Decree No. 64/2002/ND-CP On the Conversion of State-Owned Enterprises into Joint Stock Companies

DECREE

On the matter of converting state-owned enterprises into Joint Stock Companies

____________________

THE GOVERNMENT

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Pursuant to the Enterprise Law dated June 12, 1999;

Pursuant to the State Enterprise Law on April 20, 1995;

At the request of the Minister of Finance.

DECREE:

Chapter 1:

GENERAL PROVISIONS

Article 1. The objectives of converting state-owned enterprises into Joint Stock Companies (hereinafter referred to as "stock listing")

1. To significantly enhance the efficiency and competitiveness of enterprises; create a type of enterprise with multiple owners, including a large number of employees; provide strong motivation and dynamic management mechanisms for enterprises to effectively utilize state and enterprise assets.

2. To mobilize capital from the entire society, including individuals, economic organizations, domestic and foreign social organizations to invest in technological innovation and develop enterprises.

3. To promote the genuine leadership role of employees and shareholders; strengthen investor supervision over enterprises; ensure harmonious interests among the State, enterprises, investors, and employees.

Article 2. Applicability

1. This Decree applies to state-owned enterprises and their affiliated units specified in Article 1 of the Law on State-Owned Enterprises (excluding state-owned enterprises that need to continue holding 100% of the charter capital), regardless of the current business results of the enterprise. The list of state-owned enterprises is decided by the Prime Minister at each period.

2. The stock listing of affiliated units of enterprises specified in Clause 1 of this Article can only be carried out when:

a) The affiliated unit of the enterprise has the conditions to operate independently.

b) It does not cause difficulties or negative impacts on the production and business efficiency of the enterprise or other remaining parts of the enterprise.

3. Independent accounting enterprises specified in Clause 1 of this Article with state capital under 5 billion dong on accounting books, if they cannot be listed, shall implement transfer, sale, contracting, leasing operations according to the provisions of the law.

Article 3. Forms of stock listing for state-owned enterprises

1. Maintaining the existing state capital in the enterprise and issuing shares to attract additional capital.

2. Selling part of the existing state capital in the enterprise.

3. Selling all of the existing state capital in the enterprise.

4. Implementing forms 2 or 3 combined with issuing shares to attract additional capital.

Article 4. Objects and conditions for purchasing shares

The following entities have the right to purchase shares in state-owned enterprises undergoing stock listing:

a) Economic organizations, social organizations, and Vietnamese individuals residing within the country (hereinafter referred to as "domestic investors");

b) Economic organizations, social organizations, and foreign individuals, including overseas Vietnamese and foreigners residing in Vietnam (hereinafter referred to as "foreign investors").

Foreign investors wishing to purchase shares in state-owned enterprises undergoing stock listing must open accounts at service providers operating in Vietnam and comply with Vietnamese laws. All activities related to purchasing and selling shares; receiving and using dividends and other income from share purchases must be conducted through these accounts.

Article 5. Right to purchase initial shares in stock-listed enterprises

All entities specified in Clause 1 of Article 4 of this Decree have the right to purchase initial shares in state-owned enterprises undergoing stock listing without limitation, but must ensure the current regulations of the State regarding the minimum number of shareholders and the controlling stake of the State in enterprises where the State needs to hold a controlling stake.

Foreign investors may purchase shares with a total value not exceeding 30% of the charter capital of enterprises operating in industries specified by the Prime Minister.

Article 6. Shares and founding shareholders

1. Shares are certificates issued by a Joint Stock Company confirming ownership of one or more shares of a shareholder contributing capital to the company. Shares may be registered or unregistered but must contain all essential contents prescribed in Article 59 of the Enterprise Law.

The Ministry of Finance guides the unified model of share certificates for enterprises to print and manage in accordance with regulations.

2. Founding shareholders of stock-listed enterprises are those shareholders who meet the following conditions:

a) Participating in the first Charter of the Joint Stock Company.

b) Together hold at least 20% of the ordinary shares available for subscription;

c) Own the number of shares ensuring the minimum level stipulated in the Company's Articles of Association.

The number of shares of each founding shareholder and the number of founding shareholders are decided by the General Meeting of Shareholders and stipulated in the Company's Articles of Association.

Article 7. Rights and obligations of stock-listed enterprises

1. Stock-listed enterprises are responsible for arranging and utilizing the maximum number of workers present at the time of stock listing and resolving employee benefits according to current regulations.

The Joint Stock Company is responsible for inheriting all obligations towards employees transferred from state-owned enterprises; has the right to select, arrange, and use labor and cooperate with relevant agencies to resolve employee benefits according to the law.

2. The Joint Stock Company may proactively use all assets and funds already converted into shares to organize production and business; inherit all rights, obligations, and responsibilities of state-owned enterprises before stock listing and have other rights and obligations as prescribed by law.

3. Member enterprises of state-owned corporate groups undergoing stock listing where the State holds a controlling stake (over 50% of the charter capital) remain members of the corporate group.

Article 8. State protection for investors

Ownership and all legitimate rights and interests of domestic and foreign investors purchasing shares in stock-listed enterprises are protected by the State according to the law.

Chapter 2:

FINANCIAL TREATMENT AND DETERMINATION OF ENTERPRISE VALUE PRIOR TO STOCK LISTING

Article 9. Leased, borrowed, joint venture, associated assets, unused assets, assets invested with Reward Fund, Welfare Fund

Prior to implementing stock listing, enterprises must conduct inventory, classification, and actively handle according to the following provisions:

1. For assets leased, borrowed, received as joint venture contributions, associated contributions, and other assets not belonging to the enterprise: the enterprise must terminate contracts or negotiate with the asset owner so that the Joint Stock Company inherits previously signed contracts or signs new contracts.

2. For enterprise assets that are not needed, stagnant, awaiting liquidation: the enterprise shall liquidate, sell off, or report to the competent authority to transfer to another unit according to current regulations. In cases where handling has not been completed by the time of stock listing, such assets will not be included in the enterprise's value and will be entrusted to the Joint Stock Company for continued preservation, handling, or transfer to state organizations with the function of receiving and resolving.

3. As for assets belonging to welfare facilities: kindergartens, health clinics, and other welfare assets invested with funds from the Reward Fund and Welfare Fund, they shall be transferred to the collective of workers in the joint-stock company for management and use through the trade union organization.

Specifically, housing for officials, employees, including housing funded by state budget capital, shall be transferred to local land management agencies for management or sold to current users according to existing regulations.

4. For assets currently used in production and business operations invested with funds from the Reward Fund and Welfare Fund of the enterprise, their value shall be included in the value of the enterprise being corporatized and converted into shares owned by the workers in the enterprise at the time of corporatization based on the actual working time of each individual at the enterprise.

Article 10. Debts due for collection

The enterprise has the responsibility to reconcile, confirm, recover, and handle receivables before corporatization according to the current mechanism. In cases where there are still difficult-to-collect receivables at the time of corporatization, they shall be handled as follows:

1. For receivables that have sufficient evidence showing they are unrecoverable and cannot be attributed to any individual or organization's responsibility, they shall be covered by reserve funds; if insufficient, the difference shall be deducted from the operating results, reducing profits at the time of corporatization. If the above sources are insufficient to cover the shortfall, the difference shall be deducted from the state capital in the enterprise prior to corporatization.

2. For receivables that are unrecoverable due to subjective reasons and whose responsibilities have been identified, individual and organizational liabilities shall be processed for compensation. The loss after recovery shall be handled as stipulated in Clause 1 of this Article.

3. For overdue receivables that have exceeded three years, where the debtor still exists but lacks the ability to repay, and the enterprise has applied various measures without success, they shall be handled as stipulated in Clause 1 of this Article.

4. For other overdue receivables, the enterprise may sell them to economic organizations with the function of buying and selling debts. Losses from debt sales shall be handled as stipulated in Clause 1 of this Article.

Article 11. Debts due for payment

1. The enterprise must mobilize resources to settle due debts before implementing corporatization or negotiate with creditors to process or convert debts into share contributions.

The conversion of debts into share contributions shall be determined through the auction results of selling shares or through negotiation between the enterprise and the creditor, but not lower than the price of selling shares to other entities outside the enterprise.

2. In cases where the enterprise faces difficulties in settling overdue debts, they shall be handled as follows:

a) For tax debts and budget debts: the enterprise is allowed to write off, defer, or cancel debts or receive investment capital support according to government regulations;

b) For overdue commercial bank loans: the enterprise negotiates with the lending bank to defer, write off, cancel, reduce interest rates, or convert loan capital into share contributions.

Commercial banks have the responsibility to handle overdue debts according to current regulations;

c) For foreign debts with guarantees, the guarantor and the enterprise must negotiate with the creditor to write off, defer, reduce debts, and arrange sources to repay the debt. If no agreement can be reached, the guarantor must repay the debt to the creditor. The enterprise is responsible for repaying the guarantor or negotiating with the guarantor to convert it into share contributions in the joint-stock company;

d) For foreign debts self-borrowed by the enterprise without guarantees, the enterprise is responsible for arranging sources to settle the debt or negotiating with the creditor to process or convert the debt into share contributions in the joint-stock company according to the law.

Article 12. Reserve funds and undistributed profits

Reserve funds for inventory write-downs, difficult-to-collect receivables, securities write-downs, exchange rate differences, unemployment benefits reserves, financial reserves, etc., and undistributed profits must be handled according to current regulations before determining the value of the corporatized enterprise. If the enterprise has accumulated losses from previous years, pre-tax income up to the time of corporatization can be used to offset these losses before implementing the measures stipulated in points a and b of Clause 2 of Article 11 of this Decree.

Article 13. Capital contributions to foreign joint ventures

1. In cases where the corporatized enterprise inherits joint venture activities, the entire capital of the enterprise contributed to the joint venture shall be determined according to the principles stipulated in Article 18 of this Decree to determine the value of the corporatized enterprise.

2. In cases where the corporatized enterprises do not inherit joint venture activities, they shall report to the competent authority to handle the capital contributions to the joint venture as follows:

a) Negotiate to buy or sell back joint venture capital contributions;

b) Transferring to another enterprise as a partner.

Article 14. Balance of Reward Fund and Welfare Fund

The surplus balance of the Reward Fund and Welfare Fund shall be distributed to employees currently working at the enterprise to purchase shares. Employees are not required to pay income tax on this income.

Article 15. Actual value of the corporatized enterprise

1. The actual value of the enterprise is the total value of all current assets of the enterprise at the time of corporatization, taking into account the profitability of the enterprise that both buyers and sellers of shares accept. The actual value of state capital in the enterprise is the actual value of the enterprise after deducting receivables and the balance of the Reward Fund and Welfare Fund.

2. The actual value of the corporatized enterprise does not include:

a) The value of assets specified in Clause 1 of Article 9 of this Decree;

b) The value of unused assets awaiting liquidation;

c) Receivables that have been deducted from the enterprise value;

d) Construction-in-progress costs of projects suspended before the valuation date of the enterprise;

đ) Long-term investments in other enterprises decided by the competent authority to transfer to other partners;

e) Assets belonging to welfare facilities invested with funds from the Reward Fund and Welfare Fund of the enterprise and housing for officials and employees within the enterprise.

Article 16. Basis for determining the actual value of the enterprise

1. Accounting records of the enterprise at the time of corporatization.

2. Quantity and quality of assets according to the actual asset inventory classification of the enterprise at the time of corporatization.

3. Technical features of the asset, usage needs, and market price at the time of shareholding conversion.

4. Value of land use rights, business advantages of the enterprise regarding geographical location, reputation, product monopoly, design, brand (if any).

5. Profitability of the enterprise determined based on the return on equity of the enterprise.

Article 17. Determining the quality of assets, value of land use rights, and value of business advantages of the enterprise.

1. The quality of the enterprise's assets is determined based on the ability to ensure safety in operation and use of assets; ensure product quality and environment.

2. Value of land use rights:

a) For now, continue to apply the policy of land leasing and allocation according to current regulations.

The People's Committee of provinces and centrally governed cities shall be responsible for recalculating the land lease prices at advantageous locations to apply uniformly to all types of enterprises;

b) As for the area of land allocated by the State for the enterprise to operate housing and infrastructure, the value of land use rights must be included in the value of the enterprise being converted into a joint-stock company. The aforementioned value of land use rights is determined according to the framework of land transfer prices set by the competent authority and not lower than the costs already invested such as compensation, clearance, leveling of the ground surface...

3. The value of business advantages of the enterprise is determined based on the post-tax profit margin on state capital in the enterprise averaged over the three years immediately preceding the shareholding conversion compared to the interest rate of government bonds with a ten-year term at the nearest point in time multiplied by the value of state capital in the enterprise at the valuation date.

If the enterprise has a brand recognized by the market, it is determined based on the market.

Article 18. Determining the value of contributed assets in joint ventures

1. The value of contributed assets in joint ventures included in the value of the enterprise being converted into a joint-stock company is determined based on:

a) The value of shareholders' equity reflected in the financial statements of the joint venture company at the closest date to the valuation date of the enterprise being converted into a joint-stock company, which has been audited by an independent auditing organization;

b) The proportion of the contribution of the enterprise being converted into a joint-stock company to the joint venture;

c) The exchange rate between the foreign currency contributed and the Vietnamese dong based on the average inter-bank foreign exchange trading rate published by the State Bank of Vietnam at the valuation date for joint venture companies that record their accounts in foreign currencies.

2. The value of contributed assets in joint ventures determined based on the above criteria serves as the basis for determining the value of the enterprise being converted into a joint-stock company; the value of joint venture contributions on investment permits will not be adjusted.

Article 19. Method for determining the value of the enterprise

Depending on the characteristics of the industry and specific conditions of each enterprise, different methods may be applied to determine the value of the enterprise being converted into a joint-stock company according to the guidelines of the Ministry of Finance.

Article 20. Organization for determining the value of the enterprise being converted into a joint-stock company

1. The authority deciding the conversion of the enterprise into a joint-stock company decides to establish a Board to determine the value of the enterprise being converted into a joint-stock company or selects an auditing company or an economic organization with valuation functions for the enterprise being converted into a joint-stock company to sign a contract to determine the value of the enterprise.

2. The composition of the Board to determine the value of the enterprise includes:

a) A representative from the authority deciding the conversion of the enterprise into a joint-stock company serving as the Chairman of the Board;

b) A representative from the finance department;

c) Leaders of the enterprise being converted into a joint-stock company and representatives of state-owned corporations (if the enterprise is a member of a corporation).

Based on the actual situation of the enterprise and specific requirements, the Board may invite additional organizations or technical, economic, and financial experts inside and outside the enterprise necessary for evaluating the quality and determining the actual value of each type of asset within the enterprise.

3. The Board to determine the value of the enterprise is responsible for:

a) Reviewing the results of inventory, classification, evaluation of assets, and determination of the value of the enterprise being converted into a joint-stock company according to current regulations within fifteen days from the date of the Decision establishing the Board. The review results of the Board are recorded in a protocol, signed by all official members;

b) Re-evaluating the enterprise value if requested by the authority deciding the conversion of the enterprise into a joint-stock company.

The Board to determine the value of the enterprise is responsible for the accuracy of the determined enterprise value.

4. Auditing companies and economic organizations implementing the determination of the enterprise value must comply with current regulations and complete within the agreed timeframe; they must be responsible for the accuracy and legality of the valuation results. The cost of determining the enterprise value is included in the enterprise's shareholding conversion expenses.

5. The results of determining the enterprise value must be submitted to the authority deciding the conversion of the enterprise into a joint-stock company for decision and announcement.

Article 21. Utilizing the result of determining the enterprise's value

The results of determining the enterprise value according to the provisions of this Decree serve as the basis for determining the initial share structure, implementing preferential policies for employees in the enterprise, producers, and suppliers of raw materials, and setting the minimum selling price for organizing the sale of shares to external entities.

Article 22. Adjusting the value of the enterprise to be equitized

The authority deciding the conversion of the enterprise into a joint-stock company shall consider and decide on adjustments to the enterprise value in the following cases:

1. The enterprise encounters difficulties in selling shares as stipulated in Clause 5, Article 24 of this Decree.

2. Recalculating the enterprise value from the valuation date to the date when the enterprise officially becomes a joint-stock company.

Chapter 3:

SALE OF SHARES AND MANAGEMENT AND USE OF FUNDS FROM THE SALE OF STATE CAPITAL IN JOINT-STOCK ENTERPRISES

Article 23. Determination of the Initial Share Structure

The initial share structure of the enterprise being converted into a joint-stock company is determined in the following order:

1. Retaining the number of state shares in enterprises where the State needs to hold shares.

2. Allocating shares for sale at preferential prices to employees in the enterprise according to the provisions of Clauses 1 and 2, Article 27 of this Decree.

3. Reserve shares to be sold at preferential prices for producers and suppliers of raw materials in processing enterprises dealing with agricultural, forestry, and aquatic products as stipulated in Clause 1, Article 29 of this Decree.

4. Reserve a minimum of 30% of the remaining shares (if any) for sale to non-enterprise entities, prioritizing those with potential in technology, market, capital, and management experience.

Article 24. Initial Public Offering of Shares

1. Shares shall be publicly offered at the enterprise undergoing shareholding reform or through intermediary financial organizations according to the initial share structure approved by the competent authority in the restructuring plan. Among which:

a) The sale of shares and the implementation of preferential policies on share prices for employees within the enterprise and producers and suppliers of raw materials by the enterprise undergoing shareholding reform shall be handled by the enterprise.

b) The sale of shares to non-enterprise entities shall be conducted through intermediary financial organizations selected by the authority deciding on the shareholding reform of the enterprise, carried out through public auction or underwritten issuance in accordance with the guidelines of the Ministry of Finance.

If the enterprise undergoing shareholding reform has a low number of shares sold externally or faces difficulties and high costs in selling through intermediary financial organizations, the authority deciding on the shareholding reform shall organize the sale of external shares through public auction.

2. Financial organizations chosen to sell the initial shares of enterprises undergoing shareholding reform must publicly announce at least 30 days before the sale regarding the time, location, form, conditions for participation, the expected number of shares to be sold, and other related matters concerning the sale of shares.

3. The sale of shares to domestic and foreign investors shall be uniformly conducted in Vietnamese dong. In cases where purchases are made in foreign currency, they must be converted into Vietnamese dong in accordance with Vietnam's foreign exchange management regulations.

The sale of shares at preferential prices for producers and suppliers of raw materials in processing enterprises dealing with agricultural, forestry, and aquatic products shall be implemented in accordance with the Prime Minister's regulations.

In cases where participating bidders offer the same price, investors with potential in technology, market, capital, management experience, and entities converting debt into shares shall be given priority in purchasing shares. Foreign investors unable to directly participate in auctions may negotiate purchase prices with the seller, which must not be lower than the prices offered to domestic investors and must comply with the conditions set forth in Clause 2, Article 4 and Article 5 of this Decree.

4. Enterprises undergoing shareholding reform with financial conditions suitable for listing on the stock market must ensure that their share sale plans meet the conditions for listing on the stock market after becoming joint-stock companies.

5. After 60 days from the date of approval of the shareholding reform plan, if the expected number of shares to be sold within the enterprise has not been fully sold (including shares sold at preferential prices for employees and producers and suppliers of raw materials), the competent authority deciding on the shareholding reform shall decide to widely sell the remaining shares outside the enterprise.

If, after applying the above measures for 30 days, the remaining shares have still not been sold, the authority deciding on the shareholding reform shall adjust the enterprise value and the share sale plan to convert the state-owned enterprise into a joint-stock company.

Article 25. Management and Utilization of Proceeds from Share Sales

1. Proceeds from the sale of state-owned shares in state-owned enterprises undergoing shareholding reform, after deducting restructuring costs, shall be transferred to:

a) The Central Fund for Supporting Enterprise Restructuring and Shareholding Reform for the case of full shareholding reform of an enterprise or an independent unit subordinate to a ministry, agency equivalent to a ministry, or government agency;

b) The Provincial Fund for Supporting Enterprise Restructuring and Shareholding Reform for the case of full shareholding reform of an enterprise or an independent unit subordinate to a provincial-level city directly under the central government;

c) The State-Owned Corporation Fund for Supporting Enterprise Restructuring and Shareholding Reform for the case of shareholding reform of a dependent unit or a wholly-owned subsidiary of a state corporation.

2. Proceeds from the sale of state-owned shares in enterprises undergoing shareholding reform shall be used in the following order of priority:

a) To support enterprises in paying severance benefits to employees who lose their jobs at the time of shareholding reform;

b) To support enterprises in paying severance benefits to employees who lose their jobs after transferring from state-owned enterprises to work at joint-stock companies as stipulated in Clause 6, Article 27 of this Decree;

c) To support enterprises in retraining redundant labor at the time of shareholding reform to arrange new employment in joint-stock companies;

d) To invest in enterprises that have undergone shareholding reform to ensure the state's controlling stake in types of enterprises that the state must hold a controlling stake in;

đ) To provide capital assistance to state-owned enterprises facing difficulties in payment capacity before shareholding reform to handle overdue debts and social insurance debts;

e) To settle debts of enterprises when the proceeds from the state's sale of enterprises are insufficient to cover such debts;

g) To provide capital assistance to state-owned enterprises for technological innovation, enhancing competitiveness, and developing enterprises.

Chapter 4:

POLICIES FOR ENTERPRISES AND EMPLOYEES IN SHAREHOLDING REFORM

Article 26. Policies for enterprises undergoing shareholding reform

1. Enjoy tax incentives as provided for in the Law on Encouraging Domestic Investment for newly established enterprises without having to go through the process of obtaining investment preference certificates.

2. Be exempted from stamp duty for the transfer of assets under the management and use of state-owned enterprises undergoing shareholding reform to become the property of joint-stock companies.

3. Shall continue to operate the business sectors registered and be exempted from the fee for issuing the business registration certificate when transferring from state-owned enterprises to joint-stock companies.

4. Shall maintain housing and building lease contracts with state agencies and other enterprises or shall be given priority to purchase at market prices at the time of shareholding reform to stabilize production and business activities.

5. Shall enjoy land use rights according to the provisions of the Land Law in cases where the value of the enterprise undergoing shareholding reform already includes the value of land use rights.

6. Shall continue to borrow capital from commercial banks, financial companies, and other credit organizations of the State under mechanisms and interest rates applicable to state-owned enterprises.

7. Shall maintain and develop welfare funds in the form of tangible assets such as cultural facilities, clubs, clinics, convalescent homes, kindergartens to ensure welfare for workers in joint-stock companies. These assets belong to the collective ownership of workers managed by the joint-stock company with the participation of trade unions.

8. Shall deduct actual, reasonable, and necessary expenses for the process of converting state-owned enterprises into joint-stock companies (including consulting fees and valuation fees) from the proceeds of selling state-owned shares according to the level prescribed by the Ministry of Finance; in cases of shareholding reform as stipulated in Clause 1, Article 3 of this Decree, the deduction shall be made from the existing state-owned capital at the enterprise.

Article 27. Policies for workers in shareholding enterprises

1. Workers listed on the regular staff list of the shareholding enterprise at the time of the decision to implement shareholding reform shall be sold up to 10 shares annually for each year worked in the state sector by the State at a reduced price of 30% below the initial face value. The value of one share is 100,000 VND.

In cases of shareholding reform as stipulated in Clause 1, Article 3 of this Decree, the preferential value for workers in the enterprise shall be deducted from the existing state-owned capital at the enterprise.

The total preferential value, including the preferential value for producers and suppliers of raw materials, shall not exceed the value of the state-owned capital at the enterprise after deducting the value of state-held shares.

Workers who own shares purchased at a preferential price shall have the right to inherit and other shareholder rights as provided by law and the Articles of Association of the joint-stock company. Shares of this type are registered shares and may only be transferred three years after purchase. In special cases requiring the transfer of these shares before the above period, approval from the Board of Directors of the company is required. The joint-stock company shall prioritize repurchasing at market prices at the time of sale.

2. Poor workers in shareholding enterprises shall be able to purchase shares on credit at a preferential price, with payment deferred for the first three years and gradually paid off over the following seven years without interest. The number of shares purchased on credit for poor workers shall not exceed 20% of the total number of shares sold by the State at a preferential price for workers in the enterprise. Shares of this type are registered shares. Shareholders of these shares may only transfer them three years after purchase and after fully repaying the debt to the State.

3. Workers who transfer to work at joint-stock companies shall continue to participate and enjoy social insurance benefits according to current regulations.

4. Workers who have met the conditions to receive retirement benefits at the time of shareholding reform shall be granted benefits according to current regulations.

5. Workers who lose their jobs or resign at the time of shareholding reform shall be compensated for job loss and resignation according to the law.

6. After state-owned enterprises are converted into joint-stock companies, if restructuring business operations or changing technology leads to workers losing their jobs or resigning, including voluntary resignations, they shall be handled as follows:

a) Within twelve months from the date the joint-stock company is issued a business registration certificate, if workers lose their jobs due to restructuring and fall within the category eligible for policies for surplus labor from the reorganization of state-owned enterprises according to Government Decree No. 41/2002/NĐ-CP dated April 11, 2002, they shall be supported by the Fund for Surplus Labor.

Other workers who lose their jobs or resign shall receive job loss and resignation compensation according to current labor laws and shall be supported by the Fund for Reorganization and Shareholding Reform of State-Owned Enterprises.

b) If workers lose their jobs or resign in the four years following that period, the joint-stock company shall be responsible for paying 50% of the total compensation amount as stipulated by the Labor Code, with the remaining portion being paid by the Fund for Reorganization and Shareholding Reform of State-Owned Enterprises. After the expiration of this period, the joint-stock company shall be responsible for paying the full compensation to the workers.

7. For surplus workers at the time of shareholding reform who need to be trained or retrained for new positions in the joint-stock company, the State shall support part of the training costs for the joint-stock company from the Fund for Reorganization and Shareholding Reform of State-Owned Enterprises according to the guidance of the Ministry of Finance.

Chapter 5:

RIGHTS AND OBLIGATIONS OF FOREIGN INVESTORS AND PRODUCERS AND SUPPLIERS OF RAW MATERIALS FOR AGRICULTURAL, FORESTRY, AND FISHERY ENTERPRISES

Article 28. Rights and obligations of foreign investors

1. Shall have the right to participate in managing the joint-stock company according to the law and the Articles of Association of the joint-stock company.

2. Shall be entitled to pledge shares in credit relationships in Vietnam.

3. Shall be allowed to convert dividends and proceeds from share transfers in Vietnam into foreign currency for transfer abroad after fulfilling all tax obligations as prescribed by law.

In cases where foreign investors use dividends received for reinvestment in Vietnam, they shall enjoy incentives as prescribed by the Law on Encouraging Domestic Investment.

4. Has the right to participate in transactions on the Vietnamese securities market and is obligated to comply with the regulations of the Vietnamese Government regarding the participation of foreign entities in the Vietnamese securities market after the joint-stock company has been listed on the securities market.

5. Has other rights and obligations as prescribed by Vietnamese law and the Articles of Organization and Operation of the Joint-Stock Company.

Article 29. Rights and Obligations of Producers and Suppliers of Raw Materials for Processing Enterprises in Agriculture, Forestry, and Fisheries

1. Has the right to purchase shares, including preferential-priced shares at enterprises that have supplied raw materials at a 30% discount from the original par value. The total value of preferential shares shall not exceed 10% of the state capital value at the enterprise. These share certificates are registered shares subject to conditional transfer as stipulated for the transfer of preferential-priced shares of employees in joint-stock companies.

2. Shall be entitled to pledge shares in credit relationships in Vietnam.

3. Is responsible for supplying raw materials to the enterprise according to the signed contracts.

4. Has other rights and obligations as prescribed by law and the Articles of Organization and Operation of the Joint-Stock Company.

Chapter 6:

IMPLEMENTATION

Article 30. Authorities and Responsibilities of Ministries, Provincial People's Committees under the Central Government, and the Board of Directors of State-Owned Corporations

1. Ministers, Heads of Ministries equivalent to Ministries, Heads of Government Agencies, Chairmen of Provincial People's Committees under the Central Government, and the Board of Directors of State-Owned Corporation 91 are responsible for developing comprehensive plans for the restructuring of state-owned enterprises within their jurisdiction, submitting them to the Prime Minister for approval, and organizing their implementation. In case these plans are not implemented as approved, the heads of enterprise management agencies must bear disciplinary actions as provided by current regulations.

2. Based on the approved restructuring plan for state-owned enterprises by the Prime Minister:

a) The Board of Directors of State-Owned Corporations directs the development of plans for the conversion of member enterprises into joint-stock companies, reports to the Minister of the relevant economic sector or the Chairman of the Provincial People's Committee under the Central Government for decision-making.

b) Ministers, Heads of Ministries equivalent to Ministries, Heads of Government Agencies, and Chairmen of Provincial People's Committees under the Central Government decide on the conversion of enterprises under their jurisdiction into joint-stock companies, organize the determination of enterprise value; approve plans for converting state-owned enterprises into joint-stock companies according to the guidelines of related agencies. For joint-stock companies where the State needs to retain special shares, they must be reported to the Prime Minister for decision-making.

3. Ministers, Heads of Ministries equivalent to Ministries, Heads of Government Agencies, and Chairmen of Provincial People's Committees under the Central Government decide on the enterprise value or adjust the enterprise value. If the actual state capital value at the enterprise is less than the book value recorded in accounting books by VND 500 million or more, it must be approved in writing by the Minister of Finance before making the decision.

4. Documents determining the enterprise value, plans for converting state-owned enterprises into joint-stock companies, and related documents on the conversion of enterprises into joint-stock companies by Ministries, Ministries equivalent to Ministries, Government Agencies, Provincial People's Committees under the Central Government, and State-Owned Corporations must be submitted to the Steering Committee for Enterprise Reform and Development and the Ministry of Finance for monitoring, consolidation, and reporting to the Prime Minister.

5. The Steering Committee for Enterprise Reform and Development and the Ministry of Finance are responsible for assisting the Prime Minister in directing, inspecting, supervising, and urging Ministries, Ministries equivalent to Ministries, Government Agencies, Provincial People's Committees under the Central Government, and State-Owned Corporations to implement the conversion of enterprises into joint-stock companies according to the provisions of the law and the approved restructuring plans for state-owned enterprises.

Article 31. Business Registration of Joint-Stock Companies

After selling shares and holding a Shareholders' Meeting in accordance with the Law on Enterprises, state-owned enterprises must register business operations in accordance with Decree No. 02/2000/ND-CP dated February 3, 2000, of the Government on business registration and operation under the Law on Enterprises from the date of issuance of the business registration certificate.

Article 32. Management of State Capital in Joint-Stock Companies

1. State capital in joint-stock companies is managed in accordance with Decree No. 73/2000/ND-CP dated December 6, 2000, of the Government on the Regulations on Managing State Capital in Enterprises. Employees working in state-owned enterprises up to the time of conversion into joint-stock companies are directly assigned to manage state capital in joint-stock companies and have the right to purchase shares like other employees in the enterprise.

2. For joint-stock companies converted without the State holding controlling or special shares, the agency representing the owner of state capital in joint-stock companies has the right to decide on the sale of additional state-owned shares in joint-stock companies three years after the joint-stock company begins operating under the Law on Enterprises.

Article 33. Ministries, Ministries equivalent to Ministries, Government Agencies, Provincial People's Committees under the Central Government are responsible for resolving difficulties for converted joint-stock companies within their authority within a maximum period of 15 days from the date of receipt of complete files. In cases exceeding their authority, they must promptly report to the Prime Minister for consideration and decision.

Chapter 7:

IMPLEMENTING PROVISIONS

Article 34. This Decree replaces Decree No. 44/1998/ND-CP dated June 29, 1998, of the Government and takes effect 15 days after its signing. Previous regulations on conversion into joint-stock companies that conflict with this Decree are no longer effective.

Article 35. The Ministry of Finance, the Ministry of Labor, Invalids and Social Affairs, the State Bank of Vietnam, the Securities Commission, the Land Administration General Department, and other related ministries and agencies are responsible for guiding the implementation of this Decree.

Article 36. The Ministers, Heads of ministerial-level agencies, Heads of government agencies, Chairpersons of provincial People's Committees under the central government, and the Board of Directors of State Corporation 91 are responsible for implementing this Decree.