Chương 1 Nghị định 38/2003/NĐ-CP: Quy định chung

Chapter I

GENERAL PROVISIONS

Article 1.- Scope of application

This Decree provides for the transformation of a number of foreign-invested enterprises operating under the Law on Foreign Investment in Vietnam into foreign-invested joint-stock companies.

Foreign-invested joint-stock companies shall operate under the provisions of this Decree and relevant legislation.

Article 2.- Objectives of transformation

The transformation of a number of foreign-invested enterprises to operate in the form of joint-stock company aims to:

1. Raise the operational efficiency of foreign-invested enterprises.

2. Mobilize capital of investors at home and abroad to invest in technological renovation, job creation and enterprise development.

3. Diversify investment forms, improve the investment environment and attract foreign investment capital.

4. Create more sources of commodities for Vietnam’s securities market.

Article 3.- Interpretation of terms

In this Decree, the following terms shall be interpreted as follows:

1. "Enterprise transformation" means the transformation of the management and organization of foreign-invested enterprises established and operating under the Law on Foreign Investment in Vietnam into foreign-invested joint-stock companies.

2. "Foreign-invested joint-stock companies" (hereinafter referred to as joint-stock companies for short) mean enterprises with their charter capital divided into many equal portions called "shares", with foreign founding shareholders holding at least 30% of their charter capital; organized and operating in the form of joint-stock company as provided for in this Decree, and enjoying the assurances of the Vietnamese Sate as well as the preferences prescribed by the Law on Foreign Investment in Vietnam.

3. "Foreign-invested enterprises" (hereinafter referred to as enterprises for short) mean joint-venture enterprises or enterprises with 100% foreign-owned capital, established under the Law on Foreign Investment in Vietnam.

4. "Charter capital" means the capital amount contributed by shareholders and inscribed in the charters of foreign-invested joint-stock companies.

5. "Voting capital" means the contributed capital amount with which its owner has the right to vote on matters decided by the shareholders’ general assembly.

6. "Foreign shareholders" mean foreign organizations and/or individuals holding shares in joint-stock companies.

7. "Vietnamese shareholders" mean Vietnamese organizations and/or individuals holding shares in joint-stock companies.

8. "Founding shareholders of joint-stock companies" mean investors making contributions to the legal capital of enterprises before their transformation, or organizations or individuals owning founding shareholders’ share certificates.

9. "Dividend" means the annual cash amount deducted from the profits of foreign-invested joint-stock companies to be paid to each share.

10. "Enterprise managers" mean Managing Board members, directors (general directors) and other important managerial posts as prescribed by the charters of joint-stock companies.

Article 4.- Forms of transformation

Enterprises shall be transformed in the following forms:

1. Keeping intact the enterprise’ value and investor(s).

2. Transferring part of the enterprise’s value to new shareholders.

3. Keeping intact the enterprise’s value or transferring part of its capital and issuing more shares to attract investment capital.

Article 5.- Buyers of shares

The buyers of joint-stock companies‘ shares include:

1. Vietnamese organizations and individuals.

2. Foreign-invested enterprises in Vietnam; foreign organizations and individuals.

3. Overseas Vietnamese, who shall be entitled to decide by themselves either to be foreign shareholders or Vietnamese shareholders but must make registration for buying shares and shall enjoy interests and fulfill corresponding obligations.

Article 6.- The State’s assurances for shareholders and foreign-invested joint-stock companies

Capital ownership and all legitimate rights and interests of shareholders and joint-stock companies shall be protected by the Vietnamese State under the law provisions.

Where the Vietnamese Government signs with foreign countries the international agreements on investment encouragement and protection, which contain provisions different from those of this Decree, the provisions of such international agreements shall apply.