Introduction to social funds, charity funds in Vietnam

Introduction to social funds, charity funds in Vietnam

Social funds and charity funds in Vietnam were introduced and governed according to Decree No. 93/2019/ND-CP dated November 25, 2019 of the Government of Vietnam (Decree 93/2029/ND-CP).

1. Definition of social funds and charity funds in Vietnam

a. A social fund or charity fund in Vietnam is a non-governmental organization with legal status in which an individual or organization voluntarily contributes a certain amount of property for establishment or is established through a will, donation or donation of successful assets, have the purpose of organization and operation according to the provisions of Clause b below, and have the establishment license granted and charter recognized by the competent state agency.

b. Purpose of organization and operation of social funds and charity funds: Social funds and charity funds are organized and operated for the purpose of supporting and encouraging the development of culture, education, health and physical education, sports, science, technology, community and charity, humanitarian, not for profit.

c. Social Fund: A fund organized and operated for the purpose of supporting and encouraging the development of culture, education, health, physical training, sports, science and agricultural and rural development, not for profit target.

d. Charity Fund: A fund organized and operated for the purpose of assisting in overcoming incidents caused by natural disasters, fires, epidemics, accidents and other difficult and disadvantaged subjects who need the assistance of social, not for profit.

2. Principles of organization and operation of social funds and charity funds in Vietnam

a. Established and operated not for profit.
b. Voluntarily, autonomously, self-financed and responsible before the law with their own property.
c. Organize and operate according to the provisions of law and the charter recognized by the competent state agency.
d. To be public and transparent about the organization, operation, and financial and asset revenues and expenditures of the fund.
e. No property division.

3. Rights and obligations of social funds and charity funds in Vietnam

a. Rights of social funds and charity funds:

i. Organize and operate according to laws and charters recognized by competent state agencies;
ii. Mobilizing donations, sponsoring the fund; receive assets sponsored, donated, donated by domestic and foreign individuals and organizations or in other forms in accordance with the fund”s purposes and the provisions of law. Organizing activities in accordance with the law to preserve and grow the fund”s assets;
iii. To establish affiliated legal entities according to the provisions of law;
iv. To have the right to complain in accordance with the law;
v. The Fund may coordinate with individuals and organizations to mobilize donations, mobilize funding for the fund or to implement specific schemes and projects of the fund in accordance with law;
vi. Coordinate with localities, organizations and individuals need of assistance to develop and implement funding projects according to the fund”s operational purposes.

b. Obligations of social funds and charity funds:

i. In any field which the Fund operates in, it must be under the management of the state agency in charge of that industry or field and may only receive and mobilize funding within the scope of its operation according to the fund”s charter;
ii. Make sponsorships at the request of authorized individuals and organizations in accordance with the fund”s purpose;
iii. Funds established from resources donated or donated or under an authorization contract or will, but without organizing donations and receiving funding, must annually spend at least 5% of total assets to finance programs. programs and projects suitable to the fund”s operational purposes;
iv. To preserve and be responsible for providing sufficient records, vouchers and documents on assets and finance of the fund, resolutions and minutes on the fund”s activities to competent state agencies according to regulations. under the law;
v. Use assets and finance thriftily and effectively for the right purposes of the fund; pay taxes, fees and charges and implement accounting, auditing and statistical regimes in accordance with law; must register for tax identification number and declare tax in accordance with the provisions of tax law;
vi. To be subject to inspection, examination and supervision by state agencies, sponsoring organizations and individuals and the community in accordance with law. To be responsible for settling complaints and denunciations within the fund and to report settlement results to competent state agencies;
vii. Annually, the fund is responsible for publicizing contributions on the mass media before March 31;
viii. When changing the head office or the director of the fund, the fund must report in writing to the agency competent to grant the fund establishment license;
ix. Annually, the fund must report on the organization, operation and financial situation to the agency granting establishment license and recognizing the fund charter, the state management agency in charge of finance at the same level with the agency competent to grant the establishment license and recognize the fund charter. the fund”s establishment license, the agency managing the fund”s branches and fields of operation, and reporting to the People”s Committee of the province where the fund is located before December 31;
x. Announcement of the establishment of the fund according to the provisions of Article 22 of this Decree;
xi. Implement decisions of competent state agencies related to the organization and operation of the fund and perform other obligations in accordance with the law and the fund charter.

4. Conditions for granting a license to establish a social fund or charity fund in Vietnam:

a. Having the purpose of operation as prescribed in Clause 1.b above.
b. Having a founder specified in Section 5 below.
c. The founding board of the fund has enough assets to contribute to the establishment of the fund as prescribed in Clause 8 below.
d. Dossier for establishment of a security fund as prescribed in Article 15 of Decree 93/2029/ND-CP.

5. Founding members of social fund, charity fund in Vietnam

a. Founding members must meet the following conditions:

i. The founding members of the fund must be Vietnamese citizens or organizations;
ii. For citizens: Having full civil act capacity and no criminal record;
iii. For organizations: Legally established, with a charter or document specifying the functions and tasks of the organization; there is a resolution of the leadership collective or a decision of the competent head on participation in the establishment of the fund; decide to appoint a representative of the organization to participate in the status of founding members of the fund; in the case of a Vietnamese organization with foreign investment capital, the representative of the organization acting as a founding member of the fund must be a Vietnamese citizen;
iv. Contributing legal assets to establish the fund as prescribed in Article 8 below;
v. Founding members, if they are under the management of a competent authority, must obtain the written consent of the competent authority in accordance with regulations on decentralization of staff management before sending the dossier to the competent authority. The competent state as prescribed in Article 18 of Decree 93/2029/ND-CP issues the establishment license and recognizes the fund charter.

b. The founding members will establish the Fund Foundation Board. The foundation board of the fund must have at least 03 founding members, including: head, deputy head and members.

c. The founding board of the fund shall prepare a dossier of application for permission to establish the fund according to the provisions of Article 15 of Decree 93/2029/ND-CP and send it to the competent state agency specified in Article 18 of Decree 93/2029/ND-CP. CP. The Fund”s founding board is responsible for nominating the Fund Management Council, developing the draft charter and documents in the fund establishment dossier.

6. Foreign individuals and organizations contribute assets with Vietnamese citizens and organizations to establish social funds and charity funds in Vietnam

a. Foreign individuals and organizations may contribute assets with Vietnamese citizens and organizations to establish funds in Vietnam.

b. Conditions for foreign citizens and organizations:
i. Must have a commitment to pay taxes and be responsible for the legality of the contributed assets;
ii. Commitment to strictly implement the laws of Vietnam and the purpose of the fund”s operation;
iii. Having assets to contribute to the establishment of the fund as prescribed in Claus 8 below.

c. The assets contributed to the establishment of the fund by foreign individuals or organizations must not exceed 50% of the assets contributed to the establishment of the fund according to the provisions of Decree 93/2029/ND-CP.

7. Establishment of a social fund, a charity fund according to a will or a donation or donation of property

a. Vietnamese citizens and organizations that inherit according to a will or are given assets by a donor to establish a fund shall comply with the provisions of Clause 1, Article 11 of  Decree 93/2029/ND-CP and compile a dossier for establishment of the fund as prescribed in Article 11 of Decree 93/2029/ND-CP shall be sent to the competent state agency specified in Article 18 of Decree 93/2029/ND-CP. In case the assets established for the establishment of the fund are inherited according to a will or donated or donated sufficiently as prescribed in Article 14 of Decree 93/2029/ND-CP, no additional founders are required. In case the assets to establish the fund are inherited according to the will or donation or donation is not enough according to regulations, the founders must be supplemented and the contributed assets are sufficient as prescribed.
b. Funds established according to a will or donation or donation must have a certified copy of the will or written donation or donation as prescribed by law.
c. Funds established under an authorization contract of an organization or individual must have a notarized authorization contract in accordance with law.

8. Assets contributed to the establishment of social funds and charity funds in Vietnam

a. Assets contributed to the establishment of the fund include:
i. Vietnamese Dong;
ii. Assets converted into Vietnamese Dong (including: Material, foreign currency, valuable papers, other property rights) of Vietnamese citizens and organizations that are foreign founding member, individuals and organizations contribute with Vietnamese citizens and organizations to establish the fund. For assets being headquarters, equipment and technology must be valued by a legally established price appraisal organization, the time of asset valuation must not exceed 06 months from the time of submission of the fund establishment dossier;
iii. In case the assets contributed to the establishment of the fund include other assets excluding Vietnam dong, the amount of Vietnam dong must be at least 50% of the total value of the assets.

b. For social funds and charity funds established by Vietnamese citizens or organizations, the assets contributed to the establishment of the fund must be converted into Vietnamese dong as follows:
i. Fund operating nationwide or inter-provincial: 6,500,000,000 (six billion five hundred million dong);
ii. Fund operating within the province: 1,300,000,000 (one billion three hundred million dong);
iii. Fund operating within the district level: 130,000,000 (one hundred and thirty million dong);
iv. Fund operating within commune level: 25,000,000 (twenty five million dong).

c. In case a foreign individual or organization contributes assets to a Vietnamese citizen or organization establishing a fund, it must ensure that the assets contributed to the establishment of the fund are converted into Vietnam dong as follows:
i. Fund operating nationwide or inter-provincial: 8,700,000,000 (eight billion seven hundred million dong);
ii. Fund operating within the province: 3,700,000,000 (three billion seven hundred million dong);
iii. Fund operating within the district level: 1,200,000,000 (one billion two hundred million dong);
iv. Fund operating within commune level: 620,000,000 (six hundred and twenty million dong).

d. Assets contributed to the establishment of the fund must be transferred to the fund within 45 working days from the date the fund is granted the establishment license and its charter is recognized. Assets contributed to the establishment of the fund are not subject to dispute or other financial obligations.

LAWYER VIETNAM LAW FIRM – Vietnamese Lawyers