On 4 November 2009, the Prime Minister issued Official Letter No. 2104/TTg-DMDN regarding re-arrangement and equitisation of State enterprises belonging to the Ministry of Industry and Trade for the 2009-2010 stage ("Letter 2104").
Pursuant to the 2005 Enterprise Law, no later than 1 July 2010 a State enterprise established under the 2003 Law on State Enterprises must be converted into a limited liability company or shareholding company. Conversion of such State enterprises is implemented in accordance with the annual schedule of conversion.
In Letter 2104, the Prime Minister agrees with the Ministry of Industry and Trade's plan of re-arrangement and equitisation of the Ministry's sixteen State enterprises as follows:
Enterprises to be equitised:
Enterprises to be converted into ones operating in the form of the parent company-subsidiary:
Enterprises to be converted into one-member limited liability companies with 100% charter capital held by the State:
Pursuant to Decree No. 109/2007/ND-CP on conversion of enterprises with 100% State capital into shareholding companies ("Decree 109"), to be equitised, an enterprise with 100% State capital must satisfy the two following conditions:
(a) being not an enterprise where the State needs to hold 100% charter capita; and
(b) still having State capital after financial matters are settled and its value re-assessed.
Of interest, domestic and foreign investors may purchase shares of these enterprises upon their equitisation.
Decree 109 provides that a foreign investor wishing to purchase shares must open a deposit account at a payment service-providing organisation operating in Vietnam. All activities of purchasing and selling shares, receiving and using dividends or other share-related revenues and expenses must be conducted via this account.
For inquiries related to this Client Alert, please contact:
Dao Nguyen ( )
Thinh Dan ( )
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