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Vietnam revises enterprise law to make firms with over 50% state ownership legally state-owned

Vietnam revises enterprise law to make firms with over 50% state ownership legally state-owned

Friday, June 19, 2020, 18:05 GMT+7
Vietnam revises enterprise law to make firms with over 50% state ownership legally state-owned
Deputies sit in the hall of Vietnam’s lawmaking National Assembly in Hanoi in this file photo. Photo: Quochoi.vn

Firms in which the state holds over 50 percent of the charter capital will be reclassified as state-owned enterprises (SOEs), according to revisions to Vietnam’s Enterprise Law adopted by lawmakers on Thursday.

On Wednesday, the lawmaking National Assembly (NA) adopted the amended law, which consists of ten chapters and 218 articles and is set to take effect on January 1, 2021.

The law comprises several new regulations on corporate operations, including a revision regarding SOEs.

State-owned enterprises are defined as those with over 50 percent state ownership, according to the revised law.

Currently, the 2014 Law on Enterprise of Vietnam stipulates that only firms with 100 percent state ownership are classified as state-owned enterprises.

A group of delegates had registered their disapproval of the new definition of SOEs prior to voting, said Vu Hong Thanh, chairman of the NA’s Economic Committee.

“They felt discontented because the definition of an SOE is constantly revised but still fails to ensure consistency and, in turn, impacts how these enterprises run their business,” Thanh explained.

“It also creates differences in the way they are managed compared to other [types of] enterprises.”

Thanh noted that the definition of SOEs has been amended in such a way that SOEs will be classified into different levels.

Each SOE level includes specific regulations on their organization and management in order to enhance the effectiveness of their governance, publicity, transparency, and accountability, thus guaranteeing equality between all kinds of companies.

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Pham Nhat / Tuoi Tre News

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