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THE
MINISTRY OF PLANNING AND INVESTMENT
THE MINISTRY OF FINANCE
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SOCIALIST
REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
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No:
08/2003/TTLT-BKH-BTC
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Hanoi,
December 29, 2003
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JOINT CIRCULAR
GUIDING THE
IMPLEMENTATION OF A NUMBER OF PROVISIONS OF THE GOVERNMENT'S DECREE No.
38/2003/ND-CP OF APRIL 15, 2003 ON TRANSFORMING A NUMBER OF FOREIGN-INVESTED
ENTERPRISES TO OPERATE IN THE FORM OF JOINT-STOCK COMPANY
Pursuant to the Government' Decree No.
38/2003/ND-CP of April 15, 2003 on transforming a number of
foreign-invested enterprises to operate in the form of joint-stock company;
Pursuant to the Government's Decree No. 61/2003/ND-CP of June 6, 2003
prescribing the functions, tasks, powers and organizational structure of the
Ministry of Planning and Investment;
Pursuant to the Government's Decree No. 77/2003/ND-CP of July 1, 2003
prescribing the functions, tasks, powers and organizational structure of the
Ministry of Finance;
The Ministry of Planning and Investment and the Ministry of Finance hereby
jointly guide a number of provisions of the Government's Decree No.
38/2003/ND-CP of April 15, 2003 on transforming a number of foreign-invested
enterprises to operate in the form of joint-stock company as follows:
Article 1.- Application
subjects
Foreign-invested enterprises (hereinafter
referred collectively to as enterprises) which meet the conditions prescribed
in Article 7 of the Government's Decree No. 38/2003/ND-CP of April 15, 2003 on
transforming a number of foreign-invested enterprises to operate in the form of
joint-stock company (hereinafter called the Government's Decree No.
38/2003/ND-CP for short) shall be considered for transformation into
joint-stock companies; particularly, the following enterprises shall not be
considered for transformation yet:
a/ Enterprises where foreign parties or the
parties to joint ventures (for joint-venture enterprises) or foreign investors
(for enterprises with 100% foreign capital) have pledged to transfer their
properties without indemnities to the Vietnamese State and Vietnamese parties.
b/ Enterprises with prepaid revenues such as
enterprises engaged in the commercial operation of infrastructures in
industrial parks, export-processing zones and/or new urban quarters;
construction of houses for sale or lease with prepaid rentals; construction of
office buildings and apartments for lease with prepaid rentals; golf-courses;
services with sale of membership cards; sub-lease of land with prepaid rentals'
c/ Enterprises making investments in forms of
BT, BOT or BTO.
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e/ Enterprises having the accumulative loss amounts
at the time of application for the transformation (after being offset by
profits of the fiscal year preceding the transformation year) equal to or
bigger than the owners' equities.
f/ Enterprises having receivable bad debts at
the time of application for the transformation exceeding the owners' equities.
Article 2.- Forms of
transformation
Enterprises shall be transformed in the forms
prescribed in Article 4 of Decree No. 38/2003/ND-CP, including:
1. "Keeping intact the enterprises' value
and investor(s)", applicable to enterprises:
a/ Having the number of investors at the time of
application for the transformation, which satisfies the requirement on the
minimum number of shareholders prescribed for joint-stock companies;
b/ The investors shall not transfer their
contributed capital to new shareholders;
c/ Mobilizing no more charter capital.
Investors defined in Decree No. 38/2003/ND-CP
and Clause 1 of this Article are foreign parties and Vietnamese parties to
joint-venture enterprises and foreign investors in enterprises with 100%
foreign capital defined in the investment licenses or the enterprises'
charters.
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2. "Transferring part of the enterprises'
value to new shareholders", applicable to enterprises:
a/ Having to add new shareholders in order to
satisfy the requirement on the minimum number of shareholders prescribed for
joint-stock companies or wishing to add new shareholders, and
b/ Mobilizing no more charter capital.
The share-holding proportion between founding
shareholders shall be determined according to agreements thereon and stipulated
in the joint-stock companies' charters.
3. "Keeping intact the enterprises' value
or transferring part of their capital and issuing more shares to attract
investment capital", applicable to enterprises:
a/ Wishing to increase their charter capital,
b/ Wishing to mobilize more capital and increase
the number of shareholders.
The share-holding proportion of new founding
shareholders shall be determined according to agreements thereon and stipulated
in the joint-stock companies' charters.
For cases of transformation stated in Clauses 1,
2 and 3 of this Article, the joint-stock companies must satisfy the provisions
of Clause 1, Article 10 and Clause 3, Article 12 of Decree No. 38/2003/ND-CP.
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1. The enterprises' value for transformation is
the whole value of existing properties inscribed in the enterprises' records
already audited independently within 6 months before the time of submitting the
dossiers of application for the transformation.
2. The value of investors' capital before
transformation is the whole value of existing properties inscribed in the
enterprises' records already audited by independent audit companies within 6 months
before the time of submitting the dossiers of application for the
transformation after subtracting payable debts.
3. The time for evaluation of enterprises is the
time when the financial statements have already been audited.
4. In the course of determining the enterprises'
value, the inventory and classification of properties, receivable debts and
payable debts must comply with the current regulations on finance, accounting
and tax management.
The value of deficit, lost, damaged or unusable
properties (if any) shall be deducted into the enterprises' value for
transformation after subtracting compensations paid for personal
responsibility.
The value of surplus properties (if any) shall
be accounted into the enterprises' value for transformation.
For receivable debts, if there are enough
grounds to determine that such debts are irrecoverable at the time of
determining the enterprises' value, such debts shall be accounted into
enterprises' costs.
For payable debts, if there are enough grounds
to believe that the creditors have waived their right to such debts at the time
of determining the enterprises' value, such debts shall be accounted into
enterprises' incomes.
5. For joint-venture enterprises where the
Vietnamese parties are allowed to use the land use right value for capital
contribution to the joint ventures, if such Vietnamese parties are State
enterprises, the procedures for recording capital contributed to the joint
ventures with the land use right value under the Finance Ministry's guidance
must be completed.
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Article 4.- Dossiers of
application for transformation
1. The dossiers of application for
transformation shall be compiled according to Articles 20 and 21 of Decree No.
38/2003/ND-CP.
2. The dossiers of application for the
transformation must also include the written detailed explanation in the
following cases:
a/ Enterprises add new founding shareholders.
b/ Enterprises have the profit-distributing
percentages prescribed in the investment licenses different from the legal
capital-contributing proportions of the involved parties.
c/ Enterprises sell equities to their laborers.
d/ Enterprises issue additional shares in order
to mobilize more charter capital.
Article 5.- Order and
procedures for the enterprise transformation
1. Enterprises which meet the transformation
conditions prescribed in Article 1 of this Circular shall send the dossiers of
application for transformation to the Ministry of Planning and Investment
before March 25, 2004 for consideration and selection of enterprises to be
transformed before May 25, 2004.
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a/ Within 3 working days after receiving the
valid dossiers, the Ministry of Planning and Investment shall send dossiers to
the concerned ministries and branches for the latter's opinions.
b/ Within 15 working days after receiving the
valid dossiers, the concerned ministries and branches shall send to the
Ministry of Planning and Investment their written opinions on enterprises'
application for the transformation; past such time limit, if they do not send
their written opinions, they shall be considered as having approved
enterprises' application for the transformation.
c/ Within 30 working days after receiving the
valid dossiers, the Ministry of Planning and Investment shall submit its
appraising opinions to the Prime Minister.
d/ Within 5 days after receiving the Prime
Minister's decisions, the Ministry of Planning and Investment shall notify such
in writing to the enterprises applying for the transformation.
3. Within 6 months after receiving the Planning
and Investment Ministry's written notices on the approval of the enterprise
transformation, the enterprises shall carry out transformation procedures
prescribed in Article 23 of Decree No. 38/2003/ND-CP and report the results
thereof to the Ministry of Planning and Investment for granting the adjusted
investment licenses approving the enterprise transformation.
Past such time limit, if the enterprises have
not yet completed the transformation procedures prescribed in Article 23 of
Decree No. 38/2003/ND-CP, they shall have to report such to the Ministry of
Planning and Investment for consideration and decision. In cases where the
enterprises fail to report thereon, they shall be considered as not having the
need for transformation. The Ministry of Planning and Investment shall cease
the consideration of enterprises' application for the transformation.
4. Within 7 working days after receiving the
enterprises' reports on the transformation results, the Ministry of Planning
and Investment shall consider and approve the transformation of enterprises
into joint-stock companies in the form of adjusted investment licenses.
The above-mentioned time limit shall not include
the duration for the enterprises to amend and supplement the dossiers of
application for the transformation.
All requests of the Ministry of Planning and
Investment for the amendment and supplementation of the dossiers of application
for the transformation shall be made in writing within 15 days after receiving
the valid dossiers.
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Article 6.- Enterprise
income tax preferences for, and performance of other rights and obligations by,
joint-stock companies
1. Foreign-invested joint-stock companies shall
enjoy enterprise income tax preferences and perform other rights and
obligations according to the provisions of the Law on Foreign Investment and
their investment licenses.
2. In cases where enterprises are transformed in
the form of transferring part of their value to new shareholders, if there
arise profits from the transfer, the transferors shall pay enterprise income
tax on capital-transferring activities according to the Government's Decree No.
24/2000/ND-CP of July 31, 2000 detailing the implementation of the Law on
Foreign Investment in Vietnam and Decree No. 27/2003/ND-CP of March 19, 2003
amending and supplementing a number of articles of Decree No. 24/2000/ND-CP.
Article 7.- Currencies for
inscription of par value of shares
1. The par value of joint-stock companies'
shares, which are issued in Vietnam, must be inscribed in Vietnam dong.
In cases where shares are issued or listed
overseas, their par value may be inscribed in US dollar or freely convertible
foreign currencies.
2. Shares inscribed in foreign currencies, when
being traded in Vietnam, must be converted into Vietnam dong at the following
rate:
- For US dollar, it is the average transaction
exchange rate on the inter-bank foreign currency market between Vietnam dong
and US dollar, announced by Vietnam State Bank at the time of transformation;
- For other freely convertible foreign
currencies, it is the exchange rate between Vietnam dong and these foreign
currencies, announced by Vietnam State Bank once every 10 days for calculation
of export tax and import tax at the time of transformation.
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1. In course of operation, foreign founding
shareholders may transfer their shares according to Article 15 of Decree No.
38/2003/ND-CP.
2. The transfer of shares held by foreign
founding shareholders must be passed by the Managing Boards of the joint-stock
companies and approved by the Ministry of Planning and Investment.
3. The joint-stock companies must ensure the
percentage of shares held by foreign founding shareholders prescribed in Clause
1, Article 10 and Clause 3, Article 12 of Decree No. 38/2003/ND-CP. In case of
failing to meet the above-stated regulations on the percentage of shares held
by foreign founding shareholders, the joint-stock companies shall have to
report such to the Ministry of Planning and Investment for consideration and
decision.
4. In course of operation, if the joint-stock
companies are detected as having failed to meet the provisions of Clause 1,
Article 10 and Clause 3, Article 12 of Decree No. 38/2003/ND-CP, they shall
have to bear all responsibility therefor and be handled according to law
provisions.
Article 9.- Reporting
regimes
The joint-stock companies shall report their
operation according to common regulations for foreign-invested enterprises, and
biannually and annually report to the Ministry of Planning and Investment and
the Ministry of Finance on the situation of their operation, the issuance of
shares, the percentage of shares held by foreign shareholders, the
participation in domestic and overseas securities markets, advantages and
difficulties as well as other related matters.
Article 10.- Implementation
effect
This Circular takes effect 15 days after its publication
in the Official Gazette.
In course of implementation, any arising
problems should be reported to the Ministry of Planning and Investment and the
Ministry of Finance for study and settlement.
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FOR THE MINISTER OF PLANNING AND
INVESTMENT
VICE MINISTER
NGUYEN BICH DAT
FOR THE MINISTER OF FINANCE
VICE MINISTER
Le Thi Bang Tam