The social enterprise in Vietnam

The social enterprise (i.e. non-profit entity) in Vietnam, a new corporate form, has been guided by Decree No. 96/2015/ND-CP dated 19 October 2015 of Vietnamese Government effective from 8 December, 2015.

The social enterprise in Vietnam

1. What is the social enterprise in Vietnam?

Social enterprises are enterprises being incorporated for the purpose of solving community social and environmental issues.
Social enterprises are entitled to incentives and investment support as prescribed by law.

2. What is funding provided to a social enterprise in Vietnam.

Funding provided to a social enterprise in Vietnam must be recorded in writing and may only come in the following forms:

a. Foreign non-government aid;
b. Assets, finance, or technical assistance from domestic individuals/agencies/organizations; and
c. Assets, finance, or technical assistance from foreign organizations registered in Vietnam;

3. Commitments to fulfill community social and environmental objectives of social enterprises in Vietnam.

Commitments to fulfill community social and environmental objectives of social enterprises in Vietnam is made in the standard form and must include the following details:

a. The social and the environmental issues; methods that the enterprise plans to employ to solve such social and environmental issues.
b. Period of time taken to solve the social and environmental issues.
c. The level of the percentage (%) of profit retained annually for reinvestment in effort to solve the social and environmental issues.
d. Principles and methods of use of grants and donations from organizations and individuals; principles and methods of processing aids, residual funding as businesses liquidated or converted into ordinary businesses (if any).
e. Full name and signature of the owner of a private enterprise for private enterprises; members of the partnership for the partnership; members, shareholders are individuals, legal representative or authorized representative of the members or shareholders is held for limited liability companies and joint stock companies.

The Social Enterprise in Vietnam must notify said commitments for business registration agencies to public on national portal of enterprise registration upon establishment or in the operation.

4. Monitor and supervision of social enterprises in Vietnam.

The social enterprise will be monitored by government agencies, including the provincial-level Department of Planning and Investment (DPI) and People’s Committees, and will be required to submit periodic reports on its social impact and general compliance with Government standards for a social enterprise.

An enterprise currently operating under another corporate form such as social protection establishments, social funds or charity funds may transform into a social enterprise if it meets Government requirements.

In keeping with international standards on non-profit transparency, the social enterprise will be subject to rigorous disclosure requirements.

Members of the public may request the relevant Government agency to provide information, copies of a social enterprise’s annual social impact assessment report and lists of/receipts from financial donations/donors filed with such agencies.

Where an enterprise does not maintain its status as a social enterprise in Vietnam, it will be terminated with the remainder of assets being returned to donors, transferred to another social enterprise, and/or used to pay off any debt.

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