Nghị định 140/2020/NĐ-CP sửa đổi Nghị định 126/2017/NĐ-CP về chuyển doanh nghiệp nhà nước và công ty trách nhiệm hữu hạn một thành viên do doanh nghiệp nhà nước đầu tư 100% vốn điều lệ thành công ty cổ phần; Nghị định 91/2015/NĐ-CP

DECREE

AMENDMENTS TO THE GOVERNMENT’S DECREE NO. 126/2017/ND-CP DATED NOVEMBER 16, 2017 ON CONVERSION OF STATE-OWNED ENTERPRISES AND WHOLLY STATE-OWNED SINGLE-MEMBER LIMITED LIABILITY COMPANIES INTO JOINT-STOCK COMPANIES, THE GOVERNMENT’S DECREE NO. 91/2015/ND-CP DATED OCTOBER 13, 2015 ON STATE CAPITAL INVESTMENT IN ENTERPRISES, USE AND MANAGEMENT OF CAPITAL AND ASSETS IN ENTERPRISES, AND THE GOVERNMENT’S DECREE NO. 32/2018/ND-CP DATED MARCH 08, 2018 PROVIDING AMENDMENTS TO DECREE NO. 91/2015/ND-CP

Pursuant to the Law on Government Organization dated June 19, 2015 and the Law on Amendments to the Law on Government Organization and the Law on Local Government Organization dated November 22, 2019;

Pursuant to the Law on management and use of state capital invested in manufacturing and business operations of enterprises dated November 26, 2014;

Pursuant to the Law on Enterprises dated November 26, 2014;

Pursuant to the Law on Investment dated November 26, 2014;

Pursuant to the Law on Public Investment dated June 13, 2019;

Pursuant to the Law on Securities dated June 29, 2006; the Law on Amendments to the Law on Securities dated November 24, 2010;

Pursuant to the Law on land dated November 29, 2013;

At the request of the Minister of Finance;

The Government promulgates the Decree providing amendments to the Government’s Decree No. 126/2017/ND-CP dated November 16, 2017 on conversion of state-owned enterprises and wholly state-owned single-member limited liability companies into joint-stock companies, the Government’s Decree No. 91/2015/ND-CP dated October 13, 2015 on state capital investment in enterprises, use and management of capital and assets in enterprises, and the Government’s Decree No. 32/2018/ND-CP dated March 08, 2018 providing amendments to the Decree No. 91/2015/ND-CP.

Article 1. Amendments to the Government’s Decree No.126/2017/ND-CP dated November 16, 2017 on conversion of state-owned enterprises and wholly state-owned single-member limited liability companies into joint-stock companies (hereinafter referred to as “Decree No.126/2017/ND-CP”)

1. Clause 2 Article 2 is amended as follows:

“2. Wholly state-owned enterprises include:

a) Single-member limited liability companies 100% of charter capital of which is held by the State that are parent companies of state economic corporations, parent companies of state incorporations or parent companies in groups of parent company – subsidiary companies;

b) Independent single-member limited liability companies 100% of charter capital of which is held by the State.”

2. Article 4 is amended as follows:

a) Clause 1 is amended as follows:

“1. The enterprises prescribed in Clause 2 and Clause 3 Article 2 hereof may carry out equitization when meeting the following conditions:

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

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

c) If an enterprise is subject to the rearrangement or settlement of house, land in accordance with regulations of the law on management and use of public property, the plan for rearrangement or settlement of house, land approved by a competent authority as prescribed in the law on management and use of public property must be available.

In addition to the plan for rearrangement or settlement of house, land regarding the non-agricultural land area approved by a competent authority as prescribed in the law on management and use of public property, an agriculture or forestry company 100% charter capital of which is held by the State shall be required to have the land use plan regarding the agricultural land area approved by a competent authority according to the Government’s Decree No. 118/2014/ND-CP dated December 17, 2014 and its amending or superseding documents.”

b) Clause 2 is amended as follows:

“2. Upon completion of financial settlement and enterprise revaluation as prescribed in Chapter II and Chapter III hereof, if an enterprise’s actual value is lower than its payables, the representative body of the State capital ownership in the enterprise (hereinafter referred to as “representative body”) shall cooperate with Vietnam Debt and Asset Trading Corporation and creditors to formulate a feasible and efficient debt trading plan to serve the enterprise restructuring or adopt another conversion form as prescribed by law.”

3. Article 6 is amended as follows:

a) The following contents are added to Clause 2:

“Foreign investors are entitled to pay deposits in foreign currencies through bank transfer for 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.”

b) Point c Clause 3 is amended as follows:

“c) Based on the scale of charter capital, the nature of business lines and enterprise development requirements, the Equitization Steering Board (hereinafter referred to as “Steering Board”) shall request the regulatory authority competent to approve the equitization plan to decide whether or not strategic investors are allowed to buy shares from the initial offering. If strategic investors are allowed to buy shares from the initial offering, the regulatory authority competent to approve the equitization plan shall decide criteria for selection of strategic investors and percentage of shares sold to strategic investors included in the equitization plan.

Procedures for selection of strategic investors of an equitized enterprise are performed according to Appendix I enclosed herewith to ensure that the selection and organization of registration of share purchase by strategic investors are performed before the time of disclosure of information about the initial public offering (IPO).”

4. Clause 5 is added to Article 8 as follows:

“5. If an enterprise must undergo the enterprise revaluation, or the equitization is suspended or terminated under a decision of the Prime Minister, the representative body shall consider settling equitization expenses (which must be proved by reasonable and valid receipts) which shall be recorded as enterprise’s expenses and not be deducted when determining the enterprise’s taxable incomes.”

5. Clause 2 Article 11 is amended as follows:

“2. When preparing documents for the IPO, the equitized enterprise shall also prepare documents for depositing and trading of shares on the securities market.  Listing at the Stock Exchange (SE) shall be carried out after the equitized enterprise has been converted into a joint-stock company and met all listing conditions in accordance with regulations of the Law on securities.”

6. Article 12 is amended as follows:

a) Clause 1 is amended as follows:

“1. The equitized enterprise may hire a consulting firm to serve the determination of the enterprise’s value and starting price and development of the equitization and initial offering plans. The representative body shall assume responsibility to decide the selection of consulting firm and may authorize the Steering Board to perform all or some of responsibilities of investor/procuring entity in accordance with regulations of the Law on bidding in hiring of consulting firm (except the approval for contractor selection result).”

b) Clause 3 is amended as follows:

“3. The representative body shall decide to select the consulting firm that meets the standards laid down in Clause 5 and Clause 6 of this Article to determine the enterprise’s value according to the following rules:

a) If the consulting contract package is worth less than VND 500 million, the representative body shall decide to select the consulting firm by direct contracting;

b) If the consulting contract package is worth more than VND 500 million to VND 03 billion, upon the end of the prescribed time limit for competitive bidding, if there is only a bidder, the representative body shall decide to select the consulting firm by direct contracting;

c) With regard a consulting contract package other than the one prescribed in Point a or Point b of this Clause, the representative body shall decide to organize bidding for selection of consulting firm to determine the enterprise’s value in accordance with regulations of the Law on Bidding.”.

c) Point a Clause 5 is amended as follows:

 “a) It is an audit organization, securities company or valuation enterprise that is duly established and operating in Vietnam in accordance with regulations of law and holds a certificate of eligibility to provide valuation services issued by the Ministry of Finance in accordance with regulations of laws on pricing and valuation.”

7. The following contents are added to Clause 2 Article 13:

“With regard to certain specialized assets of which the feasibility and efficiency of inventory and assessment of actual conditions cannot be ensured, the enterprise shall formulate the plan for inventory and assessment of actual conditions of such assets and submit it to the representative body for getting opinions from relevant specialized agencies. Within 20 working days from the receipt of the request of the representative body, relevant specialized agencies shall provide their opinions in writing about the plan for inventory and assessment of actual conditions of such assets. Based on the opinions given by relevant specialized agencies, the representative body shall decide an appropriate asset inventory plan and assume responsibility for inventory results.”

8. Clause 4 Article 14 is amended as follows:

“4. Welfare construction works, including nurseries, kindergartens, health facilities and other welfare facilities invested with funding from the reward and welfare fund, shall be managed and used by the trade union of the joint-stock company to serve 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 these assets, based on the authorization of the employee representative and trade union, the enterprise shall carry out liquidation and transfer of 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 reward and welfare fund.

If the enterprise no longer uses employee housing constructed with funding from the welfare fund, including those constructed with funding from state budget, such housing shall be transferred to the local house and land agency for management."

9. Article 15 is amended as follows:

a) The following contents are added to the first paragraph of Clause 1:

“With regard to receivables from users of postpaid television, telecommunication and information technology services (domestic and overseas services) which are arisen regularly in a large quantity and generate considerable work volume, time and expenses for verification of debts with every user, the representative body shall make decision on such debt verification according with actual conditions (based on accounting books/records and the information technology system employed to manage clients of the equitized enterprise.)”

b) Clause 2 is amended as follows:

“2. If some receivables are proved by adequate documents but not yet verified by the time of valuation of the equitized enterprise, the President or Board of Members of the equitized enterprise shall give explanations about such debts and determine responsibility of entities for verification of such debts before the equitized enterprise is issued with the initial certificate of registration of joint stock company (except collected debts proved by valid documents) and submit a report to the representative body for determining such debts in the enterprise's value according to accounting books. The value of such debts shall be also specified in the decision on approval for the enterprise's value and the equitization plan which are used as the basis for sale of shares by auction.

After the equitized enterprise has been issued with the initial certificate of registration of joint stock company, when preparing financial statements for the joint-stock company, if debts have been not yet verified although verification procedures have been completed, the President or Board of Members of the equitized enterprise shall review and classify such debts into bad debts and remaining receivables as follows:

- With regard to debts which have been not yet verified although verification procedures have been completed and are classified as bad debts as prescribed, responsibility for compensation by relevant entities must be considered. The value of remaining debts (after offsetting compensation paid by entities and provisions for bad debts - if any) shall be recorded as expenses of the equitized enterprise and such debts shall be transferred to Vietnam Debt and Asset Trading Corporation for settling in accordance with regulations of law.

- Other debts which have been not yet verified although verification procedures have been completed shall be transferred to the joint-stock company for monitoring and collection as prescribed.”

c) The following contents are added to Clause 3:

“Debts which are not included in the value of the equitized enterprise which is a wholly state-owned commercial bank or wholly state-owned telecommunication enterprise (including bad debts which have been settled by provisions within 05 years preceding the time of enterprise valuation) shall be monitored, managed and collected by the enterprise. When such debts are collected, the commercial joint stock bank or the equitized telecommunication enterprise is entitled to retain a part of collected amounts according to Ministry of Health’s regulations applicable to Vietnam Debt and Asset Trading Corporation to cover expenses incurred from the collection of debts and shall transfer the remaining amounts to the enterprise arrangement and development fund.”

10. Clause 1 Article 16 is amended as follows:

“1. The equitized enterprise shall check and verify all payables before the valuation of the equitized enterprise.

If some payables are proved by adequate documents but not yet verified by the time of valuation of the equitized enterprise, the President or Board of Members of the equitized enterprise shall give explanations about such debts and determine responsibility of entities for verification of such debts before the equitized enterprise is issued with the initial certificate of registration of joint stock company (except debts paid to entities as proved by valid documents) and submit a report to the representative body for determining such debts in the enterprise's value according to accounting books. The value of such debts shall be also specified in the decision on approval for the enterprise's value and the equitization plan which are used as the basis for sale of shares by auction.

After the equitized enterprise has been issued with the initial certificate of registration of joint stock company, when preparing financial statements for transferring from a wholly state-owned enterprise to a joint-stock company, if creditors fail to confirm debts at the request of the enterprise, such debts payable shall be recorded as an increase in state capital. The joint-stock company (converted from a wholly state-owned enterprise) shall keep records, inherit, monitor and pay such debts at the request of creditors and record the paid debts as expenses incurred by the enterprise in the period.

With regard to wholly state-owned commercial banks, deposits and financial instruments (including certificates of deposit, treasury bills, promissory notes and bonds) shall be inventoried and verified according to accounting books. Deposit balances of clients that are juridical persons and saving deposits, individual deposits and financial instruments must be compared with accounting books kept by the bank and verified with clients. After the equitized enterprise has been issued with the initial certificate of registration of joint stock company, when preparing financial statements for transferring from a wholly state-owned enterprise to a joint-stock company, if such debts are not yet verified and confirmed by clients although verification procedures have been completed, the commercial joint stock bank shall inherit, monitor, manage and pay debts at the request of legal creditors in accordance with regulations of law.

With regard to put up as collateral, prepaid amounts by users of postpaid television, telecommunication and information technology services, and deposits for ensuring the provision of intermediary payment services as prescribed by law which generate considerable work volume, time and expenses for verification of debts with clients, the representative body shall request the enterprise to submit report and make decision on such debt verification according with actual conditions and regulations of law (based on accounting books/record, contracts for provision of television, telecommunication and information technology services, and intermediary payment services, and the information technology system employed to manage clients of the equitized enterprise).”

11. Clause 1 Article 22 is amended as follows:

“1. The consulting firm providing enterprise valuation service shall select the asset-based approach and at least one other approach to determine the enterprise’s value in accordance with regulations of laws on pricing and valuation for submission to the representative body for consideration.”

12. Clause 3 Article 25 is amended as follows:

“3. After 09 months from the date of disclosure of the enterprise’s value, if the enterprise fails to perform the IPO, the enterprise revaluation shall be required, except cases decided by the Prime Minister at the request of the representative body provided the IPO must be performed within 12 months from the date of disclosure of the enterprise’s value.”

13. Article 27 is amended as follows:

a) Clause 1 is amended as follows:

“1. Total actual value of the equitized enterprise is the value of its total assets at the time of determination of the enterprise’s value after the enterprise revaluation while taking into account their profitability.

The actual value of the owner’s equity at the equitized enterprise specified in the decision on disclosure of the enterprise’s value is total actual value of the equitized enterprise after deducting debts payable and remaining funding for non-profit activities (if any).”

b) Clause 2 is amended as follows:

“2. When a parent company of a state economic corporation, a parent company of a state incorporation or a parent company in a group of parent company – subsidiary companies undergoes the equitization, the owner’s equity at the equitized enterprise shall be total actual capital of the owner at that parent company.”

c) Clause 5 is amended as follows:

“5. When carrying out the enterprise valuation, the value of the equitized enterprise’s investments at joint-stock companies from which it receives shares without making any payments must be re-determined according to Article 32 hereof in respect of total shares owned by the equitized enterprise (including shares received, managed and monitored on notes to financial statements) and the quantity of shares to be received after the enterprise’s value has been determined according to the Resolution of the General Meeting of Shareholders (GMS) by the time of enterprise valuation.”

14. Clause 4 Article 29 is amended as follows:

“4. The value of allocated land use rights and goodwill at the time of enterprise valuation.”

15. Article 30a is added as follows:

“Article 30a.  Plan for land use upon equitization

1. The land use plan upon equitization is the collection of proposals on land use form in conformity with local land use planning/plan and construction planning (if any) which have been approved and published with respect to land areas managed and used by the equitized enterprise and single-member limited liability companies 100% of charter capital of which is held by the equitized enterprise by the time of the enterprise valuation. The land use plan shall be submitted to competent authorities prescribed in Clause 5 of this Article for consideration.

2. Based on the plan for rearrangement or settlement of house, land formulated according to the law on management and use of public property, the land use plan formulated according to Decree No. 118/2014/ND-CP and approved by a competent authority, the demands for land of the enterprise at the time of equitization and enterprise valuation, the Steering Board shall formulate the land use plan upon equitization which covers entire land areas managed and used by the equitized enterprise and single-member limited liability companies 100% of charter capital of which is held by the equitized enterprise by the time of the enterprise valuation (including land areas which are subject to neither the rearrangement or settlement of house, land prescribed in the law on management and use of public property nor the land use plan prescribed in Decree No. 118/2014/ND-CP, if any).

3. The equitized enterprise shall request the representative body (or the Board of Members or the enterprise's President if it is an enterprise prescribed in Clause 3 Article 2 hereof or a wholly state-owned enterprise prescribed in Clause 2 Article 2 hereof respectively) to request local governments (of provinces where land areas managed and used by the enterprise are located) to give their opinions about the land use plan upon equitization.

4. Within 03 months from the receipt of the request of the representative body as prescribed in Clause 3 of this Article, People’s Committees of provinces or central-affiliated cities (where land areas managed and used by the enterprise are located) shall give their written opinions about the land use plan upon equitization.

People’s Committees of provinces or central-affiliated cities (where land areas managed and used by the enterprise are located) shall give their opinions about the land areas to be used by the enterprise after equitization and specific prices of allocated land areas as prescribed by the Law on land which shall be used as the basis for determining the enterprise’s value, and also assume responsibility to take actions against relevant entities for their delayed provision of opinions about the land use plan upon equitization resulting in the enterprise revaluation as prescribed in Clause 1 Article 23 hereof. Such delayed provision of opinions about the land use plan shall be considered as a basis for assessment and ranking of officials in accordance with regulations of the Law on officials.

Based on the equitized enterprise’s approved plan for rearrangement or settlement of house, land formulated according to the law on management and use of public property and land use plan formulated according to Decree No. 118/2014/ND-CP, demands for land under the land use plan upon equitization, local land use planning/plan and construction planning (if any), People’s Committees of provinces or central-affiliated cities (where land areas managed and used by the enterprise are located) shall give their opinions about local land areas to be used by the enterprise after the equitization. Opinions given by People’s Committees of provinces or central-affiliated cities (where land areas managed and used by the enterprise are located) include:

- The consent to the land use plan upon equitization with respect to land areas to which there are no changes compared to the plan for rearrangement or settlement of house, land approved by a competent authority according to the law on management and use of public property and the land use plan formulated according to Decree No. 118/2014/ND-CP.

- Opinions about the compliance with local land use planning/plan and construction planning (if any), land use forms and purposes of land areas to which there are no changes compared to the plan for rearrangement or settlement of house, land and the land use plan formulated according to Decree No. 118/2014/ND-CP, land areas allocated or transferred to or leased by the enterprise after the plan for rearrangement or settlement of house, land and the land use plan formulated according to Decree No. 118/2014/ND-CP have been approved until the time of enterprise valuation, and those which are subject to neither the rearrangement or settlement of house, land prescribed in the law on management and use of public property nor the land use plan prescribed in Decree No. 118/2014/ND-CP, if any.

If the land use plan upon equitization is not yet conformable with local land use planning/plan and construction planning (if any) or the land use purposes defined in the approved plan for rearrangement or settlement of house, land prescribed in the law on management and use of public property or the land use plan prescribed in Decree No. 118/2014/ND-CP, the enterprise shall make adjustments to the land use plan. If the enterprise fails to make adjustments to the land use plan, the representative body shall request the enterprise to return such land areas to the Government in accordance with regulations of the Law on land to serve other purposes. The assets on the land areas to be returned to the Government (if any) shall be transferred to local governments for management. The remaining value of such assets as recorded on accounting books at the time of enterprise valuation shall be recorded as decrease in assets and decrease in the owner’s equity.

- Specific prices of allocated land areas, as prescribed in Clause 1 Article 30 hereof, at the time of enterprise valuation as prescribed in Clause 3 and Point d Clause 4 Article 114 of the Law on land.

5. Within 01 month from the receipt of adequate opinions from local governments about the land use plan upon equitization as prescribed in Clause 4 of this Article, the representative body shall issue a decision to approve the land use plan upon equitization and ensure that that decision must be issued before the decision on disclosure of the enterprise’s value is made. With regard to the enterprises prescribed in Clause 3 Article 2 hereof, the Boards of Members or Presidents of wholly state-owned enterprises prescribed in Clause 2 Article 2 hereof shall issue decisions to approve their land use plans upon equitization.

Representative bodies or Boards of Members or Presidents of wholly state-owned enterprises prescribed in Clause 2 Article 2 hereof shall assume responsibility to take actions against relevant entities for their failure to complete the approval for land use plans upon equitization by the prescribed deadline resulting in the enterprise revaluation as prescribed in Clause 1 Article 23 hereof. Such violations shall be considered as a basis for assessment and ranking of officials and enterprise managers in accordance with regulations of law.

6. With regard to land areas allocated or transferred to or leased by the equitized enterprise after the enterprise valuation and by the time of initial registration of the joint-stock company, the equitized enterprise shall rearrange or settle such land areas in accordance with regulations of law on management and use of public property, complete procedures for land allocation or lease by the Government and fulfill financial obligations in accordance with regulations of law on land and relevant laws.

7. The Ministry of Natural Resources and Environment shall provide guidance on contents of the land use plan upon equitization."

16. Article 30 is amended as follows:

a) The first paragraph of Clause 2 is amended as follows:

“2. With regard to the remaining land area (after deducting the land area prescribed in Clause 1 of this Article) according to the land use plan upon equitization approved by a competent authority as prescribed in Article 30a hereof, the enterprise shall enter into a fixed-term land lease in accordance with regulations of the Law on land and pay annual land rents.

The joint-stock company shall pay land rents in accordance with regulations of the Law on land and the paid land rents shall not be included in the value of the equitized enterprise.”

b) Clause 4 is amended as follows:

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

17. The following contents are added to Point b Clause 3 Article 32:

“The representative of the equitized enterprise’s capital invested in another enterprise shall review and give opinions about changes in the period for which the invested enterprise’s financial statements are not prepared at the same time with the valuation of the equitized enterprise for reporting the representative body for determination of the value of the equitized enterprise’s capital invested in other enterprises.”

18. Clause 3 Article 34 is amended as follows:

“3. At least 01 month before the initial offering, the Steering Board shall cooperate with SE or auction organization to disclose information at the enterprise, the auction place and on means of mass media and the Government’s web portal.”

19. Article 37 is amended as follows:

“Article 37. Settlement of unsold shares and adjustment of charter capital and charter capital structure according to share selling results

1. Based on the equitization plan approved by a competent authority, the Steering Board shall sell shares to employees and trade union at the enterprise before the public offering. The Steering Board shall report the quantity of shares which the employees and trade union refuse to buy according to the equitization plan to the representative body for offering to the public through auction.

2. Based on the actual result of share sale, the Steering Board shall request the representative body to issue decision to adjust the charter capital and charter capital structure according to the approved equitization plan.

In case the equitization is performed by transferring a part of the state capital and issuing additional shares or by transferring the entire state capital and issuing additional shares, the quantity of shares sold shall be the quantity of shares additionally issued according to the approved equitization plan; the quantity of shares sold to the entities prescribed in Point a and Point c Clause 1 Article 42 of Decree No. 126/2017/ND-CP shall be considered as shares offered to reduce state capital.

3. If there are no investors registering for buying shares, based on the result of sale of shares to employees and trade union at the enterprise, the enterprise shall follow procedures for being converted into a joint-stock company and adjusting its charter capital and charter capital structure according to Clause 2 of this Article.

4. If there is only one investor registering for buying shares, the Steering Board shall reach an agreement on sale of shares to the registered investor according to his/her registered quantity and at the price not lower than the starting price. If the investor refuses to buy shares, the equitized enterprise shall comply with the provisions in Clause 3 of this Article.

5. After the public auction, if all successful bidders refuse to buy shares, the equitized enterprise shall comply with the provisions in Clause 3 of this Article.

6. If only a part of shares is sold at the public auction, the remaining shares (including shares refused by successful bidders) shall be settled as follows:

a) The Steering Board shall notify and reach an agreement on sale of shares to the investors that have lawfully participated in the auction (except bidders that are successful at the auction for their entire registered quantity of shares) according to their registered quantity of shares and their bids which are considered in descending order.

b) If shares remain after they are sold according to Point a Clause 6 of this Article, the Steering Board shall continue notifying and reaching an agreement on sale of shares to the investors that are successful at the auction for their entire registered quantity of shares (except successful bidders that have refused to buy shares) according to their bids which are considered in descending order.

c) After shares are sold according to Point a and Point of this Clause, the remaining shares shall be settled by the equitized enterprise according to Clause 3 of this Article.”

20. Point a and Point d Clause 1 Article 39 are amended as follows:

“a) Within 05 working days from the prescribed deadline of payment by investors participating in the public auction, the auction organization shall transfer the entire proceeds from the IPO to the equitized enterprise in order to make payments to redundant employees, cover equitization expenses as estimated in the approved equitization plan, and retain an amounts equal to the value of additionally issued shares calculated according to the face value and primary price (the book value of sold shares corresponding to the rank-I enterprise’s investment at a rank-II enterprise when it is equitized into a rank-II enterprise). The remaining amounts shall be paid to the enterprise arrangement and development fund.

b) Within 05 working days from the prescribed deadline of payment by trade union and employees, the Steering Board shall transfer the entire proceeds from the offering of shares to the trade union and employees to the enterprise arrangement and development fund.”

21. Article 42 is amended as follows:

a) Point e is added to Clause 1 as follows:

“e) Total value of shares sold at preferential price to employees calculated at the face value shall not exceed the owner’s equity on accounting book at the time of enterprise valuation.”

b) Point dd is added to Clause 2 as follows:

“dd) The quantity of shares to be additionally purchased by employees as prescribed in Point a Clause 2 of this Article shall be determined according to their commitment to work until their retirement ages in normal working conditions prescribed by the Labor Code.”

22. Clause 4 Article 45 is amended as follows:

a) Point a is amended as follows:

- The ninth minus (-) bullet point is amended as follows:

“- Review and submit report to the representative body for issuing decisions to select consulting firm, auction organization, disclose the enterprise’s value and approve the equitization plan.”

- The fourteenth minus (-) bullet point is amended as follows:

“- Cooperate with relevant agencies to review and submit reports to the representative body to issue decision to approve financial statements at the time of conversion into the joint-stock company; statements of equitization costs; statements of supports paid to redundant employees; statements of proceeds from the equitization and decision to disclose the actual value of the state capital at the time when the joint-stock company is issued with the initial certificate of registration of joint-stock company.”

b) Point b is amended as follows:

“b) Composition of Steering Boards shall be decided by Ministers, heads of ministerial agencies, heads of Governmental agencies, Chairpersons of provincial People’s Committees, Boards of Members of parent companies of state economic corporations, parent companies of state incorporations or parent companies in groups of parent company – subsidiary companies.

Members of the Steering Boards of the entities mentioned in Point b Clause 1 of this Article may include representatives of the Steering Board for Enterprise Innovation and Development and the Ministry of Finance (if necessary).”

23. Article 47 is amended as follows:

“The equitization shall be performed according to the provisions in Appendix I enclosed with the Government's Decree No. 140/2020/ND-CP dated November 30, 2020.”

24. Article 48 is amended as follows:

a) Clause 1 is amended as follows:

“1. Enterprises whose value has been disclosed before January 01, 2018 but that do not yet obtain approved equitization plans shall adjust book values according to their disclosed values (unless such adjustment is not allowed according to a decision issued by a competent authority) and formulate and submit their equitization plans to competent authorities in accordance with regulations herein. The enterprises prescribed in Clause 1 Article 26 hereof must undergo the state audit and adjust the disclosed enterprise’s value if there is any difference.”

b) Clause 3 is amended as follows:

“3. If the value of geographic location advantage of the leased land of an enterprise that has been equitized before the effective date of the Government’s Decree No. 59/2011/ND-CP dated July 18, 2011 has been included in its value and recorded as an increase in state capital invested in the enterprise but not yet used up to cover its business expenses and land rents, the joint-stock company shall include the remaining value of geographic location advantage of the leased land in its expenses when calculating corporate income tax within 03 years from the effective date of the Government's Decree No. 140/2020/ND-CP dated November 30, 2020. The annually allocated amounts must not result in business loss incurred by the joint-stock company. After 03 years, the remaining value may be also included in its expenses and shall be not deducted when determining taxable incomes. The joint-stock company shall pay land rents in accordance with regulations of the Law on land.”

c) Clause 5 is amended as follows:

“5. The equitized enterprises that have been operating in the form of joint-stock companies before the effective date of Decree No. 126/2017/ND-CP (i.e. January 01, 2018) are not subject to the regulations herein.

Before June 30, 2021, pursuant to regulations and laws in force at the time of issuance of initial certificates of registration of joint-stock company, representative bodies shall take charge and cooperate with relevant agencies to settle financial issues to serve the issuance of decisions to approve financial statements of these enterprises when they officially operate as joint-stock companies, statements of equitization expenses, statements of supports paid to redundant employees, statements of proceeds from equitization and decisions to disclose actual values of state capital at the time they are issued with initial certificates of registration of joint-stock company, and direct the transfer of such amounts to joint-stock companies.

Over the abovementioned deadline, representative bodies shall assume responsibility before the Government for their failure to complete statement and transfer to joint stock companies; such violation shall be considered as a basis for assessment and ranking of officials in accordance with regulations of the Law on officials.”

d) Clause 8 is added as follows:

“8. With regard to an enterprise which has been equitized before January 01, 2018 and has calculated and included the value of goodwill in the enterprise’s value, the joint-stock company shall continue allocating the value of goodwill to its expenses when calculating corporate income tax within a maximum period of 03 years from the effective date of the Government’s Decree No. 140/2020/ND-CP dated November 30, 2020.”

dd) Clause 9 is added as follows:

“9. When the Government’s Decree No. 140/2020/ND-CP dated November 30, 2020 comes into force, enterprises that have land use plans upon equitization approved by competent authorities shall continue implementing equitization procedures and approved land use plans upon equitization.”

e) Clause 10 is added as follows:

“10. With regard to shares sold to the trade union at the equitized enterprise before January 01, 2018, the trade union of the equitized enterprise shall hold and not transfer such shares within 03 years from the time the equitized enterprise is officially converted into a joint-stock company.”

25. Clause 2 Article 49 is amended as follows:

“2. Single-member limited liability companies 100% of charter capital of which is held by political organizations, socio-economic organizations, socio-political organizations or public service providers and which have been duly established and operating in accordance with the Law on enterprises may be converted into joint-stock companies in accordance with regulations herein.”

26. Appendix I - Procedures for conversion of a wholly state-owned enterprise into a joint-stock company enclosed herewith shall supersede Appendix II enclosed with Decree No. 126/2017/ND-CP.

Article 2. Amendments to Government's Decree No. 91/2015/ND-CP dated October 13, 2015 on state capital investment in enterprises, use and management of capital and assets in enterprises (hereinafter referred to as “Decree No. 91/2015/ND-CP”) and Government’s Decree No. 32/2018/ND-CP dated March 08, 2018 providing amendments to Decree No. 91/2015/ND-CP (hereinafter referred to as “Decree No. 32/2018/ND-CP”)

1. Clause 2 Article 2 of Decree No. 91/2015/ND-CP is amended as follows:

“2. Wholly state-owned enterprises include:

a) Single-member limited liability companies 100% of charter capital of which is held by the State that are parent companies of state economic corporations, parent companies of state incorporations or parent companies in groups of parent company – subsidiary companies.

b) Independent single-member limited liability companies 100% of charter capital of which is held by the State.”

2. Article 4 of Decree No. 91/2015/ND-CP, as amended at the second minus (-) bullet point of Point 8 Clause 1 Article 1 of Decree No. 32/2018/ND-CP, is amended as follows:

"- Lot auction means an auction of a lot of shares/stakes in which bidders are required to bid for the entire lot of shares/stakes put up for auction.  The capital owner shall decide to divide total shares/stakes to be transferred into lots for putting up at auction.”

3. Article 5 of Decree No. 91/2015/ND-CP, as amended in Clause 2 Article 1 of Decree No. 32/2018/ND-CP, is amended as follows:

a) Paragraph h Point 1 is amended as follows:

“h) Others, subject to the Prime Minister’s decision issued at the request of representative bodies.”

b) Paragraph e Point 3 is amended as follows:

“e) Others, subject to the Prime Minister’s decision issued at the request of representative bodies.”

c) Point 4 is amended as follows:

“4. Wholly state-owned enterprises that apply high technologies, make large investments, operate in banking industry, stimulate rapid growth of other industries and sectors and the whole economy.”

4. The following contents are added to Point a Clause 2 Article 6 of Decree No. 91/2015/ND-CP:

“In case the state capital invested in establishment of a wholly state-owned enterprise is derived from state budget, the representative body shall, based on the enterprise establishment decision issued by a competent authority, send a request for opinions to the same-level finance agency for submission to competent authorities according to the delegated authority over the state budget and regulations of law on state budget included in the annual estimate of state budget expenditures (regarding state investment in enterprises).”

5. Article 9 of Decree No. 91/2015/ND-CP is amended as follows:

“Article 9. Methods of determining charter capital of operating wholly state-owned enterprises

1. The charter capital of a wholly state-owned enterprise shall be contributed within a permitted period of 03 years from the year in which the charter capital adjustment is approved by the representative body under the plan for additional investment to increase charter capital.

2. An increased amount of charter capital of a wholly state-owned enterprise shall be determined in proportion to funding sources coming from the state budget, the enterprise’s development investment fund, and enterprise arrangement and development fund which have been specified in projects for formation of assets used for manufacturing and trading activities that fall within the main scope of operations, and directly for main business sectors under the competent authority’s ratification or decision on investment guidelines within a minimum duration of 03 years from the year of determination of charter capital adjustment, including in-progress investment projects approved by competent authorities.

3. Based on 05-year production and business plans and strategies approved under the decision on investment guidelines by competent authorities, the maximum increased amount of charter capital shall not exceed 30% of the difference between expected revenues generated from manufacturing and trading of products, commodities or services in the following third year and realized revenues generated from manufacturing and trading of products, commodities or services defined in the audited financial statements of the enterprise prepared in the year immediately preceding the year of determination of the charter capital adjustment.

4. An increased amount of charter capital shall be the value of other transferred assets invested by funding derived from the state budget; government-contributed aids (those used for residential relocation, rearrangement or settlement of house, land and investment in technical infrastructural facilities of industrial zones) in order to implement projects for investment in construction, improvement and refurbishment of manufacturing and trading facilities; the increase in asset value due to asset revaluation made under the policies approved by the Prime Minister.

5. The charter capital of a wholly state-owned enterprise shall be determined according to the following formula:

6. The charter capital of enterprises operating in specialized sectors shall be determined in accordance with regulations of specialized laws.”

6. Article 10 of Decree No. 91/2015/ND-CP and Clause 3 Article 1 of Decree No. 32/2018/ND-CP are amended as follows:

“Article 10. Procedures for preparation and approval of plans for additional investment to increase charter capital of operating wholly state-owned enterprises

1. A wholly state-owned enterprise shall prepare a plan for additional investment to increase charter capital, which includes the re-determined charter capital and funding sources for making additional investment as prescribed in Article 9 hereof, and then send it to the representative body. An application for approval of the plan for additional investment to increase charter capital shall include:

a) The document certifying the re-determined charter capital and proposing funding sources for making additional investment to increase charter capital of the enterprise;

b) The report on assessment of financial status and business performance of the enterprise and explanations about objectives, necessity and socio-economic effectiveness generated from the additional investment made to increase charter capital;

c) The written explanation about the method of determining adjusted charter capital (accompanied by the copy of decision on approval for investment projects in main business sectors of the wholly state-owned enterprise; the copies of 05-year production and business plans and strategies approved under the decision on investment guidelines by competent authorities);

d) The copy of the competent authority’s decision on announcement of enterprise ranking results in 03 years immediately preceding the year on which the charter capital adjustment was determined;

dd) The copies of the audited financial statements in 03 years preceding the year on which the charter capital adjustment was determined.

e) The written explanation about funding sources for making additional investment to increase charter capital and adjustment of charter capital.

2. Within 15 working days from the receipt of an adequate application from the enterprise, the representative body shall check the application’s compliance with laws and appraise reports, assessments and determination of the charter capital, and explanations about funding sources for making additional investment to increase charter capital included in the application, and then send a written request (enclosed by the documents mentioned in Clause 1 of this Article) to the same-level finance agency for its opinions.

If the enterprise’s application is unsatisfactory, within 07 days from the receipt of the application, the representative body shall request the enterprise to complete it.

3. Within 15 working days from the receipt of the written request from the representative body (enclosed with the application prescribed in Clause 1 of this Article), the same-level finance agency shall give its written opinions about the enterprise’s plan for additional investment to increase charter capital to the representative body.

If the same-level finance agency does not accept the enterprise’s application for approval of the plan for additional investment to increase charter capital, it shall give a written response (in which reasons for such refusal must be indicated) to the representative body and the enterprise within 10 working days from the receipt of the written request (enclosed with the application) from the representative body.

4. Based on the opinions given by the same-level finance agency, the representative body shall request the wholly state-owned enterprise to complete the application which shall be then submitted by the representative body to the Prime Minister for making decision according to the authority defined in Article 15 of the Law on management and use of state capital invested in manufacturing and business operations of enterprises, except the cases prescribed in Clause 6 of this Article. To be specific:

a) If an enterprise is established under the Prime Minister's decision, the Prime Minister shall consider and decide the plan for additional investment to increase charter capital with funding from state budget, the enterprise’s development investment fund, and enterprise arrangement and development fund.

b) If an enterprise is established under a decision of or is managed by the representative body, the Prime Minister shall consider and decide additional investment guidelines for increasing of its charter capital. Based on the Prime Minister’s decision on investment guidelines, the representative body shall decide to make additional investment to increase charter capital and adjust the enterprise’s charter capital according to Article 11 hereof.

c) If the additional investment to increase charter capital is made with funding from the state budget, the enterprise’s development investment fund, and enterprise arrangement and development fund is equivalent to the investment in a project of national importance, the representative body shall submit a report to the Prime Minister for considering and reporting the National Assembly for making decision on investment guidelines. After the National Assembly issues a decision on investment guidelines, the Prime Minister shall decide the plan for additional investment to increase charter capital.

5. In case the additional investment to increase charter capital is made with funding from the state budget, based on the approved charter capital increase plan, the representative body shall send a document to the same-level finance and planning agency for submission to competent authorities according to the delegated authority over the state budget and regulations of law on state budget included in the annual estimate of state budget expenditures (regarding state investment in enterprises) as the basis for allocating funding for increasing of charter capital of a wholly state-owned enterprise.

6. In case the additional investment to increase charter capital is made with funding from the enterprise arrangement and development fund, the representative body must submit a report to the Ministry of Finance (enclosed with the application prescribed in Clause 1 of this Article) for appraisal and submission to the Prime Minister for consideration and decision.”

7. Article 11 of Decree No. 91/2015/ND-CP and Clause 4 Article 1 of Decree No. 32/2018/ND-CP are amended as follows:

“Article 11. Making additional investment to increase charter capital and adjust charter capital of an operating wholly state-owned enterprise

1. Based on the plan for additional investment to increase charter capital approved by a competent authority, the representative body shall send a written request (enclosed with the enterprise’s application approved by a competent authority as prescribed in Article 10 hereof) to the finance agency for making additional investment to increase the enterprise’s charter capital.

2. The same-level finance agency shall make additional investment to increase charter capital of the enterprise according to each funding source as follows:

a) If the funding for additional investment to increase the charter capital is derived from the state budget included in the estimate of state budget expenditures approved by a competent authority (according to the delegated authority over the state budget), the same-level finance agency shall allocate such funding from the state budget to the enterprise under procedures laid down in y the Law on State Budget.

The allocation of additional funding to increase charter capital of Vietnam National Oil and Gas Group with profit from oil and gas activities allocated to the home country shall comply with the Government’s Decree on promulgation of regulations on financial management of Vietnam National Oil and Gas Group.

b) If the funding for additional investment to increase the enterprise’s charter capital is derived from the enterprise arrangement and development fund, based on the Prime Minister’s decision, the Ministry of Finance shall allocate such funding from the Enterprise Arrangement and Development Fund to the enterprise.

3. An enterprise is required to adjust its charter capital in the following cases:

a) The enterprise uses its development investment fund.

Based on the plan for additional investment to increase charter capital approved by a competent authority and audited annual financial statements, the enterprise shall carry out the carryforward of funding derived from its development investment fund to make an increase in the owner’s equity in the enterprise.

b) Based on the plan for additional investment to increase charter capital approved by a competent authority, when the enterprise is assigned other transferred assets invested by funding derived from the state budget, or government-contributed aids (those used for residential relocation, rearrangement or settlement of house, land and investment in technical infrastructural facilities of industrial zones) in order to implement projects for investment in construction, improvement and refurbishment of manufacturing and trading facilities, or carry out the asset revaluation under the policies approved by the Prime Minister, it shall record an increase in the owner’s equity in the enterprise according to the asset assignment decision issued by a competent authority, record of asset transfer, statements of government-contributed aids, or the value of assets upon revaluation approved by the representative body.

c) Every year, at the time of preparing the annual financial statements, based on the approved plan for additional investment to increase charter capital, the value of owner’s equity at the beginning of year on the enterprise’s financial statements and the actual value of the additional investment made to increase charter capital prescribed in Clause 2 and Clause 3 of this Article, the representative body shall request the Prime Minister to decide the new charter capital of the enterprise established under the Prime Minister’s decision or the representative body shall decide the new charter capital of the enterprise established under its decision or which it manages.

If the enterprise is assigned assets, government-contributed aids and carries out asset revaluation in the year but does not yet include such values in the approved plan for additional investment to increase charter capital, it shall request the representative body to decide the adjustment of its charter capital based on the abovementioned capital increase statements without following the provisions in Article 9 and Article 10 hereof.

If an enterprise has no demand for increasing of its charter capital or does not prepare a plan for determination of its charter capital and funding sources for additional investment to increase its charter capital as prescribed herein, and the owner's equity (including paid-in capital, development investment fund and capital investment funding) on the enterprise’s annual financial statements is greater than the approved charter capital in the previous year, the representative body shall review, decide and direct the enterprise to transfer the difference between the owner's equity and the charter capital to the state budget.

4. The enterprise shall carry out procedures for replacement of the charter capital specified in the enterprise registration certificate by the actual amount invested by the owner under the provisions of the Law on enterprises.”

8. Clause 1 Article 13 of Decree No. 91/2015/ND-CP is amended as follows:

“1. The representative of state capital invested in a joint-stock company or multi-member limited liability company (hereinafter referred to as “state capital representative”) shall prepare an application for additional state capital investment in a joint stock company or a multiple-member limited liability company and submit it to the representative body for verification and perfection before submitting it to the Prime Minister or his consideration and decision, or making decision within its competence, prior to the state capital representative’s voting in the GMS or Members’ meeting. An application includes:

a) The copies of the enterprise registration certificate and the capital increase plan of the enterprise.

b) The plan for additional state capital investment prescribed in Clause 1 Article 18 of the Law on management and use of state capital invested in manufacturing and business operations of enterprises.

c) The copy of the audited financial statement in the quarter or year closest to the date on which the plan for additional state capital investment in the enterprise is devised.

d) The proposal of funding sources for additional state capital investment which aims at maintaining the rate of state stakes in a joint-stock company or a multiple-member limited liability company, including funding derived from the state budget, enterprise arrangement and development fund, share dividends and distributed profits, development investment fund, capital gains and other funds (if any) in proportion to the state stakes in the enterprise.”

9. Article 14 of Decree No. 91/2015/ND-CP is amended as follows:

“Article 14. Making additional state capital investment in a joint stock company or a multiple-member limited liability company

1. Based on the amount and sources of funding for additional state capital investment in a joint stock company or a multiple-member limited liability company which have been approved by a competent authority (as per Article 13 hereof), the representative body shall request the finance agency in writing to make additional state capital investment in a joint stock company or a multiple-member limited liability company.

In case the additional state capital investment in a joint stock company or a multiple-member limited liability company is made with funding derived from the state budget, the representative body shall, at the request of the state capital representative, send a document to the same-level finance and planning agency for submission to competent authorities according to the delegated authority over the state budget and regulations of law on state budget included in the annual estimate of state budget expenditures (regarding state investment in enterprises).

2. Based on the capital contribution time limit notified by a joint stock company or a multiple-member limited liability company and the written request filed by the representative body, the same-level finance agency shall make additional state capital investment in a joint stock company or a multiple-member limited liability company by taking into account the amount of state capital investment approved by a competent authority as follows:

a) If the funding for additional state capital investment is derived from the state budget included in the estimate of state budget expenditures approved by a competent authority (according to the delegated authority over the state budget), the same-level finance agency shall allocate such funding from the state budget to the enterprise under procedures laid down in y the Law on State Budget.

b) If the funding for making additional state capital investment in a joint-stock company or multi-member limited liability company is derived from the enterprise arrangement and development fund, based on the Prime Minister’s decision, the Ministry of Finance shall allocate such funding from the enterprise arrangement and development fund to the enterprise.

3. If share dividends, distributed profits, development investment fund, capital gains and other funds (if any) in proportion to the state stakes are used for making additional state capital investment in a joint-stock company or multi-member limited liability company as approved by a competent authority, the enterprise shall record an increase in state capital after obtaining the resolution of the GMS or the Board of Members.”

10. The following contents are added to Clause 1 Article 18 of Decree No. 91/2015/ND-CP:

“If funding used for partial or complete acquisition of the enterprise is derived from state budget, based on the approved plan for state capital investment in partial or complete acquisition of an enterprise, the representative body shall send a document to the same-level finance and planning agency for submission to competent authorities according to the delegated authority over the state budget and regulations of law on state budget included in the annual estimate of state budget expenditures (regarding state investment in enterprises).”

11. Clause 2 Article 19 of Decree No. 91/2015/ND-CP, as amended in Paragraph c Point 2 Clause 6 Article 1 of Decree No. 32/2018/ND-CP, is amended as follows:

“c) A wholly state-owned enterprise shall make a decrease in its charter capital in accordance with regulations of the Law on enterprises and follow charter capital decrease procedures laid down in Article 10 hereof.

If the enterprise’s charter capital is decreased due to return of a part of contributed capital to the owner in accordance with regulations of the Law on enterprises, the enterprise shall transfer the returned amount of contributed capital to the state budget.”

12. Point b Clause 1 Article 21 of Decree No. 91/2015/ND-CP, as amended in Clause 7 Article 1 of Decree No. 32/2018/ND-CP, is amended as follows:

“b) Wholly state-owned enterprises are not allowed to use assets, capital or allocated or leased land use rights for making capital contribution or investment in real estate (except those whose main business lines include real estate trading as prescribed in the Law on real estate business), or contribute their capital to or buy shares of banks, insurance companies, securities companies, venture capital funds, securities investment funds, securities investment companies or securities investment fund management companies, except for special cases decided by the Prime Minister at the request of representative bodies.

State Capital and Investment Corporation shall make intercorporate investments in accordance with the Government’s Decree on functions, tasks and operating mechanism of State Capital and Investment Corporation without limitations on investment in real estate, banking, insurance, securities or investment funds."

13. Point c Clause 2 Article 27 of Decree No. 91/2015/ND-CP is amended as follows:

“c) Where the wholly state-owned enterprise’s plan for transfer or sale of fixed assets is not capable of recovering a full amount of invested capital, it must clearly state reasons for and report this incapability to the representative body prior to transfer or sale of such fixed assets to serve supervision purposes.”

14. Point b Clause 1 Article 28 of Decree No. 91/2015/ND-CP, as amended in Clause 11 Article 1 of Decree No. 32/2018/ND-CP, is amended as follows:

“b) Proceeds from the equitization shall be managed, recorded and settled in accordance with current regulations on equitization. Proceeds from the wholly state-owned enterprise’s intercorporate investments shall be recorded as its financial incomes, including:

- After-tax profits that remain after setting aside funds in subsidiaries and difference between the owner's equity and the charter capital of a subsidiary.

- Cash profits and dividends distributed from investments in a joint-stock company or multi-member limited liability company; receivables, as prescribed in accounting regulations in force, from investments made under business cooperation contracts without establishment of independent juridical persons (BCC contracts).”

15. Article 29 of Decree No. 91/2015/ND-CP, as amended in Clause 12 Article 1 of Decree No. 32/2018/ND-CP, is amended as follows:

a) Heading of Article 29 is amended as follows:

“Article 29. Rules and power to decide transfer of intercorporate investments of a wholly state-owned enterprise”

a) Paragraph a Point 1 is amended as follows:

“a) Transfer of intercorporate investments of a wholly state-owned enterprise shall be made based on the list of transferred investments approved by a competent authority; such transfer is made irrespective of the amount of investment and whether the invested enterprise gains profit or incurs loss; organization, document preparation, disclosure of information and reporting on transfer of investments shall comply with regulations herein.

Where the wholly state-owned enterprise transfers its investment in a joint-stock company whose charter includes restrictions on transfer of shares in accordance with regulations of the Law on enterprises or in which the wholly state-owned enterprise and shareholders have entered into a commitment on prioritized transfer of shares (in case a shareholder is allowed to transfer its/his/her shares to other existing shareholders of the company only), the wholly state-owned enterprise shall direct the state capital representative to give opinions about amendments to the charter of the joint-stock company at the GMS or cooperate with the state capital representative to reach an agreement with shareholders on amendments to the commitment to allow the wholly state-owned enterprise to freely transfer its stakes to other investors (including existing shareholders of the company).

If opinions given by the state capital representative at the GMS are refused or the wholly state-owned enterprise is unsuccessful in reaching an agreement on amendments to the commitment with existing shareholders, the transfer of investments by the wholly state-owned enterprise shall be carried out according to the joint-stock company’s charter and commitment made between shareholders. The transfer of investments from the wholly state-owned enterprise to existing shareholders under the company’s charter and commitment between shareholders shall comply with the rules and methods of capital transfer laid down herein.”

c) Paragraph b Point 1 is amended as follows:

“b) This transfer must adhere to the principle of market, public disclosure, transparency and conservation of intercorporate investments of the wholly state-owned enterprise at the highest level as well as maximum restriction on losses incurred from the transfer of investments.”

d) Paragraph c Point 1 is amended as follows:

“c) Determination of the starting price when transferring investment: The wholly state-owned enterprise shall select and sign contract with qualified valuation organization to determine the starting price in accordance with regulations of laws on pricing and valuation.  

The valuation organization may select appropriate valuation approaches in accordance with regulations of laws on pricing and valuation for determining the starting price, and assume legal responsibility for valuation result. When determining the starting price, the actual value of the intercorporate investments made by the wholly state-owned enterprise, including the value of the land use rights that are allocated with collecting land levies, transferred or leased land use rights (including those leased with annual payment or lump-sum payment of land rent for the entire lease duration) must be adequately determined in accordance with regulations of law. The brand value (including cultural and historical values) which is included in the starting price shall be determined according to the Ministry of Finance’s guidance.

A starting price may be used for transferring investments according to the methods prescribed herein within a maximum period of 06 months from the effective date of the valuation deed to the final trading day (if a transaction is made on the securities trading floor), or to the day on which the winning bid is announced (if a public auction or competitive offering is employed), or to the day on which the transfer contract is signed (if put-through method is employed).

In case of transfer of investment in an enterprise that is not listed or registered for trading on the Stock Exchange and less than 36% of charter capital of which is held by the wholly state-owned enterprise and the value of the investment to be transferred reported on accounting records of the wholly state-owned enterprise is less than VND 10 billion, the wholly state-owned enterprise shall decide to hire a qualified valuation organization or itself decide the starting price at the date of approval of the investment transfer plan which must ensure that the transfer value shall be lower than neither the actual value of the transferred investment reported on the financial statements closest to the transfer date of the invested enterprise nor the value of the investment reported on accounting records of the wholly state-owned enterprise after deducting any provisions set aside for losses. The actual value of the transferred investment shall be determined according to the value of the owner's equity specified on accounting records of the invested enterprise and holding by the wholly state-owned enterprise at the enterprise.

In case of transfer of investment in a joint-stock company that has been listed or registered for trading on the Stock Exchange, the starting price shall be determined according to the abovementioned regulations and the followings:

- The starting price decided and announced by the wholly state-owned enterprise at the date of the approval of the transfer plan shall not be lower than: (i) the price determined by the qualified valuation organization; (ii) the average reference price within 30 consecutive days before the date of approval of the transfer plan of traded securities code of the joint-stock company that has been listed or registered for trading on the Stock Exchange; (iii) the reference price of the securities code of the joint-stock company which is traded on the Stock Exchange 01 day before the date of the approval of the transfer plan.

- With regard to a joint-stock company that has been listed or registered for trading on the Stock Exchange, if the value of total shares to be transferred, which is calculated by the face value, is less than VND 10 billion, the wholly state-owned enterprise shall decide to hire a qualified valuation organization or itself decide the starting price at the date of approval of the transfer plan which shall not be lower than the average reference price in 30 consecutive days before the date of approval of the transfer plan of traded securities code of the joint-stock company that has been listed or registered for trading on the Stock Exchange and the reference price of the securities code of the joint-stock company which is traded on the Stock Exchange 01 day before the date of the approval of the transfer plan.”

dd) The following contents are added to Paragraph d Point 1:

“The value of the land use rights that are allocated with collecting land levies, land use rights that are lawfully transferred or leased with lump-sum payment of land rent for the entire lease duration shall be determined according to the land price determined by the consulting firm at the time of determination of the starting price in comparison to the land levies, transfer price and land rents paid by other enterprises.

The value of 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 of the land use rights leased with annual payment of land rents under lease contracts signed by other enterprises (in which the wholly state-owned enterprise makes investment) directly with competent authorities shall be included in the starting price.

- The value of land use rights leased with annual payment of land rents which is included in the starting price shall be determined according to the remaining lease period and difference (if any) between the land rent calculated according to the land price determined by the consulting firm at the time of determination of starting price and that calculated according to the land price paid by another enterprise.

The remaining lease period used as the basis for determining the value of the land use rights leased with annual payment of land rents, which is included in the starting price, shall be the remaining period of the 05-year stabilization cycle of land rent units as prescribed in the Law on land. If the enterprise does not yet sign a new land lease contract upon the end of the stabilization cycle of land rent units, the remaining lease period shall be 05 years.

- If the enterprise 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.”

e) Paragraph g Point 1 is amended as follows:

“g) Based on the list of transferred investments approved by a competent authority, the wholly state-owned enterprise shall formulate the investment transfer plan and submit it to a competent authority for its approval. The investment transfer plan shall, inter alia, include the following primary contents:

- Legal grounds and purposes of investment transfer.

- Assessment of investment of capital, gained benefits and impacts of transfer of the investment made by the wholly state-owned enterprise in another enterprise.

- Financial status and business income of the enterprise receiving investment from the wholly state-owned enterprise and market demands for investment in the invested enterprise. Expected proceeds from the investment. transfer

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

- Estimated time of implementation and completion of investment transfer.”

16. Clause 13 Article 1 of Decree No. 32/2018/ND-CP is amended as follows:

a) Heading of Article 29a is amended as follows:

“Article 29a. Methods of transfer of intercorporate investments of a wholly state-owned enterprise”

a) Paragraph a Point 1 is amended as follows:

- The second minus (-) bullet point is amended as follows:

“- The information disclosure form made according to form in Appendix II enclosed with the Government’s Decree No. 140/2020/ND-CP dated November 30, 2020;”

- The fourth minus (-) bullet point is added as follows:

“- The Stock Exchange shall disclose information about the transfer of shares at least 20 days before the transfer date.”

c) The following contents are added to Point 2:

“The transfer of lot of shares enclosed with receivables by a wholly state-owned enterprise that is authorized to buy, sell and settle debts shall be carried out according to investment transfer methods prescribed herein and the Ministry of Finance’s guidance.

Regulations on public auction (normal auction/ lot auction/ auction of lot of shares enclosed with receivables) and competitive offering (normal offering/ lot offering/ offering of lot of shares enclosed with receivables) serving the investment transfer shall comply with the Ministry of Finance’s guidance.”

d) Point 3 is amended as follows:

- The second minus (-) bullet point of Paragraph b is amended as follows:

“- The wholly state-owned enterprise shall enter into a contract to hire the auction service center or auction enterprise as prescribed by the Law on property auction or the Stock Exchange, or securities company (hereinafter referred to as “auction organization”) to organize the transfer of investment. An auction shall be conducted at the premises of the auction organization, or the wholly state-owned enterprise that transfers investment or another location as agreed upon between the wholly state-owned enterprise and the auction organization.”

- The third minus (-) bullet point of Paragraph c is amended as follows:

“- Immediately after the end of the auction, based on the auction result, the auction organization shall make a record of auction result which must comply with the form in Appendix III enclosed with the Government's Decree No. 140/2020/ND-CP dated November 30, 2020 and bear the signatures of the wholly state-owned enterprise and representatives of the auction council (if any).”

- Paragraph d is amended as follows:

+ The fifth plus (+) bullet point of the first minus (-) bullet point is amended as follows:

“+ Other cases, subject to the Prime Minister’s decision issued at the request of representative bodies.”

+ The second minus (-) bullet point is amended as follows:

“- Document preparation and submission, implementation, transfer of ownership of shares and reporting on capital transfer in case of lot auction shall be carried out in the same manner as a public auction prescribed in Point a, Point b and Point c Clause 3 of this Article, and according to the following regulations:

+ Auction result shall be determined as follows:

A valid bid shall not be lower than the starting price according to the auction regulations. The winning bid is the highest valid bid.

If there are two or more bidders submitting the highest bid which is not lower than the starting price, within 05 working days from the date of organization of the lot auction, the wholly state-owned enterprise shall cooperate with the auction organization to hold a ballot among these bidders to select the one that submits the only highest bid.  The bids submitted at the ballot shall not be lower than the highest bid submitted by these bidders according to the bid increments specified in the auction regulations. The bidder that submits the highest bid at the ballot shall be the winning bidder and is entitled to purchase the entire lot of shares. If these bidders continue to submit the same bid at the ballot, the winning bidder shall be determined by random drawing.

If the bidders submitting the highest bid refuse to hold a ballot or the winning 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 transferred investments approved by a competent authority, the value of investment to be transfer and market developments at the time of formulation of the transfer plan, the wholly state-owned enterprise shall decide to sell total shares or divide them into lots to be put up for auction.”

dd) The third, fourth and fifth minus (-) bullet pointes of Point 4 are amended as follows:

“- An investor participating in a competitive offering session shall have the right to divide total shares registered into portions of shares for which different bids are submitted, except the competitive offering of shares in lots.

- A bid submitted for each portion of shares divided from total shares registered by the investor must not be lower than the starting price, except the competitive offering of shares in lots.

- Implementation, determination of results, payment for shares, preparation and submission of documents for transfer of share ownership, and reporting on transfer of investment by competitive offering shall comply the same regulations on public auction in Point b, Point c and Point d Clause 3 of this Article.”

e) Point 6 is amended as follows:

“6. If the investment to be transferred by the wholly state-owned enterprise is not sold up after the completion of public auction, competitive offering or put-through method, the wholly state-owned enterprise shall, based on the market demands and its development capacity, decide the proper time to continue the investment transfer and re-determine the announced starting price according to procedures of investment transfer methods prescribed herein.

If the valuation deed expires when the wholly state-owned enterprise is carrying out the investment transfer, it shall not be required to formulate a new transfer plan but must re-determine the starting price for continuing the investment transfer according to the adopted transfer method (if the public auction is unsuccessful or the investment to be transferred is not sold up after the auction, the wholly state-owned enterprise shall hold a competitive offering according to the re-determined starting price).

Upon completion of the public auction, competitive offering and put-through method, if the investment to be transferred by State Capital and Investment Corporation is not sold up, the mechanism for transfer of state investment laid down in the Government’s Decree prescribing functions, tasks and operating mechanism of State Capital and Investment Corporation shall apply.”

g) Point 9 is amended as follows:

“9. Rules for financial settlement upon transfer of intercorporate investments, or rights to purchase shares and contribute capital of a wholly state-owned enterprise:

Proceeds from investment transfer, transfer costs and tax liabilities (if any) shall be recorded in accordance with regulations on corporate accounting in force. The wholly state-owned enterprise shall use its provisions set aside in accordance with regulations to offset the negative difference between the proceeds from investment transfer and sum of transfer costs, the value of investment reported on accounting records and tax liabilities (if any).

The difference between the proceeds from transfer of rights to purchase shares and contribute capital and sum of reasonable transfer costs and tax liabilities (if any) shall be recorded as income from financial activities, if it is positive, or expenses for financial activities, if it is negative, of the wholly state-owned enterprise.”

h) The following contents are added to Point 10:

“The power to decide the transfer of bonds invested by the wholly state-owned enterprise to earn profits shall be determined according to regulations on the power to decide intercorporate investments in Clause 4 Article 28 of the Law on management and use of state capital invested in manufacturing and business operations of enterprises.”

i) The following contents are added to Point 11:

“Based on specific contents of a BCC contract, if the wholly state-owned enterprise is allowed to transfer its investment, the competent authority shall decide to transfer investment according to the following method:

If only parties to the BCC contract are allowed to receive the transferred investment, the method for transfer of investment made by the wholly state-owned enterprise in a multi-member limited liability company prescribed in Article 29a hereof shall apply.

If there is no regulation that the investment must be transferred to parties to the BCC contract, the method for transfer of investment made by the wholly state-owned enterprise in an unlisted joint-stock company prescribed in Article 29a hereof shall apply.”

k) The following contents are added to Point 12:

“12. State Capital and Investment Corporation may be entrusted by domestic and foreign entities to transfer investments in enterprises in which it also makes investment according to the commitment to transfer investments to ensure public disclosure and transparency. The transfer of investments in this case shall be carried out according to regulations herein and the mechanism for transfer of investment of State Capital and Investment Corporation, and must comply with regulations of the laws on enterprises, securities and public offering.”

17. Clause 3 Article 37 of Decree No. 91/2015/ND-CP, as amended in Clause 14 Article 1 of Decree No. 32/2018/ND-CP, is amended as follows:

“3. Rights, responsibilities, wage, remuneration, bonus and other benefits of a state capital representative shall comply with regulations in Article 48 and Article 50 of the Law on management and use of state capital invested in manufacturing and business operations of enterprises, and the followings:

a) The state capital representative at an enterprise in which the State has shares or stakes shall be required to ask for the representative body’s opinions about the plan for annual distribution of after-tax profits of that enterprise in order to give opinions, vote for and make decision at that enterprise’s GMS or meeting of Board of Members. Before directing the state capital representative to give opinions, vote for and make decision at the GMS or meeting of the Board of Members, the representative body shall send a written request to the same-level finance agency for its opinions (if at least 36% of the charter capital of the enterprise is held by the State). Within 10 working days from the receipt of the written request from the representative body (enclosed with the enterprise’s charter on organization and operation, audited annual financial statements and plan for annual distribution of dividends/after-tax profits), the same-level finance agency shall give its opinions to the representative body that shall then direct the state capital representative to give opinions, vote for and make decision at the GMS or meeting of the Board of Members. The plan for annual distribution of after-tax profits of an enterprise in which the State has shares or stakes (except credit institutions that are state-invested commercial joint-stock banks) must comply with the following rules:

- The plan for annual distribution of dividends/after-tax profits of an enterprise over 50% of charter capital, or total voting shares, of which is held by the State must ensure the distribution of dividends/after-tax profits according to the following order:

+ Distribute profits to associated capital contributing parties according to the signed economic contract (if any);

+ Offset losses incurred in the previous year which can be no longer deducted from before-tax profits as prescribed.

+ Make a maximum contribution of 30% of profits to the enterprise’s development investment fund (if prescribed in the enterprise’s charter on organization and operation).

+ Make contributions to the reward and welfare fund for the enterprise’s employees, and reward fund for the enterprise’s managers as prescribed by the Government’s regulations on labor, wage, remuneration and bonus applicable to enterprises of which controlling shares/stakes are held by the State.

+ The remaining profits shall be distributed in cash to shareholders or capital-contributing members. Dividends or profits distributed in cash in proportion to the state capital invested in the enterprise shall be paid to the state budget as prescribed.

- With regard to an enterprise from 36% to 50% of charter capital of which is held by the State, after obtaining opinions from the same-level finance agency, the representative body shall direct the state capital representative in that enterprise to give opinions, vote for and make decision at the GMS or meeting of the Board of Members on the plan for annual distribution of after-tax profits according to the same distribution order as that for an enterprise at least 50% of charter capital of which is held by the State.

- With regard to an enterprise less than 36% of charter capital of which is held by the State, based on its annual business plan, the representative body shall direct the state capital representative in that enterprise to give opinions, vote for and make decision at the GMS or meeting of the Board of Members on the plan for annual distribution of after-tax profits, in which the profits that remain after setting aside funds according to the enterprise’s charter and regulations on financial management shall be distributed in cash to all shareholders/capital-contributing members. Dividends or profits distributed in cash in proportion to the state capital invested in this enterprise shall be paid to the state budget as prescribed.

b) The distribution of profits after paying corporate income tax of a credit institution that is a State-invested commercial joint-stock bank shall be carried out according to the Government’s Decree No. 93/2017/ND-CP dated August 07, 2017 on financial regulations applicable to credit institutions, branches of foreign banks and financial supervision, assessment of effectiveness of state capital investment in wholly state-owned credit institutions and partially state-owned credit institutions, and its amending and superseding documents.

c) Within 15 days from the end of each quarter and within 30 days from the end of each year, and on ad hoc basis at the request of the representative body and the same-level finance agency, the state capital representative shall submit reports on business and financial status, and proposed solutions for the enterprise in which he/she is appointed to act as state capital representative. Reports submitted by the state capital representative to the representative body and the same-level finance agency shall be prepared according to the form in Appendix III enclosed herewith.”

18. Article 38 of Decree No. 91/2015/ND-CP, as amended in Clause 15 Article 1 of Decree No. 32/2018/ND-CP, is amended as follows:

a) Paragraph a Point 1 is amended as follows:

“a) The transfer of state investment shall be made according to the list of partially state-owned enterprises performing transfer approved by a competent authority according to the criteria for classification of state-owned enterprises and partially state-owned enterprises and the list of state-owned enterprises subject to re-arrangement in each period announced by the Prime Minister; such transfer is made irrespective of the amount of investment and whether the State-invested enterprise gains profit or incurs loss; organization of investment transfer, document preparation, disclosure of information, reporting on transfer of investments, procedures for transfer of ownership of shares, and submission of documents and reports on investment transfer results to competent authorities shall comply with regulations herein.

Where the representative body transfers state investment in a joint-stock company whose charter includes restrictions on transfer of shares in accordance with regulations of the Law on enterprises or in which the representative body and shareholders have entered into a commitment on prioritized transfer of shares (in case a shareholder is allowed to transfer its/his/her shares to other existing shareholders of the company only), the representative body shall direct the state capital representative in that company to give opinions about amendments to the charter of the joint-stock company at the GMS or cooperate with the state capital representative to reach an agreement with shareholders on amendments to the commitment to allow the state shareholder to freely transfer its stakes to other investors (including existing shareholders of the company).

If opinions given by the state capital representative at the GMS are refused or the representative body is unsuccessful in reaching an agreement on amendments to the commitment with existing shareholders, the transfer of state investments shall be carried out according to the joint-stock company’s charter and commitment made between shareholders. The transfer of state investments to existing shareholders under the company’s charter and commitment between shareholders shall comply with the rules and methods for investment transfer laid down herein.

When a wholly state-owned enterprise is converted into a multi-member limited liability company by transferring a part of state capital, the transfer of state capital shall comply with procedures for state capital methods prescribed herein.”

b) Paragraph b Point 1 is amended as follows:

“b) This transfer must adhere to the principle of market, public disclosure, transparency and conservation of state investments at the highest level as well as maximum restriction on losses incurred from the transfer of investments.”

c) Paragraph c Point 1 is amended as follows:

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

The representative body or its affiliated entity or the state capital representative authorized in writing by the representative body shall enter into a contract to hire a qualified valuation organization to determine the starting price in accordance with regulations of laws on pricing and valuation.

The valuation organization may select appropriate valuation approaches in accordance with regulations of laws on pricing and valuation for determining the starting price, and assume legal responsibility for valuation result. When determining the starting price, the actual value of the state investment, including the value of the land use rights that are allocated with collecting land levies, transferred or leased land use rights (including those leased with annual payment or lump-sum payment of land rents for the entire lease duration) must be adequately determined in accordance with regulations of law. The brand value (including cultural and historical values) which is included in the starting price shall be determined according to the Ministry of Finance’s guidance.

A starting price may be used for transferring investments according to the methods prescribed herein within a maximum period of 06 months from the effective date of the valuation deed to the final trading day (if a transaction is made on the securities trading floor), or to the day on which the winning bid is announced (if a public auction or competitive offering is employed), or to the day on which the transfer contract is signed (if put-through method is employed).

In case of transfer of investment in an enterprise that is not listed or registered for trading on the Stock Exchange and less than 36% of charter capital of which is held by the State and the value of the state investment included in the charter capital to be transferred is less than VND 10 billion, the representative body shall decide to hire a qualified valuation organization or itself decide the starting price at the date of approval of the investment transfer plan which must ensure that the transfer value shall not be lower than the actual value of the transferred investment reported on the financial statements closest to the transfer date of the State-invested enterprise. The actual value of the transferred investment shall be determined according to the value of the owner's equity specified on accounting records of the invested enterprise and the State holding at the enterprise.

In case of transfer of investment in a joint-stock company that has been listed or registered for trading on the Stock Exchange, the starting price shall be determined according to the abovementioned regulations and the followings:

- The starting price decided and announced by the representative body at the date of the approval of the transfer plan shall not be lower than: (i) the price determined by the qualified valuation organization; (ii) the average reference price within 30 consecutive days before the date of approval of the transfer plan of traded securities code of the joint-stock company that has been listed or registered for trading on the Stock Exchange; (iii) the reference price of the securities code of the joint-stock company which is traded on the Stock Exchange 01 day before the date of the approval of the transfer plan.

- With regard to a joint-stock company that has been listed or registered for trading on the Stock Exchange, if the value of total shares to be transferred, which is calculated by the face value, is less than VND 10 billion, the representative body shall decide to hire a qualified valuation organization or itself decide the starting price at the date of approval of the transfer plan which shall not be lower than the average reference price in 30 consecutive days before the date of approval of the transfer plan of a traded securities code of the joint-stock company that has been listed or registered for trading on the Stock Exchange and the reference price of the securities code of the joint-stock company which is traded on the Stock Exchange 01 day before the date of the approval of the transfer plan.”

d) The following contents are added to Paragraph d Point 1:

“The value of the land use rights that are allocated with collecting land levies, land use rights that are lawfully transferred or leased with lump-sum payment of land rent for the entire lease duration shall be determined according to the land price determined by the consulting firm at the time of determination of the starting price in comparison to the land levies, transfer price and land rents paid by a State-invested enterprise.

The value of 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 of the land use rights leased with annual payment of land rents under lease contracts signed by State-invested enterprises directly with competent authorities shall be included in the starting price.

- The value of land use rights leased with annual payment of land rents which is included in the starting price shall be determined according to the remaining lease period and difference (if any) between the land rent calculated according to the land price determined by the consulting firm at the time of determination of starting price and that calculated according to the land price paid by the State-invested enterprise.

The remaining lease period used as the basis for determining the value of the land use rights leased with annual payment of land rents, which is included in the starting price, shall be the remaining period of the 05-year stabilization cycle of land rent units as prescribed in the Law on land. If the enterprise does not yet sign a new land lease contract upon the end of the stabilization cycle of land rent units, the remaining lease period shall be 05 years.

- If the enterprise 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.”

dd) Paragraph dd Point 1 is amended as follows:

“dd) The representative body or its affiliated entity or the state capital representative authorized in writing by the representative body shall hire a qualified auction organization and other consulting firms providing investment transfer-related services to organize the transfer of state investments in joint-stock companies and multi-member limited liability companies.”

19. Clause 16 Article 1 of Decree No. 32/2018/ND-CP is amended as follows:

a) Paragraph a Point 1 is amended as follows:

- The second minus (-) bullet point is amended as follows:

“- The information disclosure form made according to form in Appendix II enclosed with the Government’s Decree No. 140/2020/ND-CP dated November 30, 2020;”

- The fourth minus (-) bullet point is added as follows:

“- The Stock Exchange shall disclose information about the transfer of shares at least 20 days before the investment transfer date.”

b) The following contents are added to Point 2:

“Regulations on public auction (normal auction/ lot auction) and competitive offering (normal offering/ lot offering) serving the investment transfer shall comply with the Ministry of Finance’s guidance.”

c) The second minus (-) bullet point of Paragraph b Point 3 is amended as follows:

“- The representative body or its affiliated entity or the state capital representative authorized in writing by the representative body shall enter into a contract to hire the auction service center or auction enterprise as prescribed by the Law on property auction or the Stock Exchange or securities company (hereinafter referred to as “auction organization”) to organize the transfer of investment. The auction shall be held at the premises of the auction organization, the representative body or the state-invested enterprise that transfers investment or another location as agreed upon between the representative body and the auction organization.”

d) Point 6 is amended as follows:

“6. If the state investment to be transferred is not sold up after the completion of public auction, competitive offering or put-through method, the representative body shall, based on the market demands and the enterprise’s development capacity, decide the proper time to continue the investment transfer and re-determination of the announced starting price according to procedures of investment transfer methods prescribed herein.

If the valuation deed expires when the representative body is carrying out the investment transfer, it shall not be required to formulate a new transfer plan but must re-determine the starting price for continuing the investment transfer according to the adopted transfer method (if the public auction is unsuccessful or the investment to be transferred is not sold up after the auction, a competitive offering shall be held according to the re-determined starting price).”

dd) Point 10 on costs of transfer of state investment are added as follows:

“10. Representative body shall, based on the roadmap or plan for disinvestment of state capital from enterprises approved by a competent authority, direct functional departments to prepare the estimate of state investment transfer costs (including transfer of rights to purchase shares or contribute capital). The representative body shall approve the estimate and statements of investment transfer costs, and decide specific levels of expenditures which must be proved by valid and reasonable documents as prescribed by law, and assume legal responsibility for its decision. State investment transfer costs include costs of hiring of valuation consultants, costs of organization of auction, costs of performance of legal procedures for transfer, any taxes, fees and charges payable to the state budget and other related costs (excluding remunerations paid to members of the representative body, state capital representative and members of the enterprise).

Pursuant to the decision on approval for the estimate of investment transfer costs, the representative body shall request the Ministry of Finance in writing to make advance funding derived from the Enterprise Arrangement and Development Fund (hereinafter referred to as the “Fund”). The Ministry of Finance shall issue a decision to use the Fund to make an advance payment of not exceeding 70% of total estimated investment transfer costs to the representative body. Based on the investment transfer results, the representative body shall make statements of proceeds from and costs of the investment transfer. If the sum of the proceeds from the investment transfer and the advance payment of investment transfer costs is higher than reasonable costs of the investment transfer, such difference shall be declared and paid to the Fund. If the sum of the proceeds from the investment transfer and the advance payment of investment transfer costs is lower than reasonable costs of the investment transfer, the representative body shall request the Ministry of Finance in writing to allocate additional funding derived from the Fund to make up such difference. The Ministry of Finance shall make a decision to allocate additional funding from the Fund to the representative body.

The representative body shall submit a report on investment transfer results and statements (of proceeds from and actual costs of the investment transfer, advance payments and payment paid to or additionally allocated with funding from the Fund) and relevant documents to the Fund for return of advance payment and accounting.

If the state investment transfer that is made before the effective date of the Government’s Decree No. 140/2020/ND-CP dated November 30, 2020 is unsuccessful or the proceeds from such transfer are not enough for covering costs or the representative body has authorized an individual in writing to select and sign contracts with qualified valuation organization, auction organization and other consulting firms providing investment transfer-related services to organize the investment transfer but the proceeds from such transfer are not enough for covering costs, the representative body shall approve the investment transfer results, statements of proceeds and actual costs of the investment transfer, and send a written request, enclosed with relevant documents, to the Ministry of Finance for allocating additional funding from the Fund to the representative body.

If an investment transfer is in progress but must be terminated/suspended under the Prime Minister’s decision, the representative body shall consider approving statements of actual costs of the investment transfer, and send a written request, enclosed with relevant documents, to the Ministry of Finance for allocating funding from the Fund to the representative body for covering such costs.”

20. Clause 17 Article 1 of Decree No. 32/2018/ND-CP is amended as follows:

“Article 38b. Transfer of rights to purchase/contribute capital

1. Where the capital owner has made investment in an enterprise that does not operate in business sectors/industries needing additional investments and thus has to transfer the investment according to the criteria for classification of state-owned enterprises, state-invested enterprises, and list of state-owned enterprises subject to re-arrangement in each period announced by the Prime Minister, the owner shall direct the state capital representative/representative of the enterprise’s capital to formulate the investment transfer plan according to regulations herein, and give opinions at the GMS (if it is a joint-stock company) or meeting of the Board of Members (if it is a multi-member limited liability company) to not ratify the issuance of additional shares to increase the charter capital or members-contributed capital resulting in reduction of the owner’s holding at that enterprise.

If the opinions given by the state capital representative/representative of the enterprise’s capital are refused by the GMS or the Board of Members, the capital owner shall consider transferring its share purchase rights (at the joint-stock company) or rights to contribute capital (at the multi-member limited liability company) to other entities according to Clause 2 of this Article.

2. Where the capital owner has made investment in an enterprise that does not operate in business sectors/industries needing additional investments and must not transfer the investment according to the criteria for classification of state-owned enterprises, state-invested enterprises, and list of state-owned enterprises subject to re-arrangement in each period announced by the Prime Minister, the capital owner shall direct the state capital representative/representative of the enterprise’s capital to formulate the plan for transfer of share purchase rights (at the joint-stock company) or rights to contribute capital (at the multi-member limited liability company) when the enterprise increases its charter capital.

The transfer of share purchase rights shall be carried out according to the public auction method. The starting price of a public auction of the share purchase rights shall be determined according to Point c Clause 1 Article 29 or Point c Clause 1 Article 38 hereof. In the event that the duration within which shareholders are allowed to exercise the share purchase rights according to the issuer’s issuance plan is too short to hold a public auction, the capital owner shall consider deciding the transfer price and method of transfer of share purchase rights under direct negotiation and ensure the compliance with mark-to-market rule and efficiency. Based on the issuance plan and scale of raised capital, the state capital representative/representative of the enterprise’s capital shall submit a report to the capital owner for deciding whether the public auction or direct negotiation is adopted to transfer share purchase rights. The selling price shall be agreed upon according to the price determined according to Point c Clause 1 Article 29 or Point c Clause 1 Article 38 hereof.

The transfer of rights to contribute capital shall be carried out by adopting the method of transfer of state investment/investment made by a wholly state-owned enterprise in a multi-member limited liability company prescribed herein.

A person delegated authority to decide to transfer the right to purchase shares or the right to contribute capital shall not be allowed to decide to transfer such rights to the transferred enterprise of which his/her spouse, father, foster father, mother, foster mother, natural son/daughter, son/daughter-in-law, adopted son/daughter, younger/elder brother, sister, or younger/elder son/daughter-in-law, is a manager and shall not be entitled to make their decision to transfer such rights to those stated above.

3. Where an enterprise is required to transfer capital according to the criteria for classification of state-owned enterprises and partially state-owned enterprises and the list of state-owned enterprises subject to re-arrangement in each period announced by the Prime Minister but it formulates a plan for increasing of charter capital or members-contributed capital for business development purposes and the investment plan, the state capital representative/representative of the enterprise’s capital shall develop specific plans for reporting the representative body. The representative body must take opinions from the Ministry of Finance before reporting the Prime Minister for consideration and decision.”

21. Clause 5 is added to Article 40 of Decree No. 91/2015/ND-CP as follows:

“5. By June 30, 2021, pursuant to the regulations on determination of charter capital and additional investment in operating wholly state-owned enterprises laid down herein, wholly state-owned enterprises shall develop plans for determination of charter capital and funding sources for additional investments which shall be submitted to representative bodies for reporting the Prime Minister for decision, and make additional investments and adjust charter capital as prescribed."

22. Clause 5a and Clause 5b are added to Article 42 of Decree No. 91/2015/ND-CP as follows:

“5a. Pursuant to regulations of Decree No. 91/2015/ND-CP, Decree No. 32/2018/ND-CP and this Decree, representative bodies shall direct state capital representatives in enterprises at least 50% of charter capital of which is held by the State to give opinions about amendments to charters of State-invested enterprises and other internal management regulations when managing and using capital and assets of enterprises and organizing disinvestment from other enterprises.

5b. Pursuant to regulations of Decree No. 91/2015/ND-CP, Decree No. 32/2018/ND-CP and this Decree, Boards of Members or Presidents of wholly state-owned enterprises shall direct representatives of their capital invested in enterprises at least 50% of charter capital of which is held by the wholly state-owned enterprise to give opinions about amendments to charters of enterprises invested by the wholly state-owned enterprise and other internal management regulations when managing and using capital and assets of enterprises and organizing disinvestment from other enterprises.”

23. Appendix II - Form of disclosure of information about the investment transfer enclosed herewith shall supersede Appendix I enclosed with Decree No. 32/2018/ND-CP; Appendix II - Form of record of auction result shall supersede Appendix II enclosed with Decree No. 32/2018/ND-CP.

Article 3. Abrogation of regulations of Decree No. 126/2017/ND-CP

The following regulations are abrogated:
1. Clause 4 Article 11.

2. The following contents of Article 12:

a) The content prescribed in Point b Clause 5: “Within 03 years prior to the date of submission of application for registration of provision of consulting services for determination of enterprise’s value, each year the organization must perform at least 30 service contracts in the said field”.

b) Point d Clause 5.

c) Point c Clause 6.

3. Clause 1 Article 13.

4. Clause 3 Article 17.

5. Point d Clause 2 Article 21.

6. Clause 6 Article 30.

7. The content prescribed in Point a Clause 2 Article 31: “With regard to certain specific enterprises, the consulting agencies shall determine the brand value for reporting representative bodies for deciding the brand value based on historical factors and traditional thickness (if any)”.

Article 4. Abrogation of Clause 5 Article 4 of Decree No. 91/2015/ND-CP

Article 5. Abrogation of Article 1 of Decree No. 32/2018/ND-CP

1. Paragraph b Point 2 Clause 5: "Management and maintenance of road and inland waterway systems”.

2. Paragraph c Point 1 Clause 13: “where the trading price of shares of a joint-stock company, which is calculated according to the floor price, is higher than the payment price which is determined according to each transfer method (including public auction, competitive offering and negotiation) on the date of opening of public auction, competitive offering or conclusion of investment transfer contract (with respect to the negotiation method), investors shall be obliged to pay state-owned enterprises for shares at the trading price which is the floor price defined on that day; where the trading price of shares of a joint-stock company, which is calculated according to the floor price, is lower than the payment price which is determined according to each transfer method (including public auction, competitive offering and negotiation) on the date of opening of public auction, competitive offering or conclusion of investment transfer contract (with respect to the negotiation method), or the floor price is not available due to no transaction made, investors shall pay state-owned enterprises for shares at the trading price which is determined according to each transfer method (including public auction, competitive offering and negotiation)”.

3. The fifth minus (-) bullet point of Paragraph b Point 3 Clause 13: “State-owned enterprise/auction organization shall, when disclosing information about the auction of shares for investment transfer, send auction documents that they have prepared in accordance with regulations in force to the  representative body and the Ministry of Finance (Department of Corporate Finance)”.

4. Paragraph c Point 1 Clause 16: “where the trading price of shares of a joint-stock company, which is calculated according to the floor price, is higher than the payment price which is determined according to each transfer method (including public auction, competitive offering and negotiation) on the date of opening of public auction, competitive offering or conclusion of investment transfer contract (with respect to the negotiation method), investors shall be obliged to pay representative bodies for shares at the trading price which is the floor price defined on that day; where the trading price of shares of a joint-stock company, which is calculated according to the floor price, is lower than the payment price which is determined according to each transfer method (including public auction, competitive offering and negotiation) on the date of opening of public auction, competitive offering or conclusion of investment transfer contract (with respect to the negotiation method), or the floor price is not available due to no transaction made, investors shall pay representative bodies for shares at the trading price which is determined according to each transfer method (including public auction, competitive offering and negotiation)”.

5. The fifth minus (-) bullet point of Paragraph b Point 3 Clause 16: “Representative body/auction organization shall, when disclosing information about the auction of shares for investment transfer, send auction documents that they have prepared in accordance with regulations in force to the Ministry of Finance (Department of Corporate Finance)”.

Article 6. Implementation

1. This Decree comes into force as from the date on which it is signed.

2. The phrase “doanh nghiệp nhà nước” (”state-owned enterprise”) is replaced by the phrase “doanh nghiệp do Nhà nước nắm giữ 100% vốn điều lệ” (wholly state-owned enterprise”) in Decree No. 126/2017/ND-CP, Decree No. 91/2015/ND-CP and Decree No. 32/2018/ND-CP.

3. Ministers, heads of ministerial agencies, heads of Governmental agencies, Chairpersons of Provincial People’s Committees, Boards of Members of parent companies of state economic corporations, state incorporations, wholly state-owned enterprises, state capital representatives shall report any difficulties that arise during the implementation of this Decree in writing to the Ministry of Finance for consolidation and reporting the Prime Minister and the Government for consideration.

4. Ministers, heads of ministerial agencies, heads of Governmental agencies, Chairpersons of provincial People’s Committees, Boards of Members of parent companies of state economic corporations, state incorporations, wholly state-owned enterprises, state capital representatives shall implement this Decree./.

APPENDIX I

PROCEDURES FOR CONVERSION OF A WHOLLY STATE-OWNED ENTERPRISE INTO A JOINT-STOCK COMPANY
(Enclosed with the Government’s Decree No. 140/2020/ND-CP dated November 30, 2020)

Procedures for conversion of a wholly state-owned enterprise into a joint-stock company include the following steps:

Step 1. Preparation of equitization plan

1. Establishing Steering Board and Assisting Team.

a) Based on the equitization plan on the list of state-owned enterprises subject to re-arrangement approved by the Prime Minister, the representative body issues an equitization decision and decision to establish the Steering Board, enclosed with the plan/roadmap for equitization.

b) Head of the Steering Board shall select and issue a decision to establish the Assisting Team within 05 working days from the date of issuance of the decision to establish the Steering Board.

c) After the representative body issues an equitization decision, the Steering Board and the Assisting Board 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.

2. Preparing documents.

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

- Legal documents on establishment of the enterprise.

- Legal documents on assets, funding sources and debts of the enterprise.

- Financial statements and tax declarations by the time of determination of the enterprise's value.

- Estimate of equitization costs as prescribed.

- The land use plan upon equitization at the time of determination of the enterprise's value.

- List of and plan for use of existing employees.

- Selection of methods/forms of determination of the enterprise’s value, selection of time of determination of the enterprise's value in conformity with the enterprise’s conditions and guiding documents on the equitization.

3. The Steering Board shall direct the Assisting Team to cooperate with the enterprise in preparing relevant documents submitted to the representative body for issuing decision to approve the estimate of equitization costs and decision to select consulting firm as prescribed.

4. Listing and settling financial issues, and organizing determination of the enterprise's value.

The enterprise shall cooperate with the consulting firm to:

a) Inventory and classify assets and make financial statements, tax declarations, cooperate with relevant authorities to settle financial issues by the time of determination of the enterprise's value.

b) Formulate the land use plan upon equitization and request the representative body to send that plan and all relevant documents to the Provincial People's Committee for its opinions about the land use plan upon equitization and specific land price as the basis for determination of the enterprise's value.

c) Organize determination of the enterprise's value.

The Steering Board shall direct the Assisting Team to cooperate with the enterprise and the consulting firm to organize determination of the enterprise's value as prescribed. A consulting firm that provides valuation services may be hired to formulate the equitization plan, determine the enterprise’s value and organize the offering of shares.

5. Deciding and disclosing the enterprise’s value.

The Steering Board shall review the results of asset inventory and classification, and determination of the enterprise’s value, and report it to the representative body for deciding the disclosure of the enterprise’s value.

With regard to enterprises subject to the audit prescribed in Clause 1  Article 26 of the Government’s Decree No. 126/2017/ND-CP dated November 16, 2017, the Steering Board shall request the representative body deciding the enterprise’s value to send a document and application to the State Audit Office of Vietnam for auditing of results of valuation and settlement of financial issues before the official disclosure of the equitized enterprise’s value.

The decision to disclose the enterprise’s value must specify debts and assets which have been excluded when determining the enterprise’s value and shall be transferred to Vietnam Debt and Asset Trading Corporation according to Clause 2 Article 14, Clause 2 and Clause 3 Article 15 of the Government’s Decree No. 126/2017/ND-CP dated November 16, 2017 and Clause 9 Article 1 hereof.

6. Completing and submitting the equitization plan to competent authorities for approval.

a) Based on the decision to disclose the equitized enterprise’s value and actual status of the enterprise, the Steering Board shall direct the Assisting Team to cooperate with the enterprise and consulting firm to formulate the equitization plan. The equitization plan shall, inter alia, include the following contents:

- The actual status of the enterprise at the time of enterprise valuation.

- Enterprise valuation results and issues that need to be dealt with.

- Equitization form and the charter capital required to serve business operations of the joint-stock company.

- Structure of charter capital, starting price and method of issuance of shares as prescribed.

- The draft charter on organization and operation of the joint-stock company in accordance with the Law on enterprises and other legislative documents in force.

- The work arrangement plan approved by the representative body.

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

- The land use plan upon equitization which has been approved by a competent authority.

b) The Steering Board shall direct the Assisting Team and the enterprise to cooperate with the consulting firm to disclose the equitization plan and send it to each of the company’s departments for studying before holding an (extraordinary) employees’ meeting.

After the employees’ meeting, the Assisting Team and the enterprise shall cooperate with the consulting firm to complete the equitization plan for submission to the representative body for approval.

c) The Steering Board shall review the equitization plan and submit a report thereof to the representative body for approval of the equitization plan.

If the actual value of an enterprise is lower than its amounts payable prescribed in Clause 2 Article 4 of the Government’s Decree No. 126/2017/ND-CP dated November 16, 2017, as amended in Clause 2 Article 1 hereof, the representative body shall direct the Steering Board and the enterprise to cooperate with Vietnam Debt and Asset Trading Corporation and the enterprise’s creditors to formulate a feasible and efficient debt trading plan to serve the enterprise restructuring. Based on the efficiency and feasibility of the debt trading plan, the representative body shall decide to approve the debt trading plan for restructuring of the enterprise or to adopt another conversion form as prescribed by law.

Step 2. Implementation of the equitization plan

1. The Steering Board shall direct the enterprise to cooperate with intermediary consulting firms to organize the sale of shares according to the approved equitization plan and regulations herein.

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

3. Based on results of sale of shares to the entities defined in the equitization plan, the Steering Board shall direct the enterprise to transfer the proceeds from the equitization to the Fund as prescribed.

If shares are not yet sold up to the entities defined in the approved equitization plan, the Steering Board shall report it to the representative body for adjusting the scale and structure of shares of the equitized enterprise.

4. The Steering Board shall request the representative body to appoint the representative of state capital at the equitized state-invested enterprise to continue engaging in the joint-stock company and assume responsibility to exercise rights and perform obligations of the state capital representative in accordance with regulations of law.

Step 3. Completing the conversion of enterprise into a joint-stock company

1. Organizing the first GMS and carry out procedures for enterprise registration.

a) The Steering Board shall direct the Assisting Team, state capital representative (if any) and enterprise to hold the first GMS for ratifying the Charter on organization and operation, business plan and electing members of the Board of Directors, Control Board and executive board of the joint-stock company.

b) Based on the results of the first GMS, the Board of Directors of the joint-stock company shall carry out procedures for enterprise registration as prescribed.

2. Organizing statements and transfer between the enterprise and the joint-stock company.

a) Within 90 days from the date of issuance of the initial enterprise registration certificate, the Steering Board shall direct the Assisting Team and enterprise to prepare financial statements at the time the joint-stock company is issued with the initial business registration certificate, carry out tax declarations, auditing of financial statements, statements of equitization costs and submit reports to the representative body.

b) Based on the results of the re-determination of the value of the state capital at the time of enterprise registration given by the representative body, the Steering Board shall direct the Assisting Team and enterprise to organize the transfer between the enterprise and the joint-stock company.

c) Organize a ceremony to mark the opening of the joint stock company and make it publicly available through mass media as prescribed.

The authority issuing the equitization decision, Steering Board, Assisting Team and enterprise may perform multiple steps at the same time to speed up the equitization progress./.