Decree No. 147/2020/ND-CP on the organization and operation of local development investment funds

DECREE

REGULATIONS ON THE ORGANIZATION AND OPERATIONS OF LOCAL DEVELOPMENT INVESTMENT FUNDS

Based on the Law Amending and Supplementing Certain Provisions of the Government Organization Law and the Local Administration Organization Law dated November 22, 2019;

Pursuant to the Law on Local Administration Organization dated June 19, 2015;

Based on the Electricity Law dated November 30, 2024;

Pursuant to the State Budget Law on June 25, 2015;

Pursuant to the Public Investment Law dated June 13, 2019;

Pursuant to the Law on Credit Organizations dated June 16, 2010 and the Law Amending and Supplementing Certain Provisions of the Law on Credit Organizations dated November 20, 2017;

Pursuant to the Investment Law dated June 17, 2020;

At the proposal of the Minister of Finance;

The Government issues this Decree stipulating the organization and operations of local development investment funds.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Decree stipulates the organization and operations of local development investment funds established by provinces and centrally governed cities (hereinafter referred to as local development investment funds or Funds); the activities of capital mobilization, lending, investment, entrusting and receiving entrustment for the implementation of the functions of local development investment funds of the State Capital Financial Investment Company of Ho Chi Minh City (hereinafter referred to as HFIC).

Article 2. Interpretation of Terms

In this Decree, the following terms are understood as follows:

1. "Operating capital" is the total amount of equity and raised capital of the local development investment fund at a given time.

2. "Fund manager" refers to individuals holding positions including: Chairman, Vice-Chairman, member of the Management Board, Head of Supervisory Board, General Director/Managing Director (hereinafter referred to as Managing Director), Deputy General Director/Deputy Managing Director (hereinafter referred to as Deputy Managing Director), Chief Accountant.

Article 3. Legal status and legal personality of local development investment funds

1. Local development investment funds are state financial funds outside the budget established by the People's Committee of provinces and centrally governed cities (hereinafter referred to as provincial People's Committee) operating without profit objectives, ensuring the preservation and development of capital; implementing the function of lending and investing locally according to the provisions of this Decree. The provincial People's Committee performs the function of representing the state ownership over the Fund.

2. Local development investment funds have legal personality, registered capital, seals, and accounts opened at the State Treasury and commercial banks legally operating in Vietnam according to the law.

3. Name of the local development investment fund: Development Investment Fund, combined with the name of the province or centrally governed city.

4. HFIC is established in accordance with the Enterprise Law and relevant laws. The activities of capital mobilization, lending, investment, entrusting and receiving entrustment for the implementation of the functions of local development investment funds of HFIC shall be carried out in accordance with the provisions of this Decree and guiding documents.

Article 4. Principles and scope of operations of local development investment funds

1. Principles of operation of local development investment funds:

a) Financial autonomy, not for profit objectives, ensuring the preservation and development of capital; operating independently from the state budget.

b) Limited liability within the scope of registered capital.

c) Implement lending and investment in accordance with the objects and conditions stipulated in this Decree.

2. Scope of operations of local development investment funds:

a) Mobilizing medium and long-term capital from organizations both inside and outside the country according to the provisions of this Decree and relevant laws.

b) Lending projects within the investment and lending portfolio of the Fund as stipulated in this Decree.

c) Investing in projects, establishing economic organizations, contributing capital, purchasing shares, and participating in the capital of economic organizations within the investment and lending portfolio of the Fund as stipulated in this Decree.

d) Entrusting lending and investment; accepting entrustment to manage local state financial funds, domestic and foreign organizations and individuals in accordance with the law and this Decree.

đ) Carrying out the business of issuing local government bonds under the authorization of the provincial People's Committee in accordance with the law.

Article 5. Responsibilities and Authorities of the Local Development Investment Fund

1. Responsibilities of the Local Development Investment Fund:

a) Implement investment and lending activities according to the list of investment and lending fields issued by the Provincial People's Committee in accordance with this Decree.

b) Implement financial systems, accounting, auditing, and reporting as prescribed in this Decree.

c) Adhere to the Charter on the organization and operation of the Fund.

d) Be subject to inspection, examination, and auditing by state management agencies authorized under the law; provide data and publicly disclose financial information as required by law.

đ) Comply with provisions set forth in this Decree and other relevant laws concerning the operations of the Local Development Investment Fund.

2. Authorities of the Local Development Investment Fund:

a) Organize its activities in accordance with this Decree, the Charter on the organization and operation of the Fund, and relevant laws.

b) Select projects that meet the conditions for investment and lending as stipulated in this Decree.

c) Recruit, arrange, train, and utilize labor as prescribed in this Decree, the Charter on the organization and operation of the Fund, and relevant laws.

d) Refuse requests for information provision or resource utilization from the Fund if such requests contravene the law.

đ) Contact and coordinate with functional agencies and related units within the locality to seek and develop investment projects.

Chapter II

ESTABLISHMENT AND ORGANIZATIONAL STRUCTURE OF THE LOCAL DEVELOPMENT INVESTMENT FUND

Article 6. Conditions for Establishing a New Local Development Investment Fund

1. Have a registered capital at the time of establishment not less than 300 billion VND.

2. Have a proposal for establishing the Local Development Investment Fund approved by the Provincial People's Council.

3. Have a draft Charter on the organization and operation of the Local Development Investment Fund consistent with the provisions of Article 8 of this Decree.

Article 7. Procedures for Establishing a New Local Development Investment Fund

1. When there is a need to establish a Local Development Investment Fund, the Provincial People's Committee shall prepare a proposal for establishing the Fund and submit it to the Provincial People's Council for approval. The proposal for establishing the Fund includes the following main contents:

a) Objectives, necessity, and feasibility of establishing the Fund, investment needs for socio-economic projects in the locality, scale, scope, content of activities, and the impact of establishing the Fund on socio-economic development in the locality.

b) A plan for allocating the initial registered capital of the Fund to ensure the actual registered capital at the time of establishment as stipulated in Clause 1 of Article 6 of this Decree. When using state budget funds to capitalize the Fund, the proposal must clearly state the amount and the allocation of sources in the medium-term public investment plan of the locality.

c) A plan and sources of funding for the operation of the Local Development Investment Fund, including an estimate of the Fund's ability to raise capital in three years from the date of establishment.

d) A draft Charter on the organization and operation of the Local Development Investment Fund consistent with the provisions of Article 8 of this Decree.

đ) Detailed explanation about the organizational structure and operational machinery of the Fund.

e) A list of proposed key personnel including: Chairman, Vice Chairmen, and members of the Management Board, Supervisory Board, Director, and other key personnel of the Fund meeting the standards and conditions stipulated in this Decree.

g) A method of managing the Fund's operations as prescribed in Clause 1 of Article 14 of this Decree.

h) An estimated plan for the operation and finance of the Local Development Investment Fund in the three years following establishment, accompanied by a list of proposed lending and investment projects and their economic and social benefits.

2. The Provincial People's Council shall examine and approve the proposal for establishing the Local Development Investment Fund.

3. The Provincial People's Committee shall issue a Decision to establish the Fund based on the approved proposal for establishing the Local Development Investment Fund; simultaneously sending a notification letter to the Ministry of Finance regarding the establishment of the Fund.

4. The Provincial People's Committee shall be responsible for providing sufficient registered capital for the Local Development Investment Fund as stipulated in Clause 1 of Article 6 of this Decree.

5. Within thirty days from the date of issuing the Decision to establish the Local Development Investment Fund, the Fund shall be responsible for publicly announcing the establishment of the Fund through mass media.

Article 8. Charter of Organization and Operation of the Local Development Investment Fund

1. The charter of organization and operation of the Local Development Investment Fund includes the following basic contents:

a) Name and location of the main office.

b) Legal status, legal personality, and legal representative.

c) Principles and scope of operation.

d) Registered capital of the Fund.

đ) Organizational structure and management of the Fund.

e) Functions and tasks of the Fund.

g) Functions and tasks of the Management Board, Executive Board, and Supervisory Board.

h) Standards and conditions for positions of Chairman and members of the Management Board, Supervisory Board, Director, Deputy Directors, and Chief Accountant of the Fund.

i) Recruitment of labor, planning, and appointment of other leadership positions of the Fund.

k) Accounting, financial, and auditing systems of the Fund.

l) Procedures for amending and supplementing the charter of organization and operation of the Fund.

m) Relationships and responsibilities between the Fund and state management agencies, borrowing enterprises, and enterprises receiving investment from the Fund.

n) Dispute resolution, restructuring, and dissolution of the Fund.

o) Other contents according to the management requirements of the Fund.

2. The charter of the Local Development Investment Fund is decided and issued by the Provincial People's Committee based on the proposal of the Fund's Management Board.

Article 9. Organizational Structure of the Local Development Investment Fund

1. The organizational structure of the Local Development Investment Fund consists of:

a) Management Board.

b) Supervisory Board.

c) Executive Board including the Fund Director, Deputy Directors, Chief Accountant, and supporting staff.

2. The Provincial People's Committee decides on the planning, appointment, reappointment, resignation, dismissal, transfer, rotation, commendation, disciplinary action, termination, and retirement of Fund managers in accordance with Articles 10, 11, 12, and 13 of this Decree and the charter of organization and operation of the Fund.

Article 10. Management Board of the Local Development Investment Fund

1. The Management Board of the Local Development Investment Fund shall consist of a maximum of five members, including the Chairman, Vice-Chairman, and other members. The term of operation of the Management Board shall not exceed five years. The Director of the Local Development Investment Fund may concurrently serve as Vice-Chairman or member of the Management Board. Other members of the Management Board may concurrently hold positions but shall not hold any other management position within the Fund.

2. The Provincial People's Committee decides on the number of members and the term of operation of the Management Board based on the principle that the number of Management Board members must be odd; it also decides on the planning, appointment, reappointment, resignation, dismissal, transfer, rotation, commendation, disciplinary action, termination, and retirement of the Chairman, Vice-Chairman, and members of the Management Board.

3. Criteria and conditions for appointing and reappointing the Chairman of the Management Board:

a) Must be a Vietnamese citizen residing in Vietnam, possessing full civil capacity.

b) Must have a university degree or higher, with at least five years of experience in managing or operating in one of the fields of economics, finance, banking, business administration, law, accounting, or auditing.

c) Shall not be the spouse, parent, adoptive parent, biological mother, adoptive mother, biological child, adoptive child, full sibling, brother-in-law, sister-in-law, or sister-in-law of a Fund manager.

d) Other criteria and conditions as required by the Provincial People's Committee stipulated in the charter of organization and operation of the Fund.

4. The Vice-Chairman and members of the Management Board must have a university degree or higher, with management capabilities and experience in one of the fields of economics, finance, banking, business administration, law, accounting, or auditing. Specific criteria and conditions for the Vice-Chairman and members of the Management Board are set forth in the charter of organization and operation of the Fund.

5. The working system of the Management Board is specifically regulated in the charter of organization and operation of the Fund to ensure the following contents:

a) Meetings of the Management Board are only valid if attended by at least two-thirds of the members. In cases where meetings are not organized, opinions of Management Board members are obtained through written documentation.

b) Conclusions of the Management Board are expressed through Resolutions and decisions of the Management Board.

c) The Management Board makes decisions on issues based on majority voting, each member of the Management Board having one vote with equal voting rights. Resolutions and decisions of the Management Board take effect when more than 50% of the total number of Management Board members vote in favor or obtain written approval. In case of a tie, the final decision belongs to the side with the opinion of the Chairman of the Management Board or the chairperson of the Management Board meeting.

6. The duties and powers of the Management Board include:

a) Receiving, managing, and utilizing the Fund's capital in accordance with the provisions of the law and the charter of organization and operation of the Fund; ensuring the preservation and development of the Fund's capital.

b) Approving the five-year operational plan and annual financial plan of the Local Development Investment Fund to submit to the Provincial People's Committee for approval.

c) Issuing or amending operational regulations and other regulations as prescribed in the charter of organization and operation of the Fund.

d) Supervising and inspecting the executive machinery of the Local Development Investment Fund in compliance with policies and laws and the implementation of Management Board decisions.

đ) Approving the investment field portfolio, lending, and minimum lending interest rate of the Local Development Investment Fund to submit to the Provincial People's Committee for decision in accordance with this Decree.

e) Deciding on lending, investment activities, capital mobilization plans, and risk management within its authority.

g) Approving the financial report, distribution of revenue surplus, and establishment of reserve funds annually of the Local Development Investment Fund after obtaining the audit opinion of the Supervisory Board to submit to the Provincial People's Committee for approval.

h) Submitting to the Provincial People's Committee for decision on issuing amendments and supplements to the charter of organization and operation of the Local Development Investment Fund.

i) Decide on planning, appointing, reappointing, resignation, removal, transferring, rewarding, disciplining, termination of employment, retirement for positions within the scope of authority as prescribed in the Charter on Organization and Operation of the Fund.

k) Issue or amend the Operational Regulations, task allocation for members of the Management Board of the Fund.

l) Other tasks and powers as stipulated in the Charter on Organization and Operation of the Local Development Investment Fund.

Article 11. Supervisory Board of the Local Development Investment Fund

1. The Supervisory Board of the Local Development Investment Fund assists the Provincial People's Committee and the Management Board of the Fund in supervising the organization and implementation of ownership rights and management operations at the Fund. The Supervisory Board has a maximum of three members, including one head responsible for the activities of the Supervisory Board. The number of members of the Supervisory Board is decided by the Provincial People's Committee based on the scale, nature, and actual operation of the Fund.

2. The Provincial People's Committee decides on planning, appointing, reappointing, resignation, removal, transferring, rewarding, disciplining, termination of employment, retirement for the Head of the Supervisory Board of the Local Development Investment Fund. Planning, appointing, reappointing, resignation, removal, transferring, rewarding, disciplining, termination of employment, retirement for members of the Supervisory Board shall be carried out according to the Charter on Organization and Operation of the Local Development Investment Fund.

3. Criteria and conditions for appointing, reappointing the Head of the Supervisory Board of the Local Development Investment Fund:

a) Must be a Vietnamese citizen residing in Vietnam, possessing full civil capacity.

b) Having a bachelor's degree or higher, with at least three years of experience in one of the fields of accounting, auditing, finance, banking.

c) Other criteria and conditions as required by the management of the Provincial People's Committee stipulated in the Charter on Organization and Operation of the Fund.

4. The Supervisory Board has the following duties and powers:

a) Inspect and supervise compliance with policies, regulations, operational charters, and operational rules to ensure the effectiveness of operations and the safety of assets of the Local Development Investment Fund.

b) Inspect and supervise the legality, honesty, and diligence of the Management Board and Director of the Fund in managing and operating the Local Development Investment Fund.

c) Review reports on operations, financial statements, distribution of revenue and expenditure differences, and the establishment of reserve funds, and reports on the implementation of salaries and bonuses as prescribed by law.

d) Develop plans for implementation; report periodically or urgently on monitoring and inspection work; perform other tasks assigned by the Management Board and the Provincial People's Committee.

5. The operational regime of the Supervisory Board; responsibilities, powers; planning, appointing, reappointing, resignation, removal, transferring, rewarding, disciplining, termination of employment, retirement; relationships between the Supervisory Board of the Fund and related organizations and individuals; and other contents shall be implemented according to the Operational Regulations of the Supervisory Board issued by the Provincial People's Committee.

Article 12. Director of the Local Development Investment Fund

1. The Director of the Local Development Investment Fund is the legal representative of the Fund, accountable to the Provincial People's Committee, the Management Board, and the law for all activities of the Fund.

2. The Provincial People's Committee decides on planning, appointing, reappointing, resignation, removal, transferring, rewarding, disciplining, termination of employment, retirement for the Director of the Local Development Investment Fund.

3. Criteria and conditions for appointing, reappointing the Director of the Local Development Investment Fund:

a) Must be a Vietnamese citizen residing in Vietnam, possessing full civil capacity.

b) Having a bachelor's degree or higher, with managerial capability and at least five years of experience in one of the fields of economics, finance, banking, investment, business administration, law, accounting, auditing.

c) Other criteria and conditions as required by the management of the Provincial People's Committee stipulated in the Charter on Organization and Operation of the Fund.

4. Duties and powers of the Director of the Local Development Investment Fund:

a) Organize and manage the operations of the Local Development Investment Fund in accordance with this Decree, the Charter on Organization and Operation of the Fund, and decisions of the Management Board and the Provincial People's Committee.

b) Submit to the Management Board for issuance of operational regulations of the Fund within their authority.

c) Decide on planning, appointing, reappointing, resignation, removal, transferring, rewarding, disciplining, termination of employment, retirement for positions in the support staff (heads or deputies of business departments) and employees according to the Charter on Organization and Operation of the Fund.

d) Directly manage assets and operating capital and be responsible for their decisions before the Provincial People's Committee and the Management Board of the Fund in accordance with the law and the Charter on Organization and Operation of the Fund.

đ) Carry out other powers and duties as required by the Management Board and the Charter on Organization and Operation of the Fund.

Article 13. Deputy Director, Chief Accountant of the Local Investment Development Fund and Supporting Staff

1. Deputy Director of the Local Investment Development Fund

a) The Deputy Director of the Local Investment Development Fund shall assist the Director of the Fund in managing the operations of the Fund according to the division of labor and authorization; shall be responsible before the Director and the law for the tasks assigned and authorized.

b) The criteria, conditions, authority to appoint, term of office, and number of Deputy Directors of the Local Investment Development Fund are stipulated in the Charter on the organization and operation of the Fund.

2. Chief Accountant of the Local Investment Development Fund

a) The Chief Accountant of the Local Investment Development Fund is responsible for organizing the accounting work of the Fund, assisting the Management Board and the Director of the Fund in financial oversight at the Fund in accordance with the laws on finance and accounting; shall be responsible before the Management Board, the Director of the Fund, and the law for the performance of assigned or delegated duties, functions, and other tasks prescribed under the Accounting Law and related guiding documents (if any).

b) The Chief Accountant of the Local Investment Development Fund must meet the criteria and conditions as prescribed in the Accounting Law, guiding documents, and any amendments, supplements, or replacements (if any). Specific criteria, conditions, and the authority to appoint the Chief Accountant of the Local Investment Development Fund are stipulated in the Charter on the organization and operation of the Fund.

3. The supporting staff of the Local Investment Development Fund includes specialized and professional departments with the function of advising and assisting the Management Board and the Director of the Fund in managing and operating the Local Investment Development Fund.

Article 14. Organization and Management of the Local Investment Development Fund's Operations

1. The Local Investment Development Fund shall be organized and managed in one of the following two ways:

a) Establishing an independent management organization at the local level.

b) Entrusting another financial organization at the local level to manage and operate the activities.

2. The Provincial People's Council decides on the organizational form of the Local Investment Development Fund's management based on the proposal of the Provincial People's Committee, taking into account the actual situation of the locality and the scale of the Fund's operations.

3. In cases where the Local Investment Development Fund is entrusted to another financial organization at the local level for management, the entrustment shall be carried out according to the entrustment document issued by the Provincial People's Committee, including basic contents such as the scope of entrustment, the content and procedures of entrustment, responsibilities, obligations, and rights and powers regarding risks arising, and other relevant contents.

Chapter III

ACTIVITIES OF THE LOCAL INVESTMENT DEVELOPMENT FUND

Section 1

LIST OF SECTORS FOR INVESTMENT AND LOANS BY THE LOCAL INVESTMENT DEVELOPMENT FUND

Article 15. Establishment of the List of Sectors for Investment and Loans by the Local Investment Development Fund

1. Based on the socio-economic development strategy, the five-year socio-economic development plan, the actual situation of the locality, and the scale of operations of the Local Investment Development Fund, annually or during each period, the Local Investment Development Fund proposes a list of sectors for investment and loans aimed at promoting socio-economic development in the locality, including education, healthcare, industry, agriculture, fisheries, environment, energy, housing, culture, tourism, transportation, socialized sectors encouraged, and other priority development sectors in line with the socio-economic development orientation of the locality.

2. On the basis of the proposed list from the Local Investment Development Fund, the Provincial People's Committee reviews and reports to the Provincial People's Council for approval of the list of sectors for investment and loans by the Local Investment Development Fund.

Article 16. Issuance of the List of Investment and Loan Fields for Local Development Funds

1. Based on the Resolution of the Provincial People's Council regarding the list of investment and loan fields for the Fund, the Provincial People's Committee shall issue a decision on the list of investment and loan fields for the local development fund.

2. In cases where there is a need to supplement or adjust the list of investment and loan fields for the Fund, the Provincial People's Committee shall issue a decision to amend and supplement according to the provisions of Article 15 and Clause 1 of this Article.

Section 2

ACTIVITIES OF INVESTMENT

Article 17. Principles and Forms of Investment

1. The use of capital and assets of the local development fund for investment must comply with the provisions of this Decree and not fall within the scope of public investment. In addition to the provisions of this Decree, the investment activities of the Fund must comply with the laws on investment, land laws, and other relevant laws.

2. The local development fund selects investment forms in accordance with the laws on investment, including:

a) Establishing economic organizations.

b) Investing by contributing capital, purchasing shares, or equity stakes of economic organizations.

c) Investing through contracts (public-private partnership - PPP and business cooperation contract - BCC) or implementing investment projects.

d) Other investment forms prescribed by the laws on investment.

3. The local development fund shall not invest in the following cases:

a) Contributing capital, purchasing shares, acquiring a whole enterprise, or implementing a business cooperation contract with an enterprise where the management personnel or representatives of that enterprise are the spouse, father, adopted father, mother, adopted mother, son, adopted son, brother, sister, brother-in-law, brother-in-law, sister-in-law, or sister-in-law of the management personnel of the local development fund.

b) Contributing capital together with a subsidiary to establish an economic organization or invest through a contract form.

Article 18. Investment Targets

1. The investment targets of the Fund are projects and enterprises whose main business sectors belong to the list of investment and loan fields issued by the Provincial People's Committee in accordance with Article 16 of this Decree.

2. Based on the list of investment and loan fields for the local development fund, the Fund selects, evaluates, decides to invest, or submits to the competent authority to decide on investment in projects and enterprises that fully meet the investment conditions stipulated in Articles 19 and 20 of this Decree.

Article 19. Establishment of Economic Organizations and Investment by Contributing Capital, Purchasing Shares, or Equity Stakes of Economic Organizations

1. The establishment of economic organizations and investment by contributing capital, purchasing shares, or equity stakes of economic organizations by the local development fund must satisfy the following conditions:

a) The investment plan, contribution, purchase of shares, or equity stakes must be assessed as effective and capable of recovering the investment capital.

b) The economic organization receiving investment or capital contribution must have its main business sector belonging to the list of investment and loan fields of the Fund issued by the Provincial People's Committee in accordance with Article 16 of this Decree.

2. The local development fund manages and transfers equity stakes at economic organizations in accordance with the laws on the management and use of state capital invested in production and business operations at enterprises.

Article 20. Investment under Contract and Implementation of Investment Projects

1. The investment projects of the Local Development Investment Fund must meet the following conditions:

a) The project is assessed to be effective and has the potential to recover the invested capital.

b) The project falls within the investment and lending sectors of the Fund as stipulated by the Provincial People's Committee according to Article 16 of this Decree.

c) The project complies with the laws on investment.

2. The Local Development Investment Fund may directly manage the investment project or establish a project enterprise to manage the investment project as provided for in Clause 1 of this Article.

3. The Local Development Investment Fund implements the investment project, transfers the investment project, suspends, stops, or terminates the operation of the investment project in accordance with the laws on investment and the laws on management and use of state capital invested in production and business at enterprises.

Article 21. Authority to Decide on Investment

1. The Local Development Investment Fund decides on the amount of capital invested in a business or the amount of capital invested in a project up to 10% of the Fund's equity as recorded in the most recent financial report at the time of making the investment decision.

2. The Provincial People's Committee decides on the amount of capital invested in a business or the amount of capital invested in a project exceeding 10% of the Fund's equity as recorded in the most recent financial report at the time of making the investment decision.

3. The authority deciding on investment as stipulated in Clauses 1 and 2 of this Article has the authority to decide on the transfer of the investment project, suspension, cessation, termination of the operation of the investment project; and the decision to transfer shares or contributions of economic organizations.

Article 22. Limitations on Investment

1. The total value of disbursed investments as stipulated in Article 19 of this Decree shall not exceed 20% of the Fund's equity as recorded in the most recent financial report at the time of disbursing the investment capital.

2. The total value of disbursed investments as stipulated in Article 20 of this Decree shall not exceed 50% of the Local Development Investment Fund's equity as recorded in the most recent financial report at the time of disbursing the investment capital.

3. For projects using international donor support funds with different investment limits from those stipulated in this Decree, implementation shall follow the agreements signed with the donors.

Section 3

LOAN ACTIVITIES

Article 23. Borrowers and Loan Conditions

1. The borrower who is eligible for loans from the Local Development Investment Fund must meet the following conditions:

a) The project belongs to the investment and lending sectors of the Local Development Investment Fund as stipulated by the Provincial People's Committee according to Article 16 of this Decree.

b) It is not a subsidiary of the Local Development Investment Fund.

c) The borrower is a legal entity with civil legal capacity as prescribed by law.

2. Loan Conditions:

a) The borrower meets the eligibility criteria for loans as stipulated in Clause 1 of this Article.

b) The loaned project is appraised and evaluated by the Local Development Investment Fund as being an effective project, and the borrower has the ability to repay the loan.

c) The loaned project complies with the laws on investment.

d) The borrower purchases insurance for assets at a legally operating insurance company in Vietnam for assets that are required to be insured.

Article 24. Loan Period

1. The local investment and development fund decides the loan period for each project based on the results of the review, the project's ability to recover capital, and the borrower's ability to repay debt, but not exceeding fifteen years.

2. In cases where the loan period exceeds the maximum loan period specified in Clause 1 of this Article, the local investment and development fund shall review and submit to the provincial People's Committee for consideration and decision.

Article 25. Loan Interest Rate

1. The minimum loan interest rate of the local investment and development fund is determined according to the principle that it must not be lower than the average deposit interest rate of all sources of capital raised, taking into account the opportunity cost of the equity capital, ensuring coverage of management costs, risk reserve costs for loans, and other costs related to lending activities.

2. Annually or during specific periods, based on the principle of determining the minimum loan interest rate stipulated in Clause 1 of this Article, the Fund Director calculates and submits to the Management Board for approval to report to the provincial People's Committee to issue a decision on the minimum loan interest rate of the local investment and development fund.

3. The local investment and development fund determines the loan interest rate for each specific project, but it must not be lower than the minimum loan interest rate decided by the provincial People's Committee as prescribed in Clause 2 of this Article.

4. For projects using international donor funds with different loan interest rates from those stipulated in this Decree, they shall be implemented according to the agreements signed with the donors.

Article 26. Loan Security

1. Depending on each specific project, the local investment and development fund considers and uses collateral measures for loans in accordance with the law on loan guarantees.

2. The Fund may dispose of collateral assets to recover debts in accordance with the law and the credit agreement signed between the local investment and development fund and the borrowing investor.

Article 27. Joint Lending Provisions

1. The Fund can act as the lead or participate in joint lending with other local investment and development funds, financial institutions, or other organizations to lend to projects.

2. The projects to be lent must fall within the scope of lending of the participating local investment and development funds, and simultaneously meet the conditions and limits for lending as stipulated in Articles 23 and 29 of this Decree.

3. Joint lending is carried out according to the contract signed by the parties, clearly stating the lending conditions, terms, authority to lend, and risk handling procedures as prescribed in this Decree.

4. The loan interest rate is decided by the participating lenders and recorded in the contract, and must not be lower than the minimum loan interest rate of each local investment and development fund as stipulated in Article 25 of this Decree.

Article 28. Authority to Decide on Lending

1. The local investment and development fund decides on projects with a value not exceeding fifteen percent of the fund's equity capital as reported in the most recent financial statement at the time of the lending decision.

2. The provincial People's Committee decides on projects with a value exceeding the limit set forth in Clause 1 of this Article, ensuring compliance with the lending limits prescribed in Article 29 of this Decree.

Article 29. Limitations on Loans

1. The limit on loans for a project at the time of disbursement shall not exceed 20% of the local development investment fund's equity capital as recorded in the most recent financial report at the time of disbursing funds.

2. The total outstanding loan balance to a customer of the local development investment fund shall not exceed 25% of the fund's equity capital as recorded in the most recent financial report at the time of disbursing funds.

3. For a project where the fund both lends and invests, the total limit on investment and lending at the time of disbursement shall not exceed 30% of the fund's equity capital as recorded in the most recent financial report at the time of disbursing funds.

4. In cases where a project uses international donor funding with different loan limits than those stipulated in this Decree, the agreement signed with the donor shall be followed.

Article 30. Classification of Debts, Establishment of Risk Reserve Funds, and Risk Management in Lending Activities

1. The local development investment fund shall classify debts, establish risk reserve funds, and manage risks in lending activities according to the laws applicable to commercial banks.

2. Situations to consider for risk management:

a) The project owner suffers financial and asset losses due to natural disasters, crop failures, epidemics, fires, political risks, or war, affecting business operations, leading to the inability to repay the loan (interest and principal) as stipulated in the loan contract.

b) The project owner goes bankrupt as defined by current laws.

c) Changes in state policies affect the project owner's business operations, leading to the inability to repay the loan (interest and principal) as stipulated in the loan contract.

d) The project owner faces risks from external factors directly impacting business operations, leading to the inability to repay the loan (interest and principal) as stipulated in the loan contract.

e) The project owner has non-performing debt based on the fund's debt classification results.

3. The local development investment fund establishes a Committee to manage risks. The risk management committee consists of one member of the fund's management board as Chair, one director of the fund, one head of the department responsible for risk management, and at least two other members appointed by the fund's management board.

4. If the risk reserve is used to manage risks, at least five years after using the risk reserve to manage risks and implementing all measures to recover the debt without success, the local development investment fund may write off the managed risk debt from its balance sheet if it can provide sufficient documentation proving that all recovery measures were taken but the debt was unrecoverable, and such action is approved by the provincial People's Committee based on the recommendation of the management board.

5. The local development investment fund develops a risk management regulation and submits it to the fund's management board for issuance after obtaining approval from the provincial People's Committee. The risk management regulation includes the following main contents: principles for managing risks; situations and measures for managing risks; procedures and documentation for using the risk reserve; risk management processes and decision-making authority for managing risks.

Article 31. Restructuring Debt Repayment Terms and Selling Debts

1. The local development investment fund shall consider and decide on restructuring debt repayment terms, including adjusting the repayment period and extending debts based on the proposal of the project investor, the financial capacity of the Fund, and the assessment results of the Fund regarding the investor's ability to repay debts. The restructuring of debt repayment terms must ensure that the loan term after restructuring complies with the provisions on loan terms set forth in Article 24 of this Decree.

2. The local development investment fund may sell debts arising from lending activities. The provincial People's Committee decides on cases where debts are sold at prices lower than their book value.

3. The restructuring of debt repayment terms and selling debts by the local development investment fund as stipulated in Clause 1 and Clause 2 of this Article shall be implemented in accordance with the regulations of the State Bank of Vietnam for credit institutions. The local development investment fund shall promulgate internal regulations specifying procedures, authority, and cases of restructuring debt repayment terms and selling debts.

Section 4

TRUST MANAGEMENT AND DELEGATION

Article 32. Accepting Delegation

1. The local development investment fund may accept delegation to manage investment capital; lend and recover debts; allocate investment capital for projects and works funded from the state budget, policy banks, domestic and foreign enterprises and organizations; accept delegation to manage capital and operations of state financial funds at the local level.

2. The acceptance of delegation by the local development investment fund shall be carried out according to the decision of the provincial People's Committee or the trust management agreement signed between the Fund and the delegating organization or individual. The decision/agreement on accepting delegation shall include the following main contents:

a) Name, address, legal status, and legal representative of the delegating party (if any) and the entrusted party (the local development investment fund).

b) Purpose of delegation; content of delegation.

c) Amount of delegated capital; duration of delegation; delegation costs.

d) Beneficiary; responsibility for assessing and supervising the delegation activities; responsibility for handling risks of the delegating party.

e) Rights and obligations of the parties; handling cases of terminating the delegation document before the expiration date; provisions on handling violations (if any).

f) Other contents agreed upon by the parties in compliance with the law.

3. The local development investment fund shall have the responsibility to separately account for delegated capital and assets formed from such capital (if any) from its operational capital and assets. Trust management activities of the Fund must ensure they do not affect other activities according to the functions and tasks of the Fund.

Article 33. Delegation

1. The local development investment fund may delegate business operations to credit institutions and policy banks. Such delegation must be carried out through a delegation document between the Fund and the receiving organization.

2. Organizations receiving delegation may be paid service fees for delegation according to the levels specified in the delegation document.

Chapter IV

FINANCIAL REGIME, ACCOUNTING, AUDITING, REPORTING, SUPERVISION, AND EVALUATION OF ACTIVITY EFFECTIVENESS

Article 34. Financial Regime, Accounting, and Auditing

1. The fiscal year of the local development investment fund starts on January 1 and ends on December 31.

2. The annual financial report of the local development investment fund must be independently audited in accordance with current laws.

3. The salary, remuneration, bonuses, and allowances system for managers and employees of the local development investment fund shall be implemented in accordance with the regulations applicable to limited liability companies wholly owned by the State and guidelines issued by the Ministry of Labor, Invalids, and Social Affairs. The ranking of the local development investment fund shall be conducted in accordance with the guidelines of the Ministry of Labor, Invalids, and Social Affairs.

4. The outcome of the local development investment fund's operations is the difference between total revenue, other income, and reasonable and legitimate expenses. After paying taxes and other payments to the state budget as prescribed by tax laws, this difference shall be distributed as follows:

a) To offset negative revenue-expenditure differences up to the settlement date.

b) To set aside 30% into the development investment fund.

c) To set aside 10% into the financial reserve fund; when the balance of the fund equals 25% of the charter capital of the local development investment fund, no further contributions will be made.

d) To set aside a maximum of three months' actual salary of employees into the reward and welfare fund; a maximum of 1.5 months' actual salary of managers into the manager bonus fund.

e) The remaining difference shall continue to be added to the development investment fund to increase the charter capital of the local development investment fund.

5. Annually, the provincial People's Committee approves the final revenue-expenditure difference report of the local development investment fund. The final revenue-expenditure difference report of the local development investment fund must be accompanied by an explanatory evaluation of the results and effectiveness of the Fund's performance as stipulated in Article 65 of the State Budget Law and any amendments, supplements, or replacements thereof (if any).

6. The local development investment fund shall implement the financial regime, accounting, and reporting system as prescribed in this Decree and guidelines issued by the Ministry of Finance.

Article 35. Capital

1. The capital of the local development investment fund includes:

a) Charter capital provided by the owner.

b) Development investment fund.

c) Other sources of capital from the owner as prescribed by law.

2. Changing the level of charter capital of the local development investment fund:

a) In cases where the level of charter capital recorded in the Decision on establishment is changed, the People's Committee of the province shall report to the Provincial People's Council for consideration and decision, ensuring the minimum capital level as stipulated in Clause 1, Article 6 of this Decree.

b) In cases where additional charter capital is supplemented from the development investment fund, the People's Committee of the province shall consider and decide.

3. The method of determining the adjusted charter capital level of the Fund shall be applied according to the provisions of law applicable to enterprises wholly owned by the State. The Ministry of Finance shall provide specific guidance on the method of determining the adjusted charter capital level of the Fund in accordance with the nature of the Fund's operations.

Article 36. Raising Capital

1. The local development investment fund may raise medium and long-term capital through the following forms:

a) Borrowing from organizations both within and outside the country in accordance with the provisions of law. Foreign borrowing shall be carried out in accordance with the provisions of law on foreign borrowing.

b) Issuing local development investment fund bonds.

c) Other forms of raising medium and long-term capital as prescribed by law.

2. The local development investment fund may accept deposits and pledges in accordance with relevant laws.

3. The total amount of capital raised by the local development investment fund as stipulated in Clause 1 and Clause 2 of this Article shall not exceed six times the capital of the Fund recorded in the annual financial statement or semi-annual financial statement at the nearest time point.

Article 37. Issuance of Local Development Investment Fund Bonds

1. The local development investment fund shall issue bonds individually in the domestic market under the principle of self-borrowing, self-repayment, and responsibility for the effectiveness of capital use and debt repayment capability.

2. Conditions for offering individual bonds of the local development investment fund:

a) The Fund has been operating for a minimum period of one year from the date the People's Committee of the province issues the Decision on establishing the Fund.

b) The Fund is evaluated and classified as having effective operations in the preceding year immediately before the issuance year in accordance with this Decree and the guidance of the Ministry of Finance.

c) Ensuring compliance with regulations on investors purchasing and trading individual corporate bonds as prescribed by law on offering individual corporate bonds.

d) Having an individual bond issuance plan approved by the People's Committee of the province, specifying the purpose of using funds from bond issuance and the source of repayment of principal and interest of the bonds when due.

đ) Paying the full principal and interest of issued bonds or paying all due amounts over three consecutive years prior to the bond issuance (if applicable), except in cases of issuing bonds to selected financial institutions.

e) Meeting the investment, lending, and capital-raising limits as prescribed in this Decree.

3. The conditions, terms of the bonds, the buyers and traders of the bonds, procedures, documents, issuance plans, issuance methods, registration, custody of the bonds, and information disclosure shall be implemented in accordance with the provisions of law on offering and trading individual corporate bonds in the domestic market.

Article 38. Entrusted Capital

The entrusted capital as prescribed in Article 32 of this Decree does not belong to the operational capital of the local investment and development fund and shall be accounted for and managed separately from the fund's operational capital.

Article 39. Safeguarding the Capital of Local Investment and Development Funds

1. The local investment and development fund shall be responsible for safeguarding and using the capital for its intended purposes, ensuring the safety of the capital and assets in accordance with this Decree; and reporting to the provincial People's Committee on changes in the fund's equity capital.

2. Safeguarding the capital shall be carried out through the following measures:

a) Managing, utilizing capital and assets, distributing revenue and expenditure differences, financial management systems, accounting systems, and auditing in accordance with this Decree and guidelines issued by the Ministry of Finance.

b) Establishing provisions for risk against lending activities as stipulated in Article 30 of this Decree and other provisions as required for enterprises. Costs for establishing provisions shall be recorded as operating expenses of the local investment and development fund.

c) Purchasing insurance for assets in accordance with the law.

d) Other measures for safeguarding capital as prescribed by law for state-owned enterprises holding 100% of the charter capital.

Article 40. Annual Operational Plan and Financial Plan

1. Based on the five-year operational plan approved by the provincial People's Committee, the local investment and development fund shall develop an annual operational plan and financial plan for submission to the Fund Management Board for review and approval by the provincial People's Committee. The annual financial plan shall include: income and expense plans, fixed asset acquisition plans.

2. The process of approving and issuing the annual plan is as follows:

a) Before July 31 each year, the Fund Management Board shall report to the provincial People's Committee on the next year's operational and financial plans.

b) Before April 30 of the planning year, the provincial People's Committee shall review and approve the annual operational and financial plans so that the local investment and development fund can implement them.

Article 41. Reporting System of Local Investment and Development Funds

1. The local investment and development fund shall establish and submit financial reports, activity reports, and disclose information in accordance with the law and guidelines issued by the Ministry of Finance.

2. The local investment and development fund shall be responsible for the accuracy and honesty of these reports.

Article 42. Supervision and Evaluation of the Effectiveness of Local Investment and Development Funds

1. The provincial People's Committee shall be responsible for comprehensively supervising and evaluating the effectiveness of the operations of local investment and development funds.

2. Annually, the local investment and development fund shall evaluate the effectiveness of its operations based on the following indicators:

a) Indicator 1: Revenue and other income.

b) Indicator 2: Revenue-expenditure difference and the rate of revenue-expenditure difference over equity capital.

c) Indicator 3: Non-performing loan ratio over total outstanding loans (including direct loans and joint loans) and the ratio of difficult-to-collect receivables over total investment capital.

d) Indicator 4: Compliance with laws on investment, management, and utilization of capital, obligations to the state budget, and regulations on financial reporting systems for financial supervision.

3. The indicators prescribed in Clause 2 of this Article shall be determined and calculated based on audited annual financial reports and periodic reports as prescribed by law. When calculating the indicators prescribed in Clause 2 of this Article, factors affecting them shall be considered and excluded:

a) Due to natural disasters, fires, epidemics, wars, and other force majeure causes.

b) Due to state policy adjustments or market fluctuations significantly impacting revenue and the operation situation of the fund.

c) Due to the fund implementing socio-economic objectives as decided by competent authorities.

d) State write-offs, deferrals, or cancellations of debts for borrowers; adjustments to the minimum lending interest rate of the fund.

4. Evaluating the effectiveness of the management of local investment and development funds based on the following criteria:

a) Results of fulfilling assigned goals and tasks.

b) Results of evaluating the effectiveness of the operations of local investment and development funds.

c) Compliance with Party policies and state laws; implementation of the Charter on organization and operation and operational regulations of local investment and development funds.

5. The Ministry of Finance shall guide methods for supervising and evaluating the effectiveness of local investment and development funds, and evaluating the effectiveness of fund managers in line with fund operations.

Chapter V

DISSOLUTION OF LOCAL INVESTMENT AND DEVELOPMENT FUNDS

Article 43. Cases for Dissolution of Local Development Investment Funds

The local development investment fund shall be dissolved if it falls under any of the following circumstances:

1. The fund has been established and operated but within three years from the date this Decree takes effect, its actual registered capital is lower than 300 billion VND.

2. The fund is assessed as not fulfilling its tasks and has a ratio of loan and investment value to equity capital (excluding entrusted loans) lower than 20% for five consecutive years.

3. The ratio of non-performing debt to total outstanding loans exceeds 50%, or the ratio of difficult-to-collect receivables to total investment capital exceeds 80%, and the cumulative difference between income and expenditure is greater than or equal to 75% of the actual registered capital of the local development investment fund for five consecutive years.

4. Other cases where the fund operates ineffectively or is deemed unnecessary to maintain according to the assessment of the provincial People's Committee.

Article 44. Liquidation Council of Local Development Investment Funds

1. The provincial People's Committee establishes a liquidation council to advise the provincial People's Committee on the dissolution plan and organization of the local development investment fund.

2. The composition of the liquidation council includes:

a) Leaders of the provincial People's Committee.

b) Representatives of leaders from the Departments of Finance, Planning and Investment, Home Affairs, and Labor, Invalids, and Social Affairs.

c) Representatives of leaders from the Branch of the State Bank of Vietnam at the locality.

d) Management Board of the Fund, Supervisory Board of the local development investment fund.

đ) Representatives of relevant agencies (if necessary) as decided by the locality.

Article 45. Dissolution Process of Local Development Investment Funds

1. The liquidation council develops a dissolution plan, reports to the provincial People's Committee for approval by the Provincial People's Council. The dissolution plan includes the following contents:

a) An independent auditor's evaluation of the current financial status and determination of the actual value of the registered capital of the local development investment fund, except when the fund has an audited financial report within six months prior to the decision to dissolve the fund.

b) A plan for asset liquidation, handling of the registered capital, ongoing loans and investments, and settlement of the fund's debts.

c) A plan for transferring entrusted items from entrusted organizations.

d) A plan for handling obligations arising from labor contracts.

đ) Provisions terminating all rights and interests of the local development investment fund.

2. After the dissolution plan is approved by the provincial People's Council, the provincial People's Committee decides to dissolve the local development investment fund, simultaneously reporting to the Ministry of Finance and announcing the dissolution through local and central mass media.

3. Within ten working days from the effective date of the dissolution decision:

a) The local development investment fund is responsible for implementing the provisions of Article 46 of this Decree.

b) The liquidation council is responsible for implementing the provisions of Article 47 of this Decree.

4. The liquidation council automatically ceases operations when the local development investment fund has completed all dissolution procedures as stipulated in this Decree and related laws.

5. The dissolution period of the local development investment fund shall not exceed two years from the effective date of the dissolution decision. In case of necessity based on practical requirements of the locality, the provincial People's Committee may decide to extend the dissolution period, but not more than one year.

Article 46. Responsibilities of the Local Development Investment Fund after the dissolution decision takes effect

1. Cease immediately all activities related to capital raising, lending, investment, and other related activities when the dissolution decision becomes effective.

2. Within ten working days from the date the dissolution decision becomes effective, the Local Development Investment Fund must carry out the following:

a) Close accounting books; inventory assets; reconcile receivables and payables; prepare financial statements up to the date the dissolution decision becomes effective.

b) Prepare a list of deposits made by the Fund at credit organizations; a list of debts payable, including raised capital; a list of borrowers and amounts of principal and interest receivable (separated into recoverable debt and non-recoverable debt); a list of investment projects, contributions to economic organizations and amounts to be recovered from these projects; a list of entrusted and received entrusted items.

c) Send a document requesting the tax authority to confirm the fulfillment of the Fund's tax obligations (if any).

3. Within thirty working days from the date the dissolution decision becomes effective, the Local Development Investment Fund must hand over to the Dissolution Council:

a) Financial statements, accounting records, and related documents concerning the Fund's dissolution; lists of loans, investments, entrusted and received entrusted items of the Fund.

b) All assets under the lawful ownership, management, and use of the Local Development Investment Fund (including unrecovered assets).

Article 47. Responsibilities of the Dissolution Council after the dissolution decision takes effect

1. Within five working days from the date the dissolution decision becomes effective, the Dissolution Council shall be responsible for:

a) Recovering the seal of the Local Development Investment Fund for the purpose of dissolution.

b) Organizing the dissolution of the Local Development Investment Fund according to the approved plan.

c) Within five working days from the end of the dissolution process, the Dissolution Council reports to the Provincial People's Committee on the results of the dissolution.

2. The Dissolution Council may use the seal of the Local Development Investment Fund to serve the dissolution work and request relevant state agencies to assist in recovering assets.

Chapter VI

RESPONSIBILITIES OF RELATED AUTHORITIES AND ORGANIZATIONS

Article 48. Responsibilities of the Provincial People's Council

1. Approve the proposal to establish the Local Development Investment Fund.

2. Decide on the organizational and operational model of the Local Development Investment Fund.

3. Approve the plan for the issuance and supplementary issuance of the registered capital of the Local Development Investment Fund from the provincial budget.

4. Approve the list of investment and lending fields of the Local Development Investment Fund ensuring compliance with the provisions of Article 15 of this Decree.

5. Implement supervision of the Local Development Investment Fund's operations in accordance with the State Budget Law and guiding documents.

6. Approve restructuring and dissolution plans for the Local Development Investment Fund based on the proposal of the Provincial People's Committee.

7. Perform other tasks as prescribed by law.

Article 49. Responsibilities of the Provincial People's Committee

1. Perform the function of representing the state ownership at the Local Development Investment Fund in accordance with this Decree and the Charter of organization and operation of the Fund.

2. Develop the proposal to establish the Local Development Investment Fund for approval by the Provincial People's Council in accordance with this Decree.

3. Decide on the establishment, restructuring, and dissolution of the Local Development Investment Fund in accordance with this Decree and relevant laws.

4. Submit to the Provincial People's Council for approval the plan for the issuance and supplementary issuance of the registered capital from the state budget; allocate sources to issue and supplement the registered capital of the Local Development Investment Fund according to the plan approved by the People's Council.

5. Approve the charter of operation of the Local Development Investment Fund or approve amendments and supplements to the charter based on the proposal of the Fund Management Board.

6. Decide on the organizational model of the Local Development Investment Fund, the number of members of the Fund Management Board.

7. Approve the organizational structure of the Local Development Investment Fund based on the proposal of the Fund Management Board.

8. Issue the list of investment and lending fields of the Local Development Investment Fund in accordance with Article 16 of this Decree after being approved by the Provincial People's Council.

9. Give consent to the risk management regulations of the Local Development Investment Fund in accordance with Article 30 of this Decree.

10. Decide on the minimum lending interest rate of the Local Development Investment Fund for each period in accordance with Article 25 of this Decree.

11. Approve investment and lending decisions within the scope of authority stipulated in this Decree.

12. Manage, inspect, and supervise comprehensively the operation and finance of the Local Development Investment Fund.

13. Approve the five-year activity plan and annual financial plan of the Local Development Investment Fund.

14. Approve the annual financial report, distribution of surplus or deficit, and establishment of reserve funds of the Local Development Investment Fund.

15. Fulfilling other tasks as prescribed by law.

Article 50. Responsibilities of the Ministry of Finance

1. Take the lead and coordinate with ministries and sectors to build and submit to the Government for issuance mechanisms and policies on the organization and operation of local development investment funds; coordinate with the State Bank of Vietnam to manage the lending activities of local development investment funds in accordance with this Decree within the scope of their assigned functions and tasks.

2. Inspect the implementation of the provisions of this Decree by local development investment funds to evaluate and improve mechanisms and policies.

3. Issue guiding documents to implement this Decree regarding financial management mechanisms, accounting systems, supervision, and evaluation of the effectiveness of operations of the Fund and the performance of the local development investment fund function by HFIC.

Article 51. Responsibilities of the State Bank of Vietnam

1. Coordinate with the Ministry of Finance to manage the lending activities of local development investment funds within the scope of their assigned functions and tasks.

2. Coordinate with the Ministry of Finance to develop policies, monitor, and assess the implementation of lending by local development investment funds.

Article 52. Responsibilities of the Ministry of Labor, Invalids, and Social Affairs

1. Implement state management functions over labor management, wages, remuneration, bonuses, ranking, and grading for local development investment funds.

2. Guide the implementation of labor management, wages, remuneration, bonuses, ranking, and grading for local development investment funds in accordance with the activities of local development investment funds as stipulated in this Decree.

Chapter VII

IMPLEMENTATION

Article 53. Effective Date

This Decree takes effect from February 5, 2021, and replaces Decree No. 138/2007/NĐ-CP dated August 28, 2007, on the organization and operation of local development investment funds, and Decree No. 37/2013/NĐ-CP dated April 22, 2013, amending and supplementing certain articles of Decree No. 138/2007/NĐ-CP dated August 28, 2007.

Article 54. Transitional Provisions

1. Loan and investment projects that have been signed before the effective date of this Decree shall continue to be implemented according to the signed contracts within the limits of loans and investments prescribed in Decree No. 138/2007/NĐ-CP and Decree No. 37/2013/NĐ-CP until the end of the contract term. In cases where these contracts are amended or supplemented, they shall be carried out in accordance with the provisions of this Decree.

2. Within six months from the effective date of this Decree, the People's Committee of each province shall issue the minimum interest rate for loans as stipulated in Article 25 of this Decree. The interest rate for loans by local development investment funds shall continue to be implemented according to the provisions of Decree No. 138/2007/NĐ-CP and Decree No. 37/2013/NĐ-CP until the People's Committee of each province issues the minimum interest rate for loans as stipulated in this Decree.

Article 55. Implementation Organization

1. For HFIC:

a) HFIC’s capital raising activities shall be carried out in accordance with the provisions of Article 36 of this Decree; however, for bond issuance and other forms of capital raising (including refinancing of ODA loans and preferential foreign loans of the Government), they shall be carried out in accordance with the laws applicable to enterprises. The total amount of capital raised by HFIC shall be applied as for local development investment funds as stipulated in Clause 3 of Article 36 of this Decree.

b) HFIC’s lending, investment, entrustment, and entrusted activities shall be carried out in accordance with this Decree and guiding documents.

c) For other activities, HFIC shall carry them out in accordance with the laws applicable to state-owned enterprises holding 100% of the charter capital and related laws.

d) HFIC shall implement financial systems, accounting, auditing, reporting, supervision, and evaluation of operational effectiveness in accordance with the laws applicable to state-owned enterprises holding 100% of the charter capital and the provisions at points a, b, and c of this clause; the Ministry of Finance shall guide the provisions of this point.

2. Ministers, heads of ministerial-level agencies, heads of government agencies, and chairpersons of provincial people's committees directly under the central government are responsible for implementing this Decree./.