|
THE GOVERNMENT
|
|
THE SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
|
|
No. 38/2018/ND-CP
|
|
Hanoi, March 11, 2018
|
DECREE
Prescribing in detail investment in innovative startup small- and medium-sized enterprises[1]
Pursuant to the June 19, 2015 Law on Organization of the Government;
Pursuant to the November 26, 2014 Law on Enterprises;
Pursuant to the November 26, 2014 Law on Investment;
Pursuant to the November 26, 2014 Law on Management and Use of State Capital Invested in Production and Business at Enterprises;
Pursuant to the June 25, 2015 Law on the State Budget;
Pursuant to the June 12, 2017 Law on Support for Small- and Medium-Sized Enterprises;
At the proposal of the Minister of Planning and Investment;
The Government promulgates the Decree prescribing in detail investment in innovative startup small- and medium-sized enterprises.
Chapter I
GENERAL PROVISIONS
Article 1. Scope and subjects of regulation
1. Scope of regulation:
This Decree guides investment in innovative startup small- and medium-sized enterprises; the establishment, management and operation of innovative startup investment funds; and the mechanism for use of local budget funds for investment in innovative startup small- and medium-sized enterprises.
2. Subjects of regulation:
a/ Investors in innovative startup small- and medium-sized enterprises as defined in Clause 1, Article 18 of the Law on Support for Small- and Medium-Sized Enterprises;
b/ Innovative startup small- and medium-sized enterprises as defined in Clause 2, Article 3 of the Law on Support for Small- and Medium-Sized Enterprises;
c/ Agencies, organizations and individuals involved in the implementation of this Decree.
Article 2. Interpretation of terms
In this Decree, the terms below are construed as follows:
1. Investment in innovative startup small- and medium-sized enterprises (below referred to as investment in innovative startups) means an investor’s pouring of capital to carry out business activities through contributing capital to establish, or purchasing shares or contributed capital amounts of, innovative startup small- and medium-sized enterprises that are not public companies.
2. Innovative startup investment fund means a fund formed from contributed capital amounts of private investors for investment in innovative startups.
3. An innovative startup investment fund’s contributed capital amount means the total value of assets contributed by investors to the fund.
4. Company managing an innovative startup investment fund means a company established in accordance with the law on enterprises and engaged in managing innovative startup investment funds.
Article 3. Investment in innovative startups
1. The investors defined in Clause 1, Article 18 of the Law on Support for Small- and Medium-Sized Enterprises may invest in innovative startups in the forms not banned by law, including:
a/ Contributing capital to establish, or purchasing shares or contributed capital amounts of, innovative startup small- and medium-sized enterprises;
b/ Establishing, or contributing capital to, innovative startup investment funds for making investment.
2. Enterprises may use their science and technology development funds for making investment in innovative startups in accordance with the Law on Technology Transfer and this Decree. State enterprises shall invest in innovative startups in accordance with the law on management and use of state capital invested in production and business at enterprises and relevant laws.
3. Investors shall take responsibility before law for ensuring that their investments are of lawful origin and do not violate Vietnamese and international laws against money laundering.
Article 4. Enterprises investing in innovative startups
1. Enterprises established under the Law on Enterprises may invest in innovative startups in accordance with this Decree.
2. When investing in innovative startups, enterprises shall additionally notify the business line of investment in innovative startups in accordance with the law on enterprise registration.
3. Business registration agencies shall examine the validity of dossiers and add the business line of investment in innovative startups in accordance with the law on enterprise registration.
Chapter II
INNOVATIVE STARTUP INVESTMENT FUNDS
Article 5. Innovative startup investment funds
1. An innovative startup investment fund has no legal person status and may be formed from capital amounts contributed by no more than 30 investors on the basis of the fund’s charter. An innovative startup investment fund may not contribute capital to another one.
2. Contributions may be made in Vietnam dong, gold, land use rights value, or other assets which can be valued in Vietnam dong. Investors may not use loans to contribute to innovative startup investment funds.
3. Investment portfolios and activities of an innovative startup investment fund:
a/ Making deposits at commercial banks in accordance with law;
b/ Making investments not exceeding 50% of the charter capital of the invested innovative startup small- and medium-sized enterprise.
4. All contributed capital amounts and assets of investors at an innovative startup investment fund shall be accounted independently from the company managing the fund.
5. Investors contributing capital to establish an innovative startup investment fund shall reach agreement among themselves on the competence to decide on portfolios and such agreement shall be stated in the fund’s charter and contract (if any) signed with the company managing the fund.
Article 6. Charter of an innovative startup investment fund
1. The charter of an innovative startup investment fund shall be approved by all of its investors.
2. A fund’s charter must have the following principal contents:
a/ Name, date of formation and operation duration of the fund, and company managing the fund;
b/ Operation objectives; areas of investment; and operation principles;
c/ Contributed capital amounts of the fund and regulations on increase and decrease of contributed capital amounts;
d/ Benefits and obligations (such as wages, bonus and operation budget) of the company managing the fund and the representative board and director of the fund; and cases of change of the company managing the fund and the representative board and director of the fund;
dd/ Regulations on the congress of investors;
e/ Regulations on the competence to decide on investment portfolios;
g/ Regulations on preservation of the register of the fund’s investors;
h/ Regulations on profit sharing;
i/ Regulations on settlement of conflicts of interest;
k/ Regulations on reporting;
l/ Regulations on dissolution and liquidation of the fund;
m/ Regulations on transfer of contributed capital amounts of investors;
n/ Procedures for revision of the fund’s charter;
o/ Other contents (if any).
3. In a fund’s charter, operation objectives must indicate the following recommendations: This fund aims to invest in innovative startup small- and medium-sized enterprises. The investment in this fund is only suitable to investors that are ready to accept potential high risks. Investors in this fund should have careful consideration before contributing capital and deciding on investment.
Article 7. Management of innovative startup investment funds
1. An innovative startup investment fund shall be managed after one of the following models:
a/ Congress of investors, and company managing the fund;
b/ Congress of investors, representative board or director of the fund, and company managing the fund;
c/ Congress of investors, representative board and director of the fund, and company managing the fund.
2. Investors in an innovative startup investment fund may establish or hire a company to manage the fund. When managing the fund, this company shall carry out procedures for formation of the fund and notify the addition of the business line of managing innovative startup investment funds in accordance with the law on enterprise registration.
3. Management of an innovative startup investment fund prescribed in this Decree must comply with the fund’s charter and contracts (if any) signed with the fund, and shall not be regulated by the securities law.
4. Unless otherwise prescribed by the fund’s charter, every 3 months, the company managing the fund shall report to the representative board and director of the fund:
a/ Information on the fund’s portfolios, including the amount invested in each innovative startup small- and medium-sized enterprise;
b/ Information on the tentative plan on investment and capital withdrawal (if any);
c/ Expense for management work and bonus (if any) payable to the company managing the fund and representative board and director of the fund, and other service charges specified in the fund’s charter that arise in the reporting period;
d/ Other information as required by the representative board and director of the fund.
5. The transfer of shares by founding members at companies managing innovative startup investment funds must comply with the Law on Enterprises.
Article 8. Congress of investors
1. The congress of investors consists of all investors contributing capital to an innovative startup investment fund and is the fund’s supreme decision-making body. The congress of investors shall:
a/ Decide on the revision of the fund’s charter and contract signed with the company managing the fund;
b/ Decide on change of the fund’s investment policies and objectives; and replacement of the company managing the fund and representative board and director of the fund;
c/ Decide on dissolution of the fund; increase and decrease of contributed capital amounts of the fund; and extension of its operation duration;
d/ Decide on contracts and transactions in accordance with Article 10 of this Decree;
dd/ Approve the selection of an audit firm to audit annual financial statements of the fund, and an independent valuation organization (if any); and approve financial statements and reports on assets and annual operation of the fund;
e/ Consider and handle violations committed by the company managing the fund that cause loss to the fund;
g/ Decide on other issues within its competence prescribed in the fund’s charter.
2. Decisions of the congress of investors shall be approved by voting at meetings, written consultation, or in another form as prescribed in the fund’s charter. Each investor has a number of votes corresponding to the ratio of its/his/her capital amount contributed to the fund.
3. The congress of investors shall be held under the fund’s charter.
4. The company managing the fund shall convene an extraordinary meeting of the congress of investors at the request of the representative board or director of the fund, an investor or a group of investors owning more than 10% of the total contributed capital amounts for at least 6 consecutive months or a smaller percentage as prescribed in the fund’s charter in the following cases:
a/ There is a ground to believe that the company managing the fund infringes upon its obligations or investors’ rights or issues decisions beyond its competence prescribed in the fund’s charter or assigned by the congress of investors, causing loss to the fund;
b/ Other cases as prescribed in the fund’s charter.
5. An extraordinary meeting of the congress of investors shall be held within 30 days after the company managing the fund receives a request for convening such meeting. At least 15 days before this meeting takes place, the company managing the fund shall send the meeting’s agenda and relevant documents to all investors, stating the reason and purpose of the meeting.
6. In case the company managing the fund fails to convene a meeting of the congress of investors under Clauses 4 and 5 of this Article, it shall take responsibility before law and compensate for damage (if any) caused to the fund.
Article 9. Representative board and director of the fund
1. The representative board and director of the fund shall be elected by the congress of investors to represent investors, and have the rights and obligations stated in the fund’s charter.
2. Decisions of the fund’s representative board shall be approved by voting at meetings or written consultation or in another form prescribed in the fund’s charter. Each member of the fund’s representative board has one equal vote.
3. Unless otherwise prescribed by the fund’s charter, the representative board and director of the fund shall:
a/ Examine the observance, rationality, lawfulness, truthfulness and prudence in the operation of the company managing the fund;
b/ Appraise the completeness, lawfulness and truthfulness of reports submitted by the company managing the fund;
c/ Review, examine and assess the operational efficiency of the company managing the fund, take risk management measures and issue warnings to investors.
Article 10. Transactions to be approved by the congress of investors, and notification of related interests
1. The fund’s following transactions shall be approved by the congress of investors before being conducted:
a/ Transactions between the fund and an innovative startup small- and medium-sized enterprise whose at-law representative is a person related to the investor that has contributed a capital amount equaling at least 35% of the fund’s total contributed capital amounts or a smaller percentage stated in the fund’s charter. In this case, the investor with related interests may not vote. A contract or transaction shall be approved when it is voted for by at least 65% of the total remaining investors;
b/ Other transactions as prescribed in the fund’s charter.
2. Unless otherwise prescribed by the fund’s charter, the company managing the fund shall notify the representative board and director of the fund within 7 days from the date of occurrence, and concurrently notify the congress of investors at its annual meeting, of the following information:
a/ List of persons related to the company managing the fund;
b/ Name, identification number and head office address of the enterprise in which a member of the Members’ Council, member of the Board of Directors, or director or director general of the company managing the fund owns contributed capital amounts or shares; and percentage and time of ownership of such capital amounts or shares.
3. Related persons shall be determined under Article 4 of the Law on Enterprises.
Article 11. Notification of formation of innovative startup investment funds
1. Within 5 working days after an innovative startup investment fund is formed and before the fund commences operation, the company managing the fund shall send a notice of the formation, made according to Forms No. 01a and No. 1b in the Appendix to this Decree, to the business registration agency of the place where the company is located. This notice shall be enclosed with:
a/ The fund’s charter;
b/ The contract (if any) hiring the company managing the fund;
c/ The bank’s written certification of the contributed capital amount;
d/ A certified copy of the people’s identity card, passport or citizen’s identity card, for an individual investor; or of the establishment decision, enterprise registration certificate or document of equivalent legal validity, for an institutional investor;
dd/ The meeting minutes and decision of the general meeting of shareholders or Board of Directors, or decision of the Members’ Council or the owner as prescribed in the company charter of the institutional investor, on the contribution of capital to the fund, and appointment of an authorized representative of the contributed capital amount enclosed with his/her resume.
2. Within 15 working days after receiving the notice, the business registration agency shall consider the validity of the notice and enclosed papers.
3. In case the notice and enclosed papers are valid, the business registration agency shall send a document on the lawful formation of the fund to the company managing the fund. If the notice and enclosed papers are invalid, the business registration agency shall inform such in writing to the company managing the fund, stating the reason and requirements (if any) for modification and supplementation.
4. Within 5 working days after receiving a notice of the lawful formation of the fund, the company managing the fund shall disclose on its website or portal (below referred to as portal) information on the formation of the fund and send a copy of this notice to the Ministry of Planning and Investment for being posted on the national portal on support for small- and medium-sized enterprises. The fund may only operate after its information is published on this portal.
5. The company managing the fund shall take responsibility before law for the truthfulness and accuracy of the contents of the notice of the formation of the fund and enclosed papers. The business registration agency shall take responsibility for the validity of such notice and enclosed papers but not be answerable for the violations committed by the company managing the fund and investors.
6. The business registration agency shall not settle disputes between investors and between investors and the company managing the fund or other organizations and individuals.
7. The increase or decrease in contributed capital amounts of the fund; extension of the operation duration; liquidation or dissolution of the fund; and transfer of contributed capital amounts among investors in the fund shall be notified to the business registration agency of the place where the company managing the fund is located for disclosure on the national business registration portal.
Article 12. Increase or decrease in contributed capital amounts of innovative startup investment funds
1. The increase or decrease in contributed capital amounts of an innovative startup investment fund must comply with the following provisions:
a/ Such increase or decrease is permitted in the fund’s charter;
b/ Such increase or decrease is approved by the congress of investors.
2. Innovative startup investment funds may increase capital by additionally raising from existing investors or new investors. In this case, the number of investors in the fund must still comply with Article 5 of this Decree.
3. In case of capital decrease, assets distributed to investors may be cash or other assets as decided by the congress of investors in the fund. The company managing the fund shall distribute assets in proportion to contributed capital amounts of investors. The transfer and ownership registration of assets for investors and related tax obligations toward the State must comply with relevant laws.
4. Within 7 days after completing the increase or decrease in contributed capital amounts of the fund, the company managing the fund shall notify such increase or decrease to the business registration agency as follows:
a/ To send a notice of the increase or decrease in contributed capital amounts of the fund, made according to Form No. 02 in the Appendix to this Decree;
b/ To send the meeting minutes and resolution of the congress of investors regarding such increase or decrease and relevant papers;
c/ To send the revised charter of the fund;
d/ To send the written agreement on capital contribution and list of capital contributors, contributed capital amounts of investors and their holdings before and after the increase or decrease;
dd/ To send the written certification of additionally contributed capital amounts and list of contributed assets of the fund, issued by the company managing the fund. In case of capital decrease, to send the written certification of the distribution of assets to investors enclosed with a list of distributed assets, issued by the company managing the fund.
5. Procedures for notifying the increase or decrease in contributed capital amounts of the fund, and responsibilities of the company managing the fund and business registration agency are the same as those for notifying the formation of the fund prescribed in Clauses 2 thru 6, Article 11 of this Decree.
Article 13. Notification of extension of the operation duration of innovative startup investment funds
1. The extension of the operation duration of an innovative startup investment fund must comply with the decision of the congress of investors in the fund.
2. At least 15 days before the fund’s operation duration expires, the company managing the fund shall send a notice of the extension of the fund’s operation duration to the business registration agency of the place where the company is located. The notice must consist of the following documents:
a/ A notice on the extension of the fund’s operation duration, made according to Form No. 03 in the Appendix to this Decree;
b/ The meeting minutes and resolution of the fund’s congress of investors on the extension, stating the extended period;
c/ A detailed portfolio and report on the net asset value of the fund as of the last date of valuation, calculated to the date of submission of the dossier of request for extension;
d/ Change (if any) in investors or the fund’s charter.
3. Procedures for notifying the extension of the fund’s operation duration and responsibilities of the company managing the fund and business registration agency are the same as those for notifying the formation of the fund prescribed in Clauses 2 thru 6, Article 11 of this Decree.
Article 14. Dissolution of innovative startup investment funds
1. An innovative startup investment fund shall be liquidated and dissolved in the following cases:
a/ The operation duration stated in the fund’s charter expires;
b/ The congress of investors decides to dissolve the fund ahead of the expiration of the operation duration stated in the fund’s charter expires;
c/ The company managing the fund is dissolved, goes bankrupt or has its enterprise registration certificate revoked while the fund’s representative board cannot establish another company for replacement within 2 months after the event occurs;
d/ Other cases as prescribed in the fund’s charter.
2. Within 30 days after the fund is dissolved under Point b, c or d, Clause 1 of this Article, or at least 3 months before the date the fund is dissolved under Point a, Clause 1 of this Article, the company managing the fund shall convene the congress of investors to approve the fund dissolution plan.
3. The congress of investors may appoint an independent audit firm to inspect, assess and supervise all activities of liquidation, valuation, valuation appraisal, and distribution of the fund’s assets to investors; or maintain the operation of the incumbent representative board and director of the fund for supervising the liquidation and distribution of the fund’s assets.
4. The company managing the fund shall liquidate and distribute assets to investors under the plan approved by the congress of investors.
5. The congress of investors shall reach agreement on the date of dissolution of the fund. From this date, the company managing the fund may not:
a/ Invest in or purchase assets for the fund;
b/ Donate the fund’s assets;
c/ Carry out other transactions in order to disperse the fund’s assets.
6. Assets of the fund undergoing dissolution include:
a/ Assets and rights over assets of the fund at the time the fund is forced to be dissolved;
b/ Profits, assets and rights over assets to be acquired by the fund from carrying out transactions established before the time the fund is forced to be dissolved.
7. The proceeds from the liquidation of the fund’s assets and other assets shall be used in the following order of priority for:
a/ Fulfilling financial obligations toward the State;
b/ Paying payables to the company managing the fund and the representative board and director of the fund, other payables and expenses for dissolution of the fund. In case the fund is forced to be dissolved under Point c, Clause 1 of this Article, it is not required to pay contractual expenses to the company managing the fund and the representative board and director of the fund from the date the event occurs;
c/ Making payments to investors with other assets corresponding to the ratios of their capital amounts contributed to the fund.
8. The fund’s asset liquidation results shall be certified by the company managing the fund and approved by the representative board or director of the fund that supervises the liquidation of assets.
Article 15. Procedures for notifying dissolution of an innovative startup investment fund
1. Within 7 days after the congress of investors approves the dissolution of an innovative startup investment fund, the company managing the fund shall issue a notice of such dissolution to the business registration agency of the place where the company is located, made according to Form No. 04 in the Appendix to this Decree.
2. A notice of liquidation and dissolution of the fund must comprise:
a/ The meeting minutes and resolution of the congress of investors on the dissolution of the fund, enclosed with a plan and roadmap for asset liquidation and distribution approved by the congress of investors, which must state the principles of valuation of assets as of the date of dissolution and time of asset liquidation as prescribed by law, the fund’s charter and valuation manual; and method of distribution of assets to investors and provision of information on asset liquidation and distribution to investors;
b/ A written commitment signed by the at-law representative of the company managing the fund on completion of asset liquidation procedures for dissolution of the fund.
3. Procedures for notifying the liquidation and dissolution of the fund, and responsibilities of the company managing the fund and business registration agency are similar to those for notifying the formation of the fund prescribed in Clauses 2 thru 6, Article 11 of this Decree.
4. Liquidation of the fund’s assets and the time limit for such liquidation must comply with the fund dissolution plan approved by the congress of investors but must be within 1 year from the date of disclosing the notice of dissolution of the fund. During the liquidation of the fund’s assets for dissolution, management expenses, supervision expenses and other expenses shall be collected at the rates approved by the congress of investors. After the date of dissolution of the fund, the company managing the fund shall monthly provide investors with information on the rate of payment per contributed capital amount, expenses arising in the month, the fund’s remaining net asset value and asset values distributed to investors. Such information shall also be provided to the business registration agency for monitoring and supervision.
5. Within 5 working days after completing the dissolution of the fund, the company managing the fund shall publish on its portal information on completion of the liquidation, distribution and dissolution of the fund and concurrently notify the fund dissolution result to the business registration agency and Ministry of Planning and Investment for disclosure on the national portal on support for innovative startup small- and medium-sized enterprises.
6. In case the notice of the fund dissolution result is inaccurate or contains forged documents, the company managing the fund and related organizations and individuals shall take joint responsibility for paying the unpaid debts and take personal responsibility before law for the consequences caused for 3 years from the date of notifying the fund dissolution result to the business registration agency.
Article 16. Sharing of the fund’s dividends
1. Investors are entitled to the fund’s dividends under the policy on profit distribution stated in the fund’s charter and dividend sharing plan approved by the last congress of investors. The payment of dividends must adhere to the following principles:
a/ Dividends may be shared only to investors that make profits and have fully paid taxes and other financial obligations as prescribed by law;
b/ The payment complies with the policy on dividend sharing stated in the fund’s charter;
c/ Dividend levels shall be decided by the congress of investors in conformity with the investment objectives and regulations of the fund’s charter regarding the policy on sharing of the fund’s profits.
2. At least 15 days before distributing dividends, the company managing the fund shall notify such to investors according to their registered addresses.
Article 17. Transfer of contributed capital amounts of investors
1. Unless otherwise prescribed by the fund’s charter or law, investors contributing capital to the fund may freely transfer such contributed capital amounts. The transfer of part or the whole of contributed capital amounts to the fund must ensure that after the transfer, the number of investors in the fund still complies with Article 5 of this Decree.
2. Within 15 days after completing transactions, the company managing the fund shall send a notice to the business registration agency of the transfer of contributed capital amounts of investors, which must comprise:
a/ A notice of the transfer of contributed capital amounts of investors, made according to Form No. 05 in the Appendix to this Decree, which must state information on parties to the transaction, their holding rates (before and after the transaction), and value of the transaction;
b/ A copy of the transfer contract of investors, certified by the company managing the fund.
Article 18. Reporting on and inspection of operation of innovative startup investment funds
1. Before January 15 every year, enterprises investing in innovative startups and companies managing innovative startup investment funds shall send reports on their operation, made according to Form No. 06 in the Appendix to this Decree, to the Ministry of Planning and Investment for disclosure on the national portal on support for innovative startup small- and medium-sized enterprises.
2. Business registration agencies may inspect or request competent state agencies to inspect companies managing innovative startup investment funds in terms of contents of the notice of formation of the fund, change of the fund, and other documents on the fund in accordance with this Decree.
Article 19. Accounting and financial regimes
1. Enterprises investing in innovative startups, companies managing innovative startup investment funds and innovative startup investment funds shall apply accounting regimes as prescribed by the accounting law.
2. The transfer of investment capital and profits into and out of the territory of Vietnam by foreign investors in innovative startup small- and medium-sized enterprises must comply with the laws on investment and foreign exchange management.
Chapter III
MECHANISM FOR INVESTMENT OF LOCAL BUDGET FUNDS IN INNOVATIVE STARTUP SMALL- AND MEDIUM-SIZED ENTERPRISES
Article 20. Provisions on investment of local budget funds in innovative startup small- and medium-sized enterprises
1. Based on the capacity of their local budgets, provincial-level People’s Committees shall propose provincial-level People’s Councils to assign local state financial institutions licensed to make financial investment in innovative startup small- and medium-sized enterprises.
2. In case local state financial institutions are organized and operate as off-budget state financial funds, the assignment of tasks to and allocation of funds to the charter capital of these funds must comply with Clause 11, Article 8 of the Law on the State Budget.
3. In case local state financial institutions are organized and operate as enterprises, the addition of their charter capital must comply with Articles 4, 13, 14 and 15 of the Law on Management and Use of State Capital Invested in Production and Business at Enterprises.
4. Principles of investment by local state financial institutions in innovative startups are prescribed by Clause 4, Article 18 of the Law on Support for Small- and Medium-Sized Enterprises.
5. Local state financial institutions shall exercise the rights and perform the responsibilities of the owner’s representative when investing in innovative startup small- and medium-sized enterprises.
6. Information on investment in innovative startups using local budget funds shall be disclosed on the portals of provincial-level People’s Committees of localities where such investment is made.
Article 21. Selection of innovative startup investment funds to make co-investment
1. A local state financial institution may select an innovative startup investment fund to make co-investment that must satisfy at least the following conditions:
a/ Committing to make investment together with the institution in innovative startup small- and medium-sized enterprises;
b/ Having at least one year’s experience in investing in innovative startups;
c/ Being capable of paying expenses when making investment;
d/ Satisfying other conditions (if any).
2. Annually, local state financial institutions shall evaluate selected innovative startup investment funds, adjust the list thereof and announce it on the portals of the institutions and provincial-level People’s Committees.
Article 22. Invested enterprises
1. To be invested by a local state financial institution, an innovative startup small- and medium-sized enterprise must satisfy the following criteria:
a/ Operating in a field which the concerned locality prioritizes for development.
b/ Being selected by at least one of the innovative startup investment funds referred to in Article 21 of this Decree.
2. Quarterly, local state financial institutions shall update the list of invested enterprises and announce it on the portals of the institutions and provincial-level People’s Committees.
Article 23. Forms and methods of investment
1. Innovative startup investment funds referred to in Article 21 of this Decree shall evaluate innovative startup small- and medium-sized enterprises, and propose their selection plans to local state financial institutions for consideration and decision on co-investment.
2. For local state financial institutions organized and operating as state enterprises, procedures for their investment in innovative startup small- and medium-sized enterprises and management of contributed capital amounts must comply with Articles 28 and 30 of the Law on Management and Use of State Capital Invested in Production and Business at Enterprises.
3. For local state financial institutions organized and operating as off-budget state financial funds, procedures for their investment in innovative startup small- and medium-sized enterprises and management of contributed capital amounts must comply with the regulations on organization and operation of such funds and the Law on Management and Use of State Capital Invested in Production and Business at Enterprises.
4. Decisions on investment in innovative startup small- and medium-sized enterprises from innovative startup investment funds do not depend on investment decisions of local state financial institutions.
5. Investment from a local state financial institution in an enterprise defined in Article 22 of this Decree must not exceed 30% of the total investment capital raised by such enterprise from co-investing innovative startup investment funds.
Article 24. Investment duration
The duration of investment from local budgets must not exceed 5 years from the time of investment, which shall be counted from the date of signing the investment contract between a local state financial institution and the invested enterprise.
Article 25. Transfer of investment capital
1. Within 5 years from the time of investment, a local state financial institution may transfer its shares or contributed capital amounts in the invested enterprise to private investors, giving priority to the co-investing innovative startup investment fund and current shareholders of the invested enterprise.
2. The transfer of investment capital must comply with Article 31 of the Law on Management and Use of State Capital Invested in Production and Business at Enterprises.
3. The proceeds from the transfer of capital, after subtracting transfer expenses and taxes (if any), shall be remitted to the state budget.
Article 26. Setting up of risk provision funds
Local state financial institutions shall set up risk provision funds for their investments in accordance with regulations on financial management mechanism applicable to local state financial institutions.
Article 27. Investment evaluation
Local state financial institutions shall evaluate their investments in innovative startups using local budget funds and send reports thereon to People’s Committees and the Ministry of Planning and Investment under Article 31 of the Law on Support for Small- and Medium-Sized Enterprises.
Chapter IV
STATE MANAGEMENT OF INVESTMENT IN INNOVATIVE STARTUPS AND ORGANIZATION OF IMPLEMENTATION OF THE DECREE
Article 28. Responsibilities of the Ministry of Planning and Investment
To assume the prime responsibility for, and coordinate with other ministries, sectors and provincial-level People’s Committees in, monitoring, summarizing and evaluating the implementation of this Decree, and propose amendments and supplements to this Decree when necessary.
Article 29. Responsibilities of the Ministry of Finance
To provide accounting guidelines for enterprises investing in innovative startups, companies managing innovative startup investment funds and innovative startup investment funds to solve problems they face during their operation.
Article 30. Responsibilities of provincial-level People’s Committees
1. To perform the state management of investment in innovative startups in their localities; to inspect and supervise operation of companies managing innovative startup investment funds and innovative startup investment funds.
2. To disclose information about local budget funds used for investment in innovative startup small- and medium-sized enterprises and take responsibility for violations in the fields under their management in accordance with law when assigning local state financial institutions to invest in innovative startup small- and medium-sized enterprises.
3. To send annual and extraordinary reports on results of investment in innovative startups to the Ministry of Planning and Investment and Ministry of Finance in accordance with this Decree.
4. To propose solutions to removing difficulties in the course of investing local budget funds in innovative startups; to propose amendments and supplements to mechanisms and policies on investment in innovative startups.
Article 31. Responsibilities of local state financial institutions
1. To exercise the rights and perform the responsibilities of the owner’s representative for local budget funds invested in innovative startups in accordance with the Law on Management and Use of State Capital Invested in Production and Business at Enterprises.
2. To propose solutions to removing difficulties in the course of making investment in innovative startups.
Article 32. Responsibilities of innovative startup small- and medium-sized enterprises
1. To provide truthful information in the course of raising investment capital.
2. To use investment capital prudently according to contracts signed with investors.
Article 33. Implementation provisions
1. This Decree takes effect on the date of its signing.
2. In the course of organizing the implementation of this Decree, the Government shall review and adjust it as necessary.
3. Ministers, heads of ministerial-level agencies, heads of government-attached agencies, chairpersons of provincial-level People’s Committees, chairpersons of Management Boards and directors of local state financial institutions, and heads of related agencies and organizations shall implement this Decree.-
On behalf of the Government
Prime Minister
NGUYEN XUAN PHUC
* The Appendix to this Decree is not translated.
Vietnamese
Decree 38/2018/NĐ-CP DOC (Word)
Decree 38/2018/NĐ-CP PDF (Original)
