Decree 47/2021 implementing the Enterprise Law 2020 and Decree 10/2019 implementing the Law on Management State Capital 2014 provide helpful clarification on (1) the entities who can act as the owner representative agency (cơ quan đại diện chủ sở hữu) of the State in a SOE, and (2) calculation of State shareholding in an enterprise. In particular,

Under Decree 10/2019, the Institutional Representative only include (i) the Commission for the Management of State Capital at Enterprises (CMSC); (ii) Ministries, Ministry-equivalent agencies, Governmental agencies, provincial People’s Committee; and (iii) the State Capital Investment Corporation (SCIC). Accordingly, other SOEs such as EVN or PVN are not regarded as an Institutional Representative. In the past, it is not clear an SOE can be regarded as the Institutional Representative in another SOE.
Being consistent with Decree 10/2019, Decree 47/2021 provides that only shares or capital contribution held by all Institutional Representatives in an enterprise are taken into account when calculating the shareholding or voting percentage of the State in such enterprise. In the past, it is not clear if the shares or capital contribution held by an SOE could be counted as State capital in another enterprise. The clarification is important since it helps to clarify whether an enterprise is an SOE or how much an enterprise is owned by the State. For example, an SOE (i.e., companies with more than 50% State shareholding) must follow compulsory tender offer rules, or is prohibited from investment in real estates and securities.
Decree 47/2021 clearly refers to “all Institutional Representatives” in an enterprise. Accordingly, it appears that there may be more than one Institutional Representative in an SOE.

This post is written by Nguyen Thu Giang and Nguyen Quang Vu.

Vietnam Business Law