Author:

• Ha Minh Khang – Lawyer

• Nguyen Khanh Duy – Paralegal

Pursuant to the Law on Management and Investment of State Capital in Enterprises 2025 and Decree No. 366/2025/ND-CP, investment activities of State-Owned Enterprises (SOEs) are subject to a tiered and stringent management regime based on ownership ratios and project values, with three key aspects as follows:

• Delegation of investment decision-making authority: The Members’ Council or the Company Chairperson is authorized to decide on projects with a value not exceeding 50% of the owner’s capital, provided that such value also falls within the prescribed caps: VND 15,000 billion for Groups and General Corporations (in sectors such as electricity, oil and gas, telecommunications, etc.) and VND 5,000 billion for other enterprises. Any project exceeding these thresholds must obtain approval from the Owner’s Representative Agency.
• Control of conflicts of interest: The law strictly prohibits SOEs from contributing capital to or acquiring shares in enterprises in which managers have close family relationships (such as spouses, parents, children, siblings, etc.) with key executives of the SOE concerned, in order to prevent misconduct and the loss of state capital.
• Delineation of the legal framework: Public investment activities (in public programs and projects) are governed by the Law on Public Investment 2024, while ordinary business investment activities (capital contribution, share acquisition, business cooperation contracts (BCCs)) are subject to the Law on Management and Investment of State Capital in Enterprises 2025 and other relevant sector-specific regulations (such as petroleum, electricity, etc.).

Note for managers: For SOEs in which the State holds less than 100% of the charter capital, investment decision-making rights are exercised through the State capital representative, based on the directives of the Owner’s representative authority, prior to voting at meetings of the Board of Directors or the General Meeting of Shareholders, as applicable.

1. For enterprises in which the State holds 100% of the charter capital

In this case, the State-Owned Enterprise (SOE) may carry out investment activities in accordance with the Law on Investment and other relevant laws, and may purchase securities in accordance with the laws on securities.

The investment forms stipulated under the Law on Investment include:

• Investment in the establishment of an economic organization.
• Investment by way of capital contribution, purchase of shares, or purchase of capital contributions.
• Implementation of investment projects.
• Investment in the form of a Business Cooperation Contract (BCC).
• Other forms of investment and new types of economic organizations as prescribed by the Government.

Investment decision-making authority:

• For investment projects using all or part of public investment capital, the authority to decide on the investment policy, investment decision, as well as the investment procedures and processes shall be implemented in accordance with the laws on public investment;
• For investment projects subject to investment policy approval under the laws on investment and other relevant laws, the Members’ Council or the Company Chairperson shall decide on the investment project after completion of the investment policy approval procedures; the investment procedures and processes shall be carried out in accordance with the laws on investment and other relevant laws;
• For investment projects subject to investment policy approval under the laws on investment but not required to carry out investment policy approval procedures under other relevant laws, the authority, procedures, and processes for investment shall be implemented in accordance with such other relevant laws and applicable Government regulations;
• For investment projects in the petroleum sector, the authority to decide on the investment policy and investment decision shall be implemented in accordance with the laws on petroleum;
• For urgent power investment projects and emergency power works that are subject to investment policy approval under the laws on investment but not required to carry out investment policy approval procedures under the Law on Electricity, the Members’ Council or the Company President shall decide on the investment project after the competent authority approves the list of emergency power source and power grid projects or programs and assigns the enterprise as the project owner.

Except for the cases mentioned above, the Members’ Council or the Company President is authorized to decide on each project or investment with a value not exceeding 50% of the owner’s capital (or not exceeding 50% of the owner’s investment capital in cases where the owner’s capital is lower), subject to the following caps:

• Not exceeding VND 15,000 billion for state-owned groups and general corporations operating in key and essential sectors of the economy as prescribed by the Government, such as industry, electricity, postal services, coal, telecommunications, and railways;
• Not exceeding VND 5,000 billion for other enterprises.

In cases where a project or investment exceeds the thresholds mentioned above, the enterprise may only decide on the investment after reporting to and obtaining approval from the Owner’s Representative Agency regarding the investment purpose, investment amount, funding sources, and implementation timeline.

The law also imposes restrictions to prevent conflicts of interest, whereby an enterprise is prohibited from contributing capital to, or acquiring shares or capital contributions in, another enterprise if the managers or representatives of such enterprise have close family relationships with key managerial positions of the state-owned enterprise, including the spouse; biological father or mother; adoptive father or mother; father-in-law or mother-in-law; stepfather or stepmother; biological child or adopted child; son-in-law or daughter-in-law; biological brother or sister; brother-in-law or sister-in-law, of the Chairman of the Members’ Council, members of the Members’ Council, the Company President, the General Director, the Director, the Controller, or the Chief Accountant.

The transfer of profits, income, and the recovery of capital from overseas investment projects shall be carried out in accordance with the enterprise’s charter, its internal financial regulations, and applicable laws, internal financial regulations, and relevant laws.

With respect to the transfer of investment projects or invested capital, the decision-making authority of the Members’ Council or the Company President shall likewise be determined based on the ratio of owner’s equity and the transfer value; where the applicable thresholds are exceeded, the enterprise must report to and obtain prior approval from the owner’s representative authority before implementation.

2. For enterprises in which the State holds less than 100% of the charter capital

Cases where the State holds more than 50% and less than 100% of the charter capital

The owner’s representative authority shall manage the State capital in enterprises in which the State holds more than 50% and less than 100% of the charter capital through the State capital representative.

The State capital representative shall report to and seek opinions from the owner’s representative authority before participating in voting at the General Meeting of Shareholders, meetings of the Board of Directors, or the Members’ Council on matters prescribed by law, including matters related to investment activities, such as decisions on investment activities, transfer of investment projects, and transfer of the enterprise’s invested capital in joint-stock companies and limited liability companies with two or more members, where the transaction value exceeds 50% of the enterprise’s owner’s equity or exceeds 50% of the owner’s invested capital in cases where the owner’s equity is lower than the owner’s invested capital. Owner’s equity and the owner’s invested capital shall be determined based on the most recent quarterly or annual financial statements.

The enterprise shall manage its invested capital in joint-stock companies and limited liability companies through the enterprise’s capital representative in accordance with the laws on enterprises and the company charter.

In cases of transfer of investment projects or invested capital of enterprises in which the State holds more than 50% and less than 100% of the charter capital, the same provisions applicable to enterprises wholly owned by the State under Article 21 of the Law on Management and Investment of State Capital in Enterprises shall apply.

Cases where the State holds less than 50% of the charter capital

Under the Law on Enterprises, an enterprise in which the State holds less than 50% of the charter capital is not considered a state-owned enterprise. However, in substance, due to the State’s capital participation, the Law on Management and Investment of State Capital in Enterprises 2025 still provides for management mechanisms applicable to enterprises in which State capital accounts for less than 50% of the charter capital.

Accordingly, the owner’s representative authority shall manage the State capital through the State capital representative in accordance with the laws on enterprises, the company charter, and the operating regulations of the State capital representative.

It can be seen that the legal framework governing the investment activities of state-owned enterprises is designed on a tiered management basis linked to the proportion of State ownership, while simultaneously strengthening control mechanisms to preserve and develop State capital in enterprises. Depending on the level of State ownership, the investment decision-making authority, procedures, and the responsibilities of relevant stakeholders are regulated with varying degrees of stringency.

The promulgation and continuous improvement of the Law on Management and Investment of State Capital in Enterprises, together with a clear delineation between public investment and investment activities within enterprises, contribute to enhancing transparency, mitigating the risk of capital loss, and strengthening accountability in investment activities. In the context where state-owned enterprises continue to play a significant role in key sectors of the economy, full and consistent compliance with investment-related legal regulations is not only a mandatory legal requirement but also a prerequisite for improving corporate governance efficiency and the competitiveness of this sector in the new development phase.

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Time of writing: 09/02/2026

The article contains general information which is of reference value, in case you want to receive legal opinions on issues you need clarification on, please get in touch with our Lawyer  at  info@cdlaf.vn

You can refer for more information:

• Disclosure Obligations of State-Owned Enterprises (SOEs) in 2026
• Transfer of Investment Projects and Capital of State-Owned Enterprises (SOEs) under the 2025 Law
• Restructuring of state capital in Enterprises under the New Law 2025: Key amendments
• Principles of capital mobilization and lending of state-owned enterprises (SOES) under the New regulations of 2026
• What should enterprises pay attention to regarding unilateral contract termination clauses?