Level-1 State Enterprises under Vietnamese Law

The term “level-1, level-2 state enterprises” originates from Decree 49/2014/ND-CP — a repealed document. Under the current legal framework, there is no longer an official “level 1/level 2” classification; management and investment of state capital in enterprises is governed by the Law on Management and Investment of State Capital in Enterprises 68/2025/QH15 (effective from 01/8/2025, replacing Law 69/2014/QH13), through agencies representing state capital ownership (the Government, the Prime Minister, ministries, provincial People’s Committees, the State Capital Investment Corporation (SCIC), etc.).

1. What is a “level-1 state enterprise”? Is this term still valid?

The term “level-1 state enterprise” (an enterprise 100% state-owned in charter capital, established by decision of the Prime Minister or by delegation) and “level-2 state enterprise” (an enterprise 100% owned by a level-1 enterprise) originates from Decree 49/2014/ND-CP on supervision, inspection and auditing of state enterprises in compliance with law and owners’ decisions.

Important note: Decree 49/2014/ND-CP has been repealed. Under the current legal framework, there is no official classification of state enterprises into “level 1” and “level 2”. Readers should not continue applying this classification to determine competence or supervision regimes, but should consult the current provisions on management and investment of state capital in enterprises and the agency representing ownership competent for each specific enterprise.

2. Current legal framework on management and investment of state capital in enterprises

State capital investment in enterprises; management and use of state capital invested in production and business at enterprises; and supervision of the investment, management and use of state capital at enterprises are currently governed by the Law on Management and Investment of State Capital in Enterprises 68/2025/QH15 (adopted by the National Assembly on 14/6/2025, effective from 01/8/2025, replacing the Law on Management and Use of State Capital Invested in Production and Business at Enterprises 69/2014/QH13).

Law 68/2025/QH15 is built toward stronger decentralization and delegation tied to responsibility: management of state capital at enterprises in which the State holds over 50% to below 100% of charter capital is carried out through state capital representatives; the matters representatives must report and seek opinions on from the ownership-representing agency before voting are clearly defined. The rights and responsibilities of agencies representing state capital ownership at enterprises are delegated to entities such as: the Government, the Prime Minister, ministries, provincial People’s Committees, the State Capital Investment Corporation (SCIC) and other agencies and organizations assigned to exercise ownership representation — depending on each enterprise and the amount of state capital invested.

The Law on Enterprises 2020 also provides separately on management organization for enterprises 100% state-owned in charter capital (Members’ Council, company Chairman, controllers, etc.), under which the ownership-representing agency exercises owners’ rights as prescribed by law on management and investment of state capital in enterprises.

3. How is state capital at enterprises supervised now?

Under the current legal framework, supervision of the investment, management and use of state capital at enterprises is carried out mainly through:

• Supervision by the ownership-representing agency: through periodic reporting by the enterprise, state capital representatives and controllers; approval and opinions on important enterprise decisions by delegation;
• Inspection and examination: inspection and examination of compliance with laws on management and investment of state capital at enterprises by competent state agencies under inspection laws;
• Auditing: auditing of financial statements and operational audits of state-capital enterprises under auditing laws;
• Information disclosure and transparency: enterprises must publish and disclose information on their operations and finances as prescribed.

The Government has issued decrees detailing Law 68/2025/QH15, including Decree 365/2025/ND-CP on supervision, inspection, evaluation, ranking, reporting and information disclosure in the management and investment of state capital at enterprises; Decree 366/2025/ND-CP on management and investment of state capital at enterprises; and Decree 57/2026/ND-CP on restructuring state capital at enterprises. Those needing to determine the specific supervision mechanism for a state enterprise should cross-check these documents and consult a lawyer, as the documents in this field have been amended and replaced multiple times.

Notes on applying current legal provisions

This article belongs to the Enterprise Knowledge group and is presented for reference, helping readers understand the legal issue at an overview level before preparing dossiers or conducting transactions. Legal provisions may change depending on timing, locality, dossier type and specific circumstances. Where it is necessary to determine the exact legal basis applicable to your dossier, you should contact an ANT Legal lawyer at 0966.475.966 for review and advice before proceeding.

Common risks to note

• Applying the repealed “level 1/level 2” classification of Decree 49/2014 to determine competence or supervision regimes.
• Citing Law 69/2014/QH13 or provisions of expired documents in dossiers or correspondence to state agencies — Law 68/2025/QH15 replaced it from 01/8/2025.
• Misidentifying the ownership-representing agency competent for a specific enterprise.
• Misunderstanding the applicable conditions, procedures, time limits or competent authority.

How can ANT Legal help?

ANT Legal assists in reviewing specific situations, checking dossiers, identifying the applicable legal basis, advising on handling plans, and representing you in working with individuals, organizations or competent authorities when necessary. For quick advice, you may contact a lawyer at 0966.475.966.

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