Perfecting the institution of State capital investment in business and operation in enterprises

VCN – The basic contents of the draft Law amending the Law on management and utilization of state capital invested in the enterprise’s manufacturing and business activities (Law 69/2014/QH13) include investing State capital to the enterprise; re-structuring State capital in enterprises; State capital management at the enterprise; responsibility of the owner’s representative.
According to the draft Law, state capital, after being invested in an enterprise, is defined as the property and capital of the enterprise's legal entity. Photo: ST
According to the draft Law, state capital, after being invested in an enterprise, is defined as the property and capital of the enterprise's legal entity. Photo: ST

State capital invested in enterprises is property and capital of the legal entity of the enterprise

The Ministry of Finance said that the application to develop a Law amending Law on management and utilization of state capital invested in the enterprise’s manufacturing and business activities (law 69/2014/QH13) has been sent by the Ministry of Finance to the Ministry of Justice for carrying out procedures for supplementing the Law and Ordinance Development Program 2023 of the National Assembly.

According to the Ministry of Finance, the comprehensive amendment and promulgation of the new Law on management and utilization of state capital invested in the enterprise’s manufacturing and business activities aims to perfect the institution and stabilize the legal environment for state capital investment in production and business at enterprises; creating a sufficient and stable legal environment for the management and use of state capital and assets at state agencies and enterprises; ensuring respect and enhancing the autonomy and self-responsibility of enterprises along with strengthening the state's inspection and supervision in the management and use of capital and assets invested in production and business at enterprises; ensure that SOEs operate following the market mechanism in business lines and industries at the request of the State (the owner).

The amendment of Law 69 also fully grasps the content of principles such as clearly stipulating that state capital after being invested in an enterprise is identified as an asset/capital of a legal entity of enterprise; SOEs focus on key and essential areas, important areas and national defense and security, operate under the market mechanism, take economic efficiency as the main assessment criterion, and take self-responsibility and fair competition.

Moreover, the state is the owner of the investment capital, and does not interfere in the operation and management of production and business of enterprises; restructuring and renovating SOEs under the market mechanism is a regular and continuous process with appropriate methods, solutions and roadmaps; to have solutions for transparency in SOE operations in association with improving the effectiveness and efficiency of management, supervision, inspection and control over activities of SOEs; prevent the loss and waste of state capital and assets.

At the same time, improving the qualifications, management capacity and ethical qualities to strengthen the contingent of leaders and managing state-owned enterprises.

Do not manage enterprises by each asset

Regarding the goals and contents of the proposal to develop a Law amending the Law on management and utilization of state capital invested in the enterprise’s manufacturing and business activities, Mr. Pham Van Duc, Deputy Director of the Corporate Finance Department (Ministry of Finance), said that there were four groups of basic policy contents including state capital investment in enterprises; restructuring state capital in enterprises; management of state capital invested in enterprises; and rights and responsibilities of the owner's representative.

In particular, regarding the policy on investment of state capital in enterprises, it should clearly stipulate state capital after being invested in enterprises to fulfill the obligation to contribute state equity capital which is identified as an asset, capital of the legal entity of enterprise in accordance with the provisions of the Civil Code, ensuring the principle of equality and autonomy in the operation of the legal entity.

The State manages the enterprise by the legal entity in which it invests capital and does not manage the enterprise by each asset to which the owner contributes charter capital (which has transferred ownership to the enterprise).

The State is identified as a capital investor and does not directly intervene in the operation and management of production and business of the enterprise, but through the owner's representative agency, the owner's representative directly at the enterprise, capital representative to exercise the rights of capital investors (contributing capital) in the enterprise.

The owner's representative agency and the representative shall fully exercise the rights and obligations of the owner in accordance with the provisions of the Law on Enterprises for enterprises with state capital investment.

From the above provisions, this draft Law also clarifies the concept of the state capital and completes and supplements the concept of capital of enterprises, investment capital of owners (the state) in enterprises; specifying the scope of state capital investment in enterprises, the process of state capital investment in enterprises, the use of resources obtained from the restructuring state capital in enterprises, and the source of profits/dividends divided by the capital portion. State contributions in enterprises to invest capital in enterprises in accordance with the law on state budget.

Enterprises with state-invested capital (referred to as F1 enterprise for short) include SOEs (enterprises with 100% charter capital held by the State and enterprises in which the State holds more than 50% of charter capital or total voting shares) and enterprises with 50% or less of charter capital held by the State.

F1 enterprise fully implements the rights and obligations of the owner in accordance with the Law on Enterprises for enterprises with their own capital contribution (referred to as F2 enterprise). The State and the owner’s representative agency of F1 enterprise do not directly interfere in the operation of F2 enterprise.

For an F2 enterprise operating in the form of a one-member limited liability company with 100% charter capital owned by F1 enterprise, the State and the owner’s representative agency of the F1 enterprise have adjusted regulations to ensure the rights and interests such as regulations on corporate governance, distribution of after-tax profits, decentralization of authority to decide on investment.

By Hoài Anh/Thanh Thuy

Related News

State-owned commercial banking sector performs optimistic growth, but more capital in need

State-owned commercial banking sector performs optimistic growth, but more capital in need

VCN - According to the report sent to the National Assembly before the 8th Session of the Government on investment, management and use of state capital in enterprises nationwide in 2023, the business performance of the state-owned commercial banking sector achieved positive growth.
Efficiency is not commensurate with state capital resources invested in enterprises

Efficiency is not commensurate with state capital resources invested in enterprises

VCN - The effectiveness of state capital invested in enterprises still has some shortcomings and the effectiveness is not as expected, so amendments related to policy mechanisms, helping state enterprises to be more proactive will help ensure more effective state capital flows in enterprises.
Minister of Finance Ho Duc Phoc: conserving and developing every State capital at enterprise

Minister of Finance Ho Duc Phoc: conserving and developing every State capital at enterprise

VCN - In the afternoon on August 13th, Ministry of Finance, Finance – Budget Committee and Ministry of National Defence chaired a workshop on drafting Law on Management and Investment of State Capital at enterprise.
State capital management needs to take into account the specific nature of credit institutions

State capital management needs to take into account the specific nature of credit institutions

VCN - From the perspective of enterprises whose owner is the State Bank, opinions expect that the draft Law on Management and Investment of State Capital in Enterprises should be consistent with the provisions of the Law on Credit Institutions (amended) which takes effect from July 2024.

Latest News

Hanoi Customs resolves tax policy queries for enterprises

Hanoi Customs resolves tax policy queries for enterprises

VCN - Queries regarding customs consultation procedures and tax refunds due to price reduction clauses were addressed by the Hanoi Customs Department, providing clarity for businesses.
Regularly check tax obligations to avoid temporary exit suspension

Regularly check tax obligations to avoid temporary exit suspension

VCN - In order to avoid the situation of arriving at the airport or border gate and only finding out that you owe taxes and being temporarily suspended from leaving the country by the Tax Authority, the Tax Authority recommends that taxpayers regularly look up their tax obligations to have a plan to pay taxes on time, not letting the tax debt situation drag on and drag on.
Implementing the SAFE framework in Vietnam: Assessment through the lens of international standards

Implementing the SAFE framework in Vietnam: Assessment through the lens of international standards

VCN - In June 2005, the World Customs Organization (WCO) developed and adopted the SAFE Framework of Standards to Secure and Facilitate Global Trade. The SAFE Framework plays a crucial role in encouraging countries to modernize, enhance security, and facilitate trade within global supply chain management and Authorized Economic Operator (AEO) programs. This approach introduces a comprehensive method for cross-border goods management and promotes closer cooperation between Customs, businesses, and stakeholders. The Customs News presents a two-part series on implementing the SAFE Framework in Vietnam.
Proposing the Tax Authority be flexible in applying tax debt enforcement measures simultaneously

Proposing the Tax Authority be flexible in applying tax debt enforcement measures simultaneously

VCN - In the draft revised Law on Tax Administration, the Ministry of Finance proposed amending regulations on measures to enforce administrative decisions on tax administration to remove obstacles in policy mechanism and improve the effectiveness of tax administration.

More News

Many shortcomings in process and manual book on handling administrative violations

Many shortcomings in process and manual book on handling administrative violations

VCN - Legal policies on handling administrative violations have effectively supported the technical work of the Customs sector. However, some legal bases and regulations have been amended, replaced, and supplemented, which have limited the efficiency of handling administrative violations of the customs sector.
Implementing the SAFE Framework in Vietnam: Lessons from practice

Implementing the SAFE Framework in Vietnam: Lessons from practice

VCN - The Framework of Standards to Secure and Facilitate Global Trade (SAFE Framework) is a strategic international instrument introduced by the World Customs Organization (WCO) to enhance security and trade facilitation in global supply chains. It contributes significantly to the economic development of the 21st century.
Implementing the SAFE Framework in Vietnam: Solutions and Recommendations

Implementing the SAFE Framework in Vietnam: Solutions and Recommendations

VCN - Recognizing the significance, impact, and benefits of the SAFE Framework in customs modernization and reform, Vietnam Customs is advancing the implementation of SAFE. This involves both capacity building and phased deployment aligned with Vietnam Customs’ development strategy and practical needs.
Abolishing regulations on tax exemption for small-value imported goods must comply with international practices

Abolishing regulations on tax exemption for small-value imported goods must comply with international practices

VCN - The Ministry of Finance said that the abolition of regulations on tax exemption for imported goods valued at less than VND1 million must comply with international practices in the context of the growing trend of cross-border e-commerce activities.
Policy adaptation and acceleration of digital transformation in tax and customs management

Policy adaptation and acceleration of digital transformation in tax and customs management

VCN - In order to contribute to economic growth, tax, customs and logistics management policies need to ensure high adaptability, stability and predictability so that they require little amendment or supplementation.
Implement regulations on special preferential import tariffs under VIFTA

Implement regulations on special preferential import tariffs under VIFTA

VCN - The General Department of Vietnam Customs (GDVC) requests provincial and municipal customs departments to implement Vietnam's special preferential import tariffs under the Free Trade Agreement between the Government of the Socialist Republic of Vietnam and the Government of the State of Israel for the period 2024-2027 (referred to as the VIFTA) from October 15, 2024.
Perfecting tax policy for goods traded via e-commerce

Perfecting tax policy for goods traded via e-commerce

VCN - In order to ensure the goal of developing e-commerce activities without causing loss of state budget revenue, the Customs authority is actively coordinating with policy advisory units of the Ministry of Finance to research and review regulations on tax exemption for import and export goods transacted via e-commerce.
Are belongings of foreigners on business trip to Vietnam exempt from tax?

Are belongings of foreigners on business trip to Vietnam exempt from tax?

VCN - That is the question of Nhat Viet Relocation Company Limited, which has just been answered by the Customs Department and given specific instructions on providing a confirmation of residence of foreigners on business trip to Vietnam to follow tax exemption procedures for movable assets.
Amending regulations on enforcement measures in tax administration

Amending regulations on enforcement measures in tax administration

VCN - In draft of 1 law amending 7 laws in the financial sector, the Ministry of Finance proposed to amend the regulations on enforcement measures in tax administration in the Law on Tax Administration.
Read More

Your care

Latest Most read
Hanoi Customs resolves tax policy queries for enterprises

Hanoi Customs resolves tax policy queries for enterprises

Queries regarding customs consultation procedures and tax refunds due to price reduction clauses were addressed by the Hanoi Customs Department, providing clarity for businesses.
Regularly check tax obligations to avoid temporary exit suspension

Regularly check tax obligations to avoid temporary exit suspension

Tax Authority recommends that taxpayers regularly look up their tax obligations to have a plan to pay taxes on time, not letting the tax debt situation drag on and drag on.
Implementing the SAFE framework in Vietnam: Assessment through the lens of international standards

Implementing the SAFE framework in Vietnam: Assessment through the lens of international standards

The SAFE Framework plays a crucial role in encouraging countries to modernize, enhance security, and facilitate trade within global supply chain management and Authorized Economic Operator (AEO) programs
Proposing the Tax Authority be flexible in applying tax debt enforcement measures simultaneously

Proposing the Tax Authority be flexible in applying tax debt enforcement measures simultaneously

VCN - In the draft revised Law on Tax Administration, the Ministry of Finance proposed amending regulations on measures to enforce administrative decisions on tax administration to remove obstacles in policy mechanism and improve the effectiveness of tax
Many shortcomings in process and manual book on handling administrative violations

Many shortcomings in process and manual book on handling administrative violations

VCN - Legal policies on handling administrative violations have effectively supported the technical work of the Customs sector. However, some legal bases and regulations have been amended, replaced, and supplemented, which have limited the efficiency of h
Mobile Version