What are the principles of using state capital at the enterprise?

What are the principles of using state capital at enterprises?

According to the provisions of Article 5 of the Law on Management and Use of State Capital Invested in Production and Business at Enterprises 2014, amended by Clause 1, Article 22 of the Law amending and supplementing a number of Articles of 37 Laws related to 2018 planning, the use of state capital at enterprises is carried out according to the following principles:

(1) Comply with legal regulations on investment, management, and use of state capital at enterprises.

(2) Consistent with strategies, socio-economic development plans, and national sector planning.

(3) Investing state capital to form and maintain enterprises at key stages and stages in a number of industries and fields in which other economic sectors do not participate or in which the State holds 100% of charter capital, maintaining the ratio of shares and contributed capital according to the provisions of Article 10 and Article 16 of this Law.

(4) The owner’s representative agency and state management agency do not directly intervene in the production and business activities of the enterprise, or the management and operation activities of the enterprise manager.

(5) Management of state capital invested in enterprises must be through the direct owner representative or representative of state capital; ensure that enterprises produce and do business according to market mechanisms, equality, cooperation and competition according to the law.

(6) The owner’s representative agency, direct owner’s representative, and state capital representative are responsible for managing and using state capital in the enterprise, ensuring efficiency, preserving and increasing the value of state capital invested in the enterprise; Prevent and combat fraud, waste, and loss of capital and assets of the State and businesses.

(7) Publicity and transparency in investment, management, and use of state capital at enterprises.

(8) In accordance with international treaties to which the Socialist Republic of Vietnam is a member.

What forms of state capital investment are there in enterprises?

According to the provisions of Article 6 of the Law on Management and Use of State Capital Invested in Production and Business at Enterprises 2014, state capital investment in enterprises is carried out in the following forms:

(1) State capital investment to establish enterprises in which 100% of the charter capital is held by the State.

(2) Investing in additional charter capital for enterprises in which 100% of the operating charter capital is held by the State.

(3) Invest additional state capital to continue to maintain the ratio of shares and capital contribution of the State in joint stock companies and limited liability companies with two or more members.

(4) Investing state capital to buy back part or all of an enterprise.

Who has the right to decide to invest state capital to establish an enterprise?

Who has the right to decide to invest state capital to establish an enterprise is specified in Article 11 of the Law on Management and Use of State Capital Invested in Production and Business at Enterprises 2014 as follows: following:

Authority to decide on state capital investment to establish enterprises

1. The Prime Minister decides to invest state capital to establish enterprises in the following cases:

a) Enterprises with production, business and business assets formed from the implementation of important national projects whose investment policies have been decided by the National Assembly;

b) Parent companies of state-owned economic groups and enterprises with the function of investing and trading state capital water.

2. The owner’s representative agency decides to invest state capital to establish an enterprise that does not fall into the cases specified in Clause 1 of this Article.

3. In case of state capital investment to establish an enterprise with criteria equivalent to an important national project, the Prime Minister decides on the investment after the National Assembly decides on the investment policy.

Thus, the person with the right to decide to invest state capital to establish an enterprise is the Prime Minister and the owner’s representative agency, specifically:

(1) The Prime Minister decides to invest state capital to establish enterprises in the following cases:

– Enterprises with production, business and business assets formed from the implementation of important national projects whose investment policies have been decided by the National Assembly;

– Parent companies of state-owned economic groups and enterprises with the function of investing and trading state capital.

(2) The owner’s representative agency decides to invest state capital to establish an enterprise that does not fall into the cases specified in (1) above.

Note: In case of state capital investment to establish an enterprise with criteria equivalent to an important national project, the Prime Minister decides on the investment after the National Assembly decides on the investment policy.