, it shall not be required to re-formulate the capital transfer plan but must re-determine the starting price for continuing the capital transfer according to the adopted transfer method (if the public auction is unsuccessful or the capital to be transferred is not fully sold, the negotiated method shall be applied on the basis of such re-determined starting price).

6. Methods for transfer of state capital invested in a multi-member limited liability company shall comply with provisions of the Law on Enterprises as follows:

a) In the case of a capital transfer prescribed in Article 51 of the Law on Enterprises (requesting the company to repurchase the capital amount held by a state-owned enterprise), the transfer price shall be a negotiated price which is determined based on market principles. Such negotiated price shall be determined on the basis of the valuation results provided by a qualified valuation organization as prescribed in point c clause 1 Article 79 of this Decree.

In cases where the company fails to reach an agreement on the price for repurchasing the state capital in the company, the owner’s representative agency shall be entitled to transfer the state capital to other members of the company or to organizations and individuals other than the company’s members, using the same transfer methods applicable to the transfer of state capital in joint-stock companies that are not yet listed or registered for trading on the securities market, as prescribed in this Article;

b) In cases where, after requesting the company to repurchase the state capital contributed in the company, the company fails to do so, the owner’s representative agency shall be entitled to transfer part or all of the state capital in accordance with Article 52 of the Law on Enterprises, as follows:

b1) If the capital is transferred to other members of the company in proportion to their respective stakes in the company in accordance with the Law on Enterprises, the transfer price shall be negotiated with such members based on market principles, with the negotiated price determined on the basis of the valuation results provided by a qualified valuation organization as prescribed in point c clause 1 Article 79 of this Decree.

b2) If the capital is transferred to organizations or individuals other than the company’s members (after the company’s members refuse to purchase the state capital or have not fully purchased the state capital), the owner’s representative agency shall consider adopting the same capital transfer methods as those employed to transfer state capital in joint-stock companies that are not yet listed or not yet registered for trading on the securities market, as prescribed in this Article.

b3) Within 15 days after completing the transfer of state capital in the multi-member limited liability company, the owner’s representative agency shall prepare a report on the capital transfer results and submit it to the Ministry of Finance.

7. Periodic reporting on the transfer of state capital:

Within a maximum duration of 15 working days from the end of each quarter, owner’s representative agencies shall be responsible for submitting to the Ministry of Finance reports on results of the transfer of state capital invested in enterprises, according to the approved list of capital amounts to be transferred, for the purposes of monitoring and submitting consolidated reports thereon to the Prime Minister, the Government, and the National Assembly, as prescribed.

8. The owner’s representative agency shall direct the relevant units to develop an estimate of costs incurred from the transfer of state capital. The owner’s representative agency shall consider approving the estimate and final settlement of costs incurred from the transfer of state capital, and decide specific levels of costs which must be supported by valid and reasonable documents as prescribed by law, and assume legal responsibility for its decision. Costs incurred from the transfer of state capital include costs of hiring valuation consultants, costs of auction, costs of completing legal procedures for the transfer, securities depository fees, any taxes, fees and charges payable to the state budget, and other related costs (excluding remunerations paid to members of the owner’s representative agency, the state capital representative, and members of the enterprise).

Based on the decision on approval of the estimate of costs incurred from the transfer of state capital, the owner’s representative agency shall prepare an estimate of costs covered with state budget-derived funding which shall not exceed 70% of total estimated costs incurred from the transfer of state capital for being consolidated into the estimate of state budget expenditures of the appropriate level in accordance with applicable regulations on hierarchical management of state budget, and submit it to the Ministry of Finance for inclusion in the annual estimate of state budget expenditures as prescribed. Based on the capital transfer results, the owner’s representative agency shall make a final settlement of proceeds earned and costs incurred from such capital transfer. If the sum of the proceeds earned from the capital transfer and the state budget-derived funding allocated in advance to cover the capital transfer costs exceeds the reasonable costs actually incurred from the capital transfer, the surplus shall be settled and paid to the state budget. If the sum of the proceeds earned from the capital transfer and the state budget-derived funding allocated in advance to cover the capital transfer costs is insufficient to cover the reasonable costs actually incurred from the capital transfer, the owner’s representative agency shall prepare an estimate of costs covered with state budget-derived funding in respect of such deficit.

The owner’s representative agency shall submit a report on the capital transfer results and final settlement (of proceeds earned and reasonable costs actually incurred from the capital transfer, funding allocated in advance, and surplus/deficit in funding paid to or requiring additional funding from the state budget) and relevant documents to the state budget for return of advanced funding and accounting.

If a capital transfer is in progress but must be terminated/temporarily suspended under a decision issued by the owner’s representative agency, the owner’s representative agency shall consider approving the final settlement of reasonable costs actually incurred from the capital transfer, prepare and submit an estimate of such costs covered with state budget-derived funding to the Ministry of Finance for inclusion in the annual estimate of state budget expenditures as prescribed.

1. Proceeds earned from the transfer of state capital to other organizations or individuals (investors), after adding any the state budget-derived funding allocated in advance to cover transfer costs and deducting reasonable costs actually incurred from such transfer, shall be transferred to the state budget.

2. The owner’s representative agency (or a competent authority authorized or assigned in writing by the owner’s representative agency) shall be responsible for providing complete information to enable investors to make payments to the account of the owner’s representative agency (including: name, address, and bank account number of the beneficiary, payment deadline, and payment description (payment for the winning bid)).

3. Time limit for transfer of proceeds to the state budget:

a) In the case of transfer of capital in a joint-stock company listed on the securities market or registered for trading on the UPCOM trading system, within 05 working days from the date on which the owner’s representative agency receives full payment under the trading methods prescribed by the law on securities, it shall determine the amount payable in accordance with clause 1 of this Article and transfer it to the state budget;

b) n the case of transfer of state capital in a joint-stock company which is not yet listed on the securities market or not registered for trading on the UPCOM trading system, or transfer of state capital in a multi-member limited liability company, within 05 working days from the date on which the investor makes full payment, the owner’s representative agency shall determine the amount payable in accordance with clause 1 of this Article and transfer it to the state budget.

In cases where an investor fails to make payment or makes payment beyond the prescribed time limit, they shall be subject to administrative penalties and enforcement measures in accordance with regulations of law on taxation.

4. The owner’s representative agency shall be responsible for inspecting and supervising investors’ payments and transferring money to the state budget in accordance with applicable regulations.

1. Transfer of rights of representation of state capital in state-invested enterprises between owner’s representative agencies.

2. Transfer of rights of representation of state capital in enterprises from an owner’s representative agency to a wholly state-owned enterprise or a wholly state-owned enterprise performing the function of investing and trading state capital.

3. Other cases as decided by the Prime Minister.

1. Transfer of the rights of representation of state capital in enterprises shall be conducted following the principles of publicity, transparency, continuity, and cooperation among relevant parties in addressing issues arising during and after such transfer, and ensure that such transfer shall not adversely affect the production and business operations of the enterprise, in accordance with applicable laws.

2. Such transfer shall be organized in accordance with regulations of law and the guidelines provided herein.

3. The value of the state capital in respect of which the rights of representation are transferred shall be the book value of the state capital invested in the enterprise as defined in clause 6 Article 3 of Law No. 68/2025/QH15.

4. Where, after the transfer, there are any changes in the figures specified in the transfer dossier, the relevant parties shall cooperate to clarify the causes thereof, adopt appropriate remedial measures, and adjust the official transfer figures accordingly.

1. The Prime Minister shall consider issuing transfer decisions, upon the request of the owner’s representative agency that wishes to conduct or receive the transfer of rights, in the following cases:

a) Transfer of rights of representation of state capital in enterprises prescribed in clause 1 Article 82 of this Decree;

b) Transfer of rights of representation of state capital in an enterprise from the owner’s representative agency to a wholly state-owned enterprise under the jurisdiction of another owner’s representative agency or listed in Appendix III enclosed herewith;

c) Transfer of rights of representation of state capital prescribed in clause 3 Article 82 of this Decree;

d) Transfer of rights of representation of state capital in enterprises listed in Appendix III enclosed herewith.

2. The owner’s representative agency shall, based on the plan for restructuring of state capital in enterprises within its management, issue a decision on transfer of rights of representation of state capital in an enterprise from the owner’s representative agency to a wholly state-owned enterprise under its management, except for the cases specified at point d clause 1 of this Article.

3. Transfer of rights of representation of state capital in an enterprise from the owner’s representative agency to a wholly state-owned enterprise performing the function of investing and trading state capital shall be carried out in accordance with the Government’s regulations on functions, duties, and operational mechanisms of wholly state-owned enterprises performing the function of investing and trading state capital.

1. For cases where the transfer is decided by the Prime Minister:

a) The owner’s representative agency requesting to transfer or to receive transferred rights shall prepare a set of documents for transfer of rights of representation of state capital in the enterprise (transfer dossier), comprising:

a1) An explanatory report on the objectives, necessity, and socio-economic efficiency of the transfer or receipt of the transfer of rights of representation of state capital in the enterprise;

a2) A report on assessment of the financial status and production and business performance of the enterprise; a report on assessment of the impacts of the transfer or receipt of the transfer on the enterprise, and on the transferring and receiving owner’s representative agencies;

a3) A copy of the enterprise establishment decision; a copy of the enterprise’s 05-year production and business strategy or plan as approved in principle by the competent authority;

a4) Copies of decisions issued by competent authorities announcing the enterprise’s performance classification results for 03 consecutive years preceding the year in which the transfer of rights of representation of state capital is determined;

a5) Copies of audited financial statements for 03 consecutive years preceding the year in which the transfer of rights of representation of state capital is determined;

b) The owner’s representative agency that wishes to conduct or receive the transfer shall send a written request for getting opinions from the owner’s representative agency proposed to receive or transfer the rights of representation of state capital.

Within 20 working days from the date of receipt of the written request from the owner’s representative agency (accompanied with the transfer dossier specified in clause 1 of this Article), the requested owner’s representative agency shall give its written opinions about the transfer of rights of representation of state capital in the enterprise;

c) Based on written opinions given by the requested owner’s representative agency, the requesting owner’s representative agency shall instruct the enterprise in which the rights of representation of state capital are to be transferred to modify and complete the transfer dossier (if any) for submission to the Prime Minister for consideration and decision.

2. For cases where the transfer is decided by the owner’s representative agency

a) The owner’s representative agency shall direct the representative for state capital in the enterprise in which the rights of representation of state capital are to be transferred to prepare the transfer dossier as prescribed in point a clause 1 of this Article and submit it to the owner’s representative agency for consideration and decision;

b) Within 15 working days from its receipt of the transfer dossier, the owner’s representative agency shall consider issuing a decision on such transfer.

3. The transfer of rights of representation of state capital in an enterprise shall be conducted after a transfer decision is issued by the competent authority.

a) Parties engaged in the transfer shall include:

a1) The transferring owner’s representative agency and the receiving owner’s representative agency; or a wholly state-owned enterprise receiving the transfer;

a2) The enterprise in which the rights of representation of state capital are to be transferred;

a3) The representative for state capital in the enterprise;

a4) Other organizations and individuals involved in the transfer of the rights of representation of state capital in the enterprise as prescribed;

b) The transferring owner’s representative agency shall direct the subject enterprise, the representative for state capital in the enterprise, or specialized departments (for an enterprise in which the state capital representative is not appointed or designated) to prepare the transfer dossier in accordance with the provisions of Article 87 of this Decree, and submit it to the relevant units. The enterprise shall be responsible for the accuracy of all contents of the transfer dossier;

c) Based on the transfer dossier, the owner's representative agency/the wholly state-owned enterprise receiving the transfer shall direct its specialized departments to cooperate with the enterprise in which the rights of representation of state capital are to be transferred in verifying the information and figures contained in the transfer dossier; prepare a record of transfer of rights of representation of state capital in the enterprise, and submit it to the head of the owner's representative agency or his/her authorized person for signing.

Within 10 working days from its receipt of the transfer dossier from the transferring owner's representative agency, the receiving owner's representative agency or the authorized person shall consider signing the record of transfer of rights of representation of state capital ;

d) If the receiving owner's representative agency finds the transfer dossier unsatisfactory, it shall, within 10 working days from its receipt of the transfer dossier, provide written opinions to the transferring owner's representative agency for modifying such transfer dossier as prescribed.

within 10 working days from its receipt of written opinions from the receiving owner’s representative agency, the transferring owner’s representative agency shall direct the enterprise, the representative for state capital in the enterprise and relevant specialized departments to cooperate with the enterprise to modify and complete the transfer dossier as prescribed, or give its written opinions about the proposed modifications to the transfer dossier;

dd) The transferring owner’s representative agency, where necessary, shall cooperate with the receiving owner's representative agency to organize a meeting to discuss and reach agreement on the contents of the record of transfer of rights of representation of state capital.

e) After the record of transfer of rights of representation of state capital is signed, the enterprise shall send the transfer dossier to relevant parties as follows:

01 set of the transfer dossier shall be sent to the transferring owner's representative agency;

01 set of the transfer dossier shall be sent to the receiving owner's representative agency;

01 set of the transfer dossier shall be retained by the enterprise;

g) Upon completion of the transfer, the receiving owner's representative agency shall send 01 copy of the transfer record to the transferring owner’s representative agency, and 01 copy to the enterprise;

h) In the event that the figures in the transfer record need to be adjusted after the completion of the transfer, the receiving owner's representative agency shall send the modified transfer record to the agencies specified in point e clause 3 of this Article.

1. Transfer figures are those presented in the audited annual, semi-annual, or quarterly financial statements as at the date closest to the transfer date, prepared in accordance with applicable regulations. In case the transfer involves the state capital in an enterprise that is a parent company of an economic group, a parent company of a state corporation, or a parent company within a parent company - subsidiary group, the transfer figures shall be determined based on the separate financial statements of such parent company.

2. Where adjustments to the transfer figures of an enterprise are required, the transferring owner’s representative agency and the receiving owner’s representative agency shall cooperate with each other to make such adjustments.

3. In cases where the audit report on the enterprise’s annual, semi-annual, or quarterly financial statements contain qualified opinions or include emphasis of matter or other matter paragraphs, the receiving owner’s representative agency may consider requesting the audit firm to provide clarification as a basis for adjusting the transfer figures (if necessary), or include such audit qualifications and matters requiring attention in the transfer record.

4. In the event the enterprise has outstanding financial issues, has not completed final settlement, or has not announced the actual value of the state capital in the enterprise, it shall be responsible for determining and reporting the causes thereof to the transferring owner’s representative agency for recording such an event in the transfer record and taking appropriate actions in accordance with applicable regulations.

The transfer dossier shall be prepared for each enterprise and shall include the following documents:

1. A report on the value of the state capital invested in the enterprise.

2. A report on the state amounts receivable from the enterprise (if any).

3. A report on the financial position and business operations of the enterprise.

4. Information on the representative for state capital in the enterprise, including the decision on appointment of the representative for state capital in the enterprise issued by the owner’s representative agency.

5. The record of transfer of rights of representation of state capital in the enterprise. The transfer record shall clearly specify: the transfer date, the value of state capital of which the rights of representation are transferred, the reasons for any decrease in the state capital value; the collective and individual responsibilities of the parties involved for such decease in the state capital value at the time of preparation of the transfer dossier as the basis for the transfer; any documents missing from the transfer dossier as prescribed in this Article; any outstanding issues that require continued cooperation and resolution after the transfer.

6. The enterprise’s legal documents (copies extracted from master registers, certified true copies, or copies presented together with their originals for verification and confirmation purposes), including:

a) The Decision on establishment of the company or decision on conversion of the state-owned enterprise;

b) Decision and record issued by the competent authority regarding re-determination of the value of the state capital as at the date on which the enterprise is issued with the initial enterprise registration certificate.

c) Written confirmation from the enterprise’s Board of Directors/Board of Members regarding the state-invested capital or shares in the enterprise, and the share certificate or shareholder certificate or shareholder register of the State (for joint-stock companies), or capital contribution certificate or members’ register of the State (for multi-member limited liability companies);

d) The initial enterprise registration certificate and its amendments (if any);

dd) The list of members of the Board of Directors/Board of Members or Company’s President, Director or General Director;

e) The current Charter on organization and operation of the enterprise;

g) The separate financial statements and consolidated financial statements (where such consolidated financial statements are compulsory) for the relevant year or quarter, prepared and audited as at the date closest to the transfer date or the financial statements prepared as at the date on which the enterprise is issued with the initial enterprise registration certificate (for an enterprise that carries out the transfer within the same year in which the initial enterprise registration certificate is issued). If the audited annual or quarterly financial statements are not available, the most recent annual or quarterly financial statements prepared as at the date closest to the transfer date shall be used;

h) Documents relating to the equitization of enterprise that is converted into a joint-stock company, including:

h1) Documents on the enterprise valuation for equitization purpose;

h2) Decision to announce the enterprise value and decisions/documents issued by competent authorities settling financial issues (such as debts, capital contributions, work-in-progress, and goods/assets which are redundant or unused, etc.), and personnel-related issues as at the date of enterprise valuation for equitization purpose;

h3) The equitization plan and decision on approval of the equitization plan issued by a competent authority;

h4) Decision on the starting price for initial offering of shares and documents regarding the results of the initial auction of shares, and notice of receipt of payments for shares sold to employees through auction or negotiated method;

h5) Documents on settlement of financial and personnel issues arising from the date of announcement of the enterprise value for equitization purpose until the issue date of the initial enterprise registration certificate;

h6) Decision to announce the actual value of state capital as at the official date of conversion into a joint-stock company (if any).

h7) Documents regarding the receipt of joint-venture contributions or state capital contributions, in case where land-use rights are contributed under joint-venture contracts;

h8) Documents regarding increase/decrease in the charter capital, and increase/decrease in the state capital in the enterprise from the date of conversion into a joint-stock company until the transfer date;

h9) Documents regarding proceeds earned from the equitization, dividends on the state capital and other receivables due before the transfer date.

h10) Documents regarding management and use of land and property on land of the enterprise in which the rights of representation of state capital are transferred, including land use plans approved by competent authorities; certificates of land-use rights, certificates of ownership of house and other property on land; land allocation/lease decisions; land lease contracts; contracts for sale and purchase or transfer of land-use rights and property on land; investment certificates, and any other relevant legal documents concerning land-use rights and property on land (if any).

1. In the case of a transfer of the rights of representation of state capital invested in an enterprise between owner’s representative agencies, the state-invested enterprise shall not adjust the carrying value recorded in its accounting books. The owner’s representative agency shall carry out procedures for the transfer of ownership of shares or capital contributions in accordance with applicable regulations of law.

2. In the case of a transfer of the rights of representation of state capital invested in an enterprise from an owner’s representative agency to a wholly state-owned enterprise or a wholly state-owned enterprise performing the function of investing and trading state capital, upon completion of the transfer, the wholly state-owned enterprise receiving the transfer shall, based on the transfer figures, record an increase in its owner’s equity.

In the event that the enterprise in which the rights of representation of state capital are transferred has incurred losses or has negative owner’s equity at the time of receipt of the transfer, the receiving enterprise shall record an increase in its owner’s equity equal to the value of the transferred capital (without offsetting accumulated losses). After the transfer, the receiving enterprise shall make provisions for impairment or losses of its investment in accordance with regulations of law.

1. The owner’s representative agency shall carry out the transfer of the rights of representation of state capital invested in the enterprise after a decision on such transfer is issued by the Prime Minister in accordance with clause 1 Article 84 of this Decree; shall exercise its rights and perform its responsibilities and obligations in accordance with regulations of law and the transfer record.

2. The enterprise shall exercise its rights and perform its responsibilities and obligations in accordance with the transfer record. It shall be responsible for the accuracy of documents and data.

1. The enterprise in which the rights of representation of state capital are transferred shall make the list of existing employees, the list of employees who will continue working at the enterprise after transfer, the list of employees to be trained for continuing employment at the enterprise after the transfer, the list of employees receiving retirement benefits, and the list of employees whose employment contracts are terminated.

2. Employees whose employment contracts are terminated shall be provided with redundancy or severance allowances in accordance with regulations of law on labour.

3. Employees who are eligible for retirement benefits shall be entitled to such benefits in accordance with regulations of law on social insurance and other benefits in accordance with regulations of law on labour.

1. Transfer of investment projects (including in-progress investment projects), capital, and assets between wholly state-owned enterprises, including:

a) Transfer between wholly state-owned enterprises falling under the management of the same owner’s representative agency;

b) Transfer between wholly state-owned enterprises falling under the management of different owner’s representative agencies.

2. Transfer of capital and assets invested by a wholly state-owned enterprise in joint-stock companies and limited liability companies to an owner’s representative agency, including:

a) Transfer of capital and assets invested by a wholly state-owned enterprise in joint-stock companies and limited liability companies to the owner’s representative agency having the power to manage such wholly state-owned enterprise;

b) Transfer of capital and assets invested by a wholly state-owned enterprise in joint-stock companies and limited liability companies to another owner’s representative agency.

3. Transfer of public service units of a wholly state-owned enterprise to an owner’s representative agency, including:

a) Transfer of public service units of a wholly state-owned enterprise to the owner’s representative agency having the power to manage such wholly state-owned enterprise;

b) Transfer of public service units of a wholly state-owned enterprise to another owner’s representative agency.

4. Other cases of transfer as decided by the Prime Minister.

1. The receiving party shall inherit all rights, obligations, and responsibilities of the transferring party. The transfer of an investment project or assets associated with land-use rights shall comply with regulations of law on land.

2. A record of transfer of public service units, investment projects, capital, or assets between the parties must be made, and shall clearly specify the transfer value, rights, obligations, and responsibilities of the transferring party and the receiving party, any issues requiring further consideration, and obligations to the State (if any).

3. Transfers in the cases specified in clause 4 Article 91 of this Decree shall be carried out according to the directions of the Prime Minister.

1. The Prime Minister shall consider issuing transfer decisions in the following cases:

a) Transfer of investment projects, capital, and assets between wholly state-owned enterprises falling under the management of different owner’s representative agencies, or between wholly state-owned enterprises listed in Appendix III enclosed herewith;

b) Transfer of capital and assets invested by a wholly state-owned enterprise in joint-stock companies and limited liability companies to another owner’s representative agency;

c) Transfer of public service units of a wholly state-owned enterprise to another owner’s representative agency;

2. The owner’s representative agency shall, based on the plan for restructuring of state capital in enterprises under its management (except for those enterprises subject to decisions issued by the Prime Minister), consider issuing transfer decisions in the following cases:

a) Transfer of investment projects, capital, and assets between wholly state-owned enterprises falling under the management of the same owner’s representative agency;

b) Transfer of capital and assets invested by a wholly state-owned enterprise in joint-stock companies and limited liability companies to the owner’s representative agency having the power to manage such wholly state-owned enterprise;

c) Transfer of public service units of a wholly state-owned enterprise to the owner’s representative agency having the power to manage such wholly state-owned enterprise.

1. For cases where the transfer is decided by the Prime Minister:

a) The owner’s representative agency that wishes to receive the transfer/the owner’s representative agency of the enterprise that wishes to transfer or receive the transfer shall prepare a transfer dossier and send it to the owner’s representative agency of the transferring or receiving enterprise/the receiving owner’s representative agency to seek their opinions. Such transfer dossier includes:

a1) A written request for transfer, indicating clear explanations about the objectives, necessity, and socio-economic efficiency of the transfer or receipt of the transfer, issues requiring further consideration, and rights and responsibilities of the parties;

a2) Documents on the public service unit, investment project, capital or asset to be transferred;

a3) Relevant directives issued by competent authorities;

a4) A report on assessment of the financial status and production and business performance of the wholly state-owned enterprise, accompanied with its audited financial statements of the year preceding the year in which the transfer decision is issued; A report on assessment of the financial status and production and business performance of the enterprise in which the wholly state-owned enterprise holds shares or stakes, accompanied with such enterprise’s audited financial statements of the year preceding the year in which the transfer decision is issued; A report on assessment of the operational and financial status of the public service unit for the year preceding the year in which the transfer decision is issued; A report on assessment of impacts of the transfer or receipt of the transfer on the transferring and receiving enterprises/owner’s representative agencies;

b) Within 20 working days from its receipt of the written request for opinions from the requesting owner’s representative agency, the requested owner’s representative agency shall give its opinions on the transfer dossier.

If the owner’s representative agency requested to give opinions does not approve the requested transfer, it shall give a written response clearly stating the reasons therefor within 15 working days from its receipt of the written request for opinions from the requesting owner’s representative agency;

c) Within 30 working days from the date of receipt of the opinions given by the requested owner’s representative agency, the owner’s representative agency of the enterprise that wishes to transfer or receive the transfer/the receiving owner’s representative agency shall complete the transfer dossier, and send it to seek opinions from the Ministry of Finance (regarding the financial plan upon transfer) and other relevant authorities (if necessary) for consolidating and submitting to the Prime Minister for consideration and decision;

d) The transfer shall be carried out after the Prime Minister issues a transfer decision:

d1) Parties engaged in the transfer shall include: the transferring and receiving owner’s representative agencies; the transferring enterprise and the receiving enterprise; and other relevant organizations and individuals involved in the transfer of public service unit, investment project, capital, and assets of the enterprise in accordance with regulations.

d2) Based on the transfer dossier, the owner’s representative agency of the transferring enterprise shall direct its specialized departments to cooperate with the enterprise in verifying the information and figures contained in the transfer dossier; prepare a transfer record, including the following contents: the transfer date, the value of capital and assets transferred, rights, obligations, and responsibilities of the transferring and receiving parties, issues requiring further consideration, and obligations to the State (if any); and submit it to the head of the owner’s representative agency or his/her authorized person for signing.

d3) Within 10 working days from the date on which the owner’s representative agency of the transferring enterprise signs the transfer record, the owner’s representative agency of the receiving enterprise shall confirm its agreement with the contents of, and countersign, the transfer record.

d4) After the transfer record is signed, the transferring enterprise shall send the transfer dossier to the relevant owner’s representative agencies and the receiving enterprise, and retain one complete set on file.

2. For cases where the transfer is decided by the owner’s representative agency:

a) Transfer of investment projects, capital, and assets between wholly state-owned enterprises falling under the management of the same owner’s representative agency:

a1) The enterprise that wishes to transfer or receive the transfer shall cooperate with the receiving or transferring enterprise, as the case may be, to agree on the transfer policy, prepare a transfer dossier and submit it to the owner’s representative agency. Such transfer dossier includes:

A written request for transfer, indicating clear explanations about the objectives, necessity, and socio-economic efficiency of the transfer or receipt of the transfer, issues requiring further consideration, and rights and responsibilities of the parties;

A written agreement on the transfer policy between the transferring enterprise and the receiving enterprise;

Documents on the public service unit, investment project, capital or asset to be transferred;

Relevant directives issued by competent authorities;

A report on assessment of the financial status and production and business performance of the enterprise, accompanied with its audited financial statements of the year preceding the year in which the transfer decision is issued; a report on assessment of the impacts of the transfer or receipt of the transfer on the transferring enterprise or the receiving enterprise;

Within 20 working days from its receipt of the enterprise’s transfer dossier, the owner’s representative agency shall send it to seek opinions from the same-level finance authority (regarding the financial plan upon transfer) and other relevant authorities (if necessary) on the transfer plan. If the owner’s representative agency does not approve the requested transfer, it shall give a written response clearly stating the reasons therefor within 15 working days from its receipt of the transfer dossier submitted by the enterprise.

Based on written opinions given by the same-level finance authority and other relevant authorities (if any), the owner’s representative agency shall issue a transfer decision. Such a transfer decision shall include the following contents: quantity and value of the assets to be transferred; the transfer date; financial settlement and accounting arrangements of the parties; the issues requiring further consideration; rights, obligations, and responsibilities of the parties.

a2) The transfer shall be carried out after the owner’s representative agency issues a transfer decision:

Parties engaged in the transfer shall include: the owner’s representative agency; the transferring enterprise and the receiving enterprise; and other relevant organizations and individuals involved in the transfer of public service unit, investment project, capital, and assets of the enterprise in accordance with regulations.

Based on the transfer dossier, the owner's representative agency shall direct its specialized departments to cooperate with the enterprises involving the transfer in verifying the information and figures contained in the transfer dossier; prepare a transfer record, and submit it to the head of the owner's representative agency or his/her authorized person for signing.

After the transfer record is signed, the transferring enterprise shall send the transfer dossier to the relevant owner’s representative agency and the receiving enterprise, and retain one complete set on file;

b) Transfer of capital and assets invested by a wholly state-owned enterprise in a joint-stock company or limited liability company to the owner’s representative agency having the power to manage such wholly state-owned enterprise:

b1) The owner’s representative agency shall direct the wholly state-owned enterprise to prepare a transfer dossier which includes:

A written request for transfer, indicating clear explanations about the objectives, necessity, and socio-economic efficiency of the transfer, issues requiring further consideration; rights and responsibilities of the transferring enterprise and the owner’s representative agency;

A report on assessment of the financial status and production and business performance of the transferring enterprise, accompanied with its audited financial statements of the year preceding the year in which the transfer decision is issued; a report on assessment of the impacts of the transfer and receipt of the transfer on the transferring enterprise and the owner’s representative agency;

A report on assessment of the financial status and production and business performance of the enterprise in which the transferring enterprise holds shares/stakes, accompanied with its audited financial statements of the year preceding the year in which the transfer decision is issued;

Relevant directives concerning the transfer issued by competent authorities (if any);

b2) Within 20 working days from its receipt of the transfer dossier, the owner's representative agency shall direct its specialized departments to cooperate with the enterprise in verifying the information and figures contained in the transfer dossier; and reporting to the owner’s representative agency for issuing a transfer decision. Such a transfer decision shall include the following contents: quantity and book value of the shares/stakes to be transferred (for shares, the market price of shares at the transfer date must also be stated); the transfer date; financial settlement by the transferring enterprise; the issues requiring further consideration; rights, obligations, and responsibilities of the parties;

c) Transfer of a public service unit of a wholly state-owned enterprise to the owner’s representative agency having the power to manage such wholly state-owned enterprise:

c1) The owner’s representative agency shall direct the wholly state-owned enterprise to prepare a transfer dossier which includes:

A written request for transfer, indicating clear explanations about the objectives, necessity, and socio-economic efficiency of the transfer, issues requiring further consideration; rights and responsibilities of the transferring enterprise and the owner’s representative agency;

A report on assessment of the financial status and production and business performance of the transferring enterprise, accompanied with its audited financial statements of the year preceding the year in which the transfer decision is issued; a report on assessment of the impacts of the transfer and receipt of the transfer on the transferring enterprise and the owner’s representative agency;

Relevant directives concerning the transfer issued by competent authorities (if any);

c2) Within 20 working days from its receipt of the transfer dossier, the owner's representative agency shall direct its specialized departments to cooperate with the enterprise in verifying the information and figures contained in the transfer dossier; and reporting to the owner’s representative agency for issuing a transfer decision. Such a transfer decision shall include the following contents: information about the public service unit to be transferred; the transfer date; financial settlement by the public service unit (if any); the issues requiring further consideration; rights, obligations, and responsibilities of the parties.

The financial settlement in the transfer cases specified in Article 91 of this Decree shall be carried out according to the following principles:

1. The transfer shall be conducted on an “as-is” basis according to the value recorded in accounting books; any increase or decrease in the owners’ equity shall be recognized based on the book value of shares, stakes, and assets at the enterprise.

2. The transfer shall be carried out without payment and without revaluation of the investment project or assets transferred.

1. Transfer of share purchase rights, pre-emptive rights to purchase shares, or rights to purchase stakes in respect of the state capital in an enterprise (hereinafter referred to as “rights to purchase shares/stakes”) from the owner’s representative agency to a wholly state-owned enterprise under its management.

2. Transfer of rights to purchase shares/stakes from the owner’s representative agency to a wholly state-owned enterprise performing the function of investing and trading state capital.

3. Transfer of rights to purchase shares/stakes in an enterprise in which the transfer of rights of representation of state capital is in progress as prescribed in clause 2 Article 82 of this Decree to the receiving enterprise that is a wholly state-owned enterprise.

4. Other cases of transfer as directed by the Prime Minister.

1. In cases where the owner’s representative agency does not exercise the rights to purchase shares/stakes for the purpose of additional investment of state capital as prescribed, the owner’s representative agency shall consider issuing a decision to transfer such rights to purchase shares/stakes to a wholly state-owned enterprise under its management or a wholly state-owned enterprise performing the function of investing and trading state capital as prescribed in clause 1 Article 98 of this Decree, ensuring compliance with the time limit for exercising such rights as notified by the enterprise. The transfer of rights to purchase shares/stakes shall be carried out without payment.

2. In cases where the enterprise in which the owner’s representative agency holds shares/stakes operates in sectors or fields in which the State is required to continue investing capital according to the criteria for classification of state-owned enterprises and state-invested enterprises, the enterprise receiving the rights to purchase shares/stakes shall exercise such rights, manage and account for them in accordance with regulations.

3. In cases where the enterprise in which the owner’s representative agency holds shares/stakes operates in sectors or fields in which the State is not required to continue investing capital according to the criteria for classification of state-owned enterprises and state-invested enterprises, the enterprise receiving the rights to purchase shares/stakes shall consider and decide whether to exercise such rights or to transfer such rights after receipt in accordance with the Government’s regulations on management and investment of state capital in enterprises, and in a manner that ensures economic efficiency.

1. Based on the notification of exercise of rights to purchase shares/stakes give by the enterprise in which the owner’s representative agency holds shares/stakes, and the receiving enterprise's report on its financial status and ability to balance funding sources, the owner’s representative agency shall issue a Decision on transfer of rights to purchase shares/stakes.

2. Based on the Decision on transfer of rights to purchase shares/stakes issued by the owner’s representative agency, the receiving enterprise shall exercise such rights to purchase shares/stakes according to the issuance plan of the enterprise in which the owner’s representative agency holds shares/stakes, or carry out the transfer of such received rights to purchase shares/stakes in accordance with the Government’s regulations on management and investment of state capital in enterprises.

This Decree comes into force from February 13, 2026, and supersedes the following:

1. The Government’s Decree No. 126/2017/ND-CP dated November 16, 2017;

2. Article 1 of the Government’s Decree No. 140/2020/ND-CP dated November 30, 2020.

3. Provisions of Chapter III Chapter IV, clause 3 Article 54 of the Government’s Decree No. 23/2022/ND-CP dated April 05, 2022.

4. Article 8, clause 2 Article 17 of the Government’s Decree No. 10/2019/ND-CP dated January 30, 2019.

1. An enterprise for which a decision to announce the enterprise value has been issued before the effective date of this Decree but whose equitization plan has not yet been approved shall continue to formulate and submit such equitization plan to the competent authority for approval, and to implement such equitization plan in accordance with this Decree.

Enterprises specified in clause 1 Article 28 of this Decree shall be subject to audit by the State Audit Office of Vietnam and must adjust their announced enterprise values in the event of any discrepancies.

2. The equitization plans which have been approved by competent authorities in accordance with regulations of law before the effective date of this Decree shall still remain valid. Settlement of financial issues and final settlement of proceeds earned from equitization as at the date on which the joint-stock company is issued with the initial certificate of registration of joint-stock company shall comply with provisions of this Decree.

3. An enterprise’s plan for offering of shares to strategic investors which has been approved by a competent authority before the effective date of this Decree shall continue to be implemented. Regarding the remaining shares (i.e. difference between the number of shares actually offered to strategic investors and the total number of shares to be offered to strategic investors under the approved equitization plan), the owner’s representative agency shall issue a decision on adjustment of the charter capital and its structure before the first GMS is held in order to proceed with further transfer of capital in accordance with applicable regulations of law on transfer of state capital invested in joint-stock companies.

4. If an enterprise has completed the equitization process and has been converted into a joint-stock company before the effective date of this Decree but its equitization final settlement documentation has not yet been approved as at the official date of conversion into a joint-stock company, the following provisions shall apply:

a) Before December 31, 2028, pursuant to regulations of law in force at the issue date of initial certificate of registration of joint-stock company (including their amendments, if any), the owner’s representative agency shall take charge of and cooperate with relevant agencies in settling financial issues to serve the consideration and issuance of decisions on approval of the financial statements as at the official date of conversion into a joint-stock company, the final settlement of equitization costs, the final settlement of payment of benefits paid to redundant employees, the final settlement of proceeds from the equitization, and a decision to announce the actual state capital value as at the issue date of initial certificate of registration of joint-stock company, and in directing the transfer to the joint-stock company;

b) In the case of equitization of a grade-II enterprise, the Board of Members/Company’s President of the grade-I enterprise shall play the leading role in settling, and making final settlement of and decisions on the matters specified in point a clause 4 of this Article;

c) Upon the expiry of the time limit specified in point a clause 4 of this Article, the owner’s representative agency or the Board of Members/Company’s President of the grade-I enterprise shall assume responsibility before the Government or the owner’s representative agency for any failure to complete the final settlement and transfer between the equitized enterprise and the joint-stock company. Such delay in completing the final settlement and transfer between the equitized enterprise and the joint-stock company shall be considered as a basis for evaluation and classification of officials, civil servants and manager of that enterprise as prescribed;

d) For an enterprise subject to audit as prescribed in clause 1 Article 26 of Decree No. 126/2017/ND-CP, pursuant to regulations of law in force at the date on which the joint-stock company is issued with the initial certificate of registration of joint-stock company, the owner’s representative agency (in the case of equitization of a grade-I enterprise) or the Board of Members/Company’s President of the grade-I enterprise (in the case of equitization of a grade-II enterprise) shall be responsible for playing the leading role and cooperating with relevant authorities in settling the enterprise’s financial issues.

Upon completion of the inspection and settlement of the enterprise’s financial issues, the owner’s representative agency/the Board of Members/Company’s President of grade-I enterprise shall send a written request, accompanied with relevant documents, to the State Audit Office of Vietnam to conduct an audit of the equitization final settlement documentation, including: the financial statements as at the official date of conversion into a joint-stock company, the final settlement of equitization costs, the final settlement of payment of benefits paid to redundant employees, the final settlement of proceeds from the equitization, and the actual state capital value as at the official date of conversion into a joint-stock company. The State Audit Office of Vietnam shall conduct an audit of the equitization final settlement documentation upon receipt of the request from the owner’s representative agency. The time limit for completing the audit and announcing the audit results shall comply with the Law on State Audit and the procedures of the State Audit Office of Vietnam.

The equitized enterprise and the owner’s representative agency/the Board of Members/Company’s President of grade-I enterprise shall be responsible for providing explanations and adequate relevant documents to ensure the completeness and accuracy of the documents relating to the final settlement of equitization, and the settlement of financial issues prior to the approval of the final settlements, at the request of the State Audit Office of Vietnam.

Based on the audit results given by the State Audit Office of Vietnam, the owner’s representative agency/the Board of Members/Company’s President of grade-I enterprise shall consider issuing a decision to announce the actual value of state capital/the capital of grade-I enterprise in grade-II enterprise as at the official date of conversion into a joint-stock company, and determine any additional amounts required to be paid to the state budget or to the parent company - a wholly state-owned enterprise (if any), and direct the transfer to the joint-stock company.

5. Proceeds earned from the equitization of grade-II enterprise that remain after deducting the equitization costs as prescribed shall be recorded as the financial results of grade-I enterprise, except for the following amounts which must be paid to the state budget:

a) Proceeds earned from the equitization of grade-II enterprise that has been officially converted into a joint-stock company before April 01, 2022 (the effective date of the Government’s Decree No. 148/2021/ND-CP dated December 31, 2021);

b) Proceeds from initial offering of shares that are earned before April 01, 2022 (after deducting payment of benefits to redundant employees, equitization costs, the value of additionally issued shares calculated at face value, and the book value of shares offered corresponding to the grade-I enterprise’s capital invested in a grade-II enterprise).  

6. Unused amounts of enterprise arrangement support funds of parent companies of economic groups, parent companies of state corporations, and parent companies within parent company-subsidiary groups as at December 31, 2017 (including receivables and unused amounts in cash) shall be transferred to the state budget of appropriate level in accordance with applicable regulations on hierarchical management of state budget. The parent company that has obtained a competent authority’s approval for use of its enterprise arrangement support fund to make an increase in its charter capital before the effective date of this Decree shall be entitled to retain the unused amount of its enterprise arrangement support fund to increase its charter capital according to the approved plan.

7. Regarding land use plans as at the effective date of this Decree:

a) Enterprises that have land use plans upon equitization approved by competent authorities shall continue implementing the subsequent steps of the equitization process and such approved land use plans;

b) In cases where an enterprise has not yet been officially converted into a joint-stock company, and its land use plan has not been approved, the approval of such land use plan shall not be continued. The equitized enterprise shall prepare a Land Use Status Report in respect of the land areas under its management and use in accordance with regulations of law after its conversion into a joint-stock company on the principle that the land use purposes shall remain unchanged, and submit it to the owner’s representative agency for approval (in the case of a grade-I enterprise) or to the Board of Members/Company’s President of grade-I enterprise (in the case of grade-II enterprise).

8. With regard to shares sold to the trade union of the equitized enterprise before the effective date of this Decree, the trade union of the equitized enterprise shall continue holding such shares and shall not transfer them within 03 years from the official date of conversion into a joint-stock company.

9. Where, as at the date of enterprise valuation, there remains an unused amount in cash of the bonus fund for managers and controllers, the equitized enterprise shall use such amount for paying bonuses as prescribed.

The amount that remains after paying bonuses shall be reported by the equitized enterprise to the owner’s representative agency for considering and deciding to transfer it to the state budget of appropriate level in accordance with applicable regulations on hierarchical management of state budget.

10. Regarding enterprises that have completed their initial share offering prior to the effective date of this Decree:

a) Where an enterprise satisfies listing conditions as prescribed by the Law on securities, it must complete listing procedures within 90 days from the effective date of this Decree;

b) Where an enterprise does not satisfy listing conditions but qualifies as a public company as prescribed by the Law on securities, it must register for trading on the UPCOM system in accordance with the Law on securities within the time limit specified in point a of this clause;

c) Where an enterprise does not qualify as a public company, it is not required to register for trading on the UPCOM system.

11. Where the reorganization plans for enterprises undergoing reorganization in the forms prescribed in Chapter III and Chapter IV have been approved by competent authorities in accordance with regulations of law before the effective date of this Decree, such enterprises shall continue to implement the approved plans.

12. The capital transfer plans which have been approved by owner’s representative agencies in accordance with regulations of law before the effective date of this Decree shall continue to be implemented.

1. The Prime Minister shall:

a) Decide criteria for classification of state-owned enterprises and state-invested enterprises for restructuring of state capital at the request of the Ministry of Finance, on the basis of ensuring the following principles:

a1) Classification criteria must be consistent with the Communist Party’s guidelines and policies on arrangement, renovation, and enhancement of operational efficiency of state-owned enterprises.

a2) The sectors and fields in which the State invests and holds capital must comply with the provisions of Law No. 68/2025/QH15 and documents providing guidelines thereon.

a3) The restructuring of state capital must ensure alignment with the objectives of improving business efficiency, enhancing production and business capacity and competitiveness of enterprises, ensuring efficiency, preservation and development of state capital, and preventing dispersion, wastefulness, and loss of state capital and assets.

a4) In cases where specialized laws provide for the ratios of state capital in enterprises, such provisions of specialized laws shall prevail.

b) Based on the criteria for classification of state-owned enterprises and state-invested enterprises, as well as the socio-economic development objectives and tasks for each period, approve the 05-year plan for restructuring of state capital in enterprises listed in Appendix III enclosed herewith, on the basis of the Ministry of Finance’s reports consolidating proposals from the owner’s representative agencies.

2. Each owner’s representative agency shall:

a) Based on the criteria for classification of state-owned enterprises and state-invested enterprises, as well as the socio-economic development objectives and tasks for each period, approve the 05-year plan for restructuring of state capital in enterprises under its management according to the forms of capital restructuring prescribed in this Decree and relevant laws;

b) Propose plans for restructuring of state capital in enterprises in the cases specified in clause 3 Article 82, clause 4 Article 91, and clause 4 Article 96 of this Decree; seek opinions about such plans from the Ministry of Finance prior to reporting them to the Prime Minister for consideration and decision. The Ministry of Finance shall provide specific opinions on such plans proposed by the owner’s representative agency; in cases of disagreement, the reasons must be clearly stated.

3. Each state-owned enterprise shall, based on the criteria for classification of state-owned enterprises and state-invested enterprises, as well as the socio-economic development objectives and tasks for each period, approve the 05-year plan for restructuring of capital in the enterprises to which it makes capital contributions according to the forms of capital restructuring prescribed in this Decree and relevant laws.

4. Ministry of Finance, Ministry of Home Affairs, the State Bank of Vietnam and other relevant authorities shall, within the ambit of their assigned functions and tasks, be responsible for providing guidance on the implementation of this Decree.

The Government authorizes the Minister of Finance to provide guidance on the implementation of this Decree in accordance with Article 61 of the Law on Promulgation of Legislative Documents.

5. Where any difficulties or issues arise in relation to the matters within the scope of this Decree but are not yet provided for, and fall under the Government’s jurisdiction pursuant to the Law No. 68/2025/QH15, the Ministry of Finance shall, on the basis of proposals from owner’s representative agencies, prepare and submit consolidated report on such difficulties or issues to the Government for consideration and decision.

6. Ministers, heads of ministerial-level agencies, heads of Governmental agencies, Chairpersons of People’s Committees of provinces or central-affiliated cities, and enterprises, direct state owner’s representatives, and state capital representatives shall be responsible for the implementation of this Decree./.