Author:
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Ha Minh Khang – Lawyer
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Tran Pham Tuong Van – Paralegal
The transfer of investment projects and capital by State-Owned Enterprises (SOEs) under Law No. 68/2025/QH15 and Decree No. 366/2025/ND-CP operates on market principles and a high degree of autonomy, with 03 key legal considerations:
Strict Decision-Making Authority: The Board of Members or the Company Chairperson has the authority to approve transfers if the value does not exceed 50% of equity and stays below the following ceilings: VND 15,000 billion (for large-scale enterprises) or VND 5,000 billion (for other enterprises). Transactions exceeding these thresholds must be submitted to the Owner’s Representative Agency for approval.
Valuation and Land Use Rights: All transfer plans must involve a professional valuation firm to ensure that prices align with market value. Notably, for projects, the value of land use rights (including land with annual rental payments) must be fully and transparently calculated to prevent loss of state capital.
Flexible Execution Methods: Transfers are categorized by subject matter in order to apply the corresponding specialized laws (Enterprise Law, Securities Law, Investment Law, or Land Law). Public auction is a mandatory requirement unless specialized laws dictate otherwise, ensuring maximum transparency.
Advice: Enterprises must thoroughly prepare transfer plans, clarifying the objectives, efficiency, and individual responsibilities involved—especially in cases where the expected recovery value is lower than the book value of the investment.
This article analyzes the key issues that enterprises and managers must pay particular attention to when executing such transfers.
1. Core Principles in the Transfer of Projects and Investment Capital
The transfer of projects and investment capital by State-Owned Enterprises (SOEs) plays a pivotal role in restructuring resources and enhancing the efficiency of state capital invested in enterprises. The Law on Management and Investment of State Capital in Enterprises 2025 and Decree No. 366/2025/ND-CP (“Decree 366”) have established a rigorous legal framework aimed at ensuring adherence to market principles, openness, transparency, and the preservation and development of state capital.
Mastering the regulations on approval authority, valuation methods, and implementation procedures not only helps enterprises optimize asset value but also constitutes a prerequisite for ensuring the preservation and maximum recovery of state investment capital. However, all project and capital transfer activities must adhere to the following fundamental principles:
- Compliance with specialized laws: This includes not only the Law on Management and Investment of State Capital in Enterprises 2025 but also the laws on enterprises, investment, land, housing, real estate business, securities, and other relevant regulations;
- Full and accurate reflection of the actual value of the transfer: Particular emphasis must be placed on the value of land use rights—a factor often overlooked yet central to investment projects;
- Ensuring market principles, openness, and transparency, without being restricted by the conditions applicable to public offerings of securities.
2. Authority to Decide on Transfer
Members’ Council/Company Chairperson: The Members’ Council or the Company Chairperson has the authority to decide on a transfer when the transfer value does not exceed 50% of the owner’s capital, or does not exceed 50% of the owners’ investment capital (in cases where the owner’s capital appendix I of Decree 366; or VND 5,000 billion for other enterprises.
The owner’s capital and the owner’s investment capital are determined based on the enterprise’s separate quarterly or annual financial statements closest to the time the transfer decision is made.
Owner’s Representative Agency
In cases where the transfer value exceeds the aforementioned authority, the enterprise is required to prepare a plan and report to the Owner’s Representative Agency for approval before deciding on the transfer. The value of the investment capital is determined by the higher of the book value of the investment and the expected proceeds from the transfer.
Executive Board (General Director/Director)
The Members’ Council or the Company Chairperson may delegate authority to the General Director or Director to decide on the transfer of the enterprise’s investment capital in accordance with the company’s charter or financial regulations.
This decentralization is an internal authorization and does not change the ultimate legal authority of the Members’ Council or the Company Chairperson.
3. Methods for Transferring Invested Capital and Investment Projects
For invested capital: The law stipulates that a single general method is not applied to all cases of capital transfer; instead, it distinguishes based on the type of enterprise receiving the capital:
- For limited liability companies with two or more members: Shall be conducted in accordance with the Enterprise Law;
- For listed joint-stock companies or those registered for trading: Conducted in accordance with securities law;
- For unlisted joint-stock companies or those not yet registered for trading: Conducted through a public auction, unless otherwise provided by law;
- For invested capital in business cooperation contracts: Conducted in accordance with investment law.
For investment projects: The transfer method is carried out according to the provisions of relevant laws. In cases where the relevant law does not stipulate a transfer method, the transfer shall be carried out through a public auction or another method decided by the Members’ Council or the Company Chairperson, who shall be held responsible for ensuring market principles, openness, transparency, and compliance with regulations.
The transfer price must be close to the market price and not lower than the price determined by a valuation enterprise.
4. Requirements for developing a capital transfer plan
In cases where the transfer of investment capital must be submitted to the Owner’s Representative Agency for approval prior to the transfer decision, the Board of Members or the Company Chairperson shall prepare a capital transfer plan to report to the owner’s representative agency. The capital transfer plan shall include the following primary contents:
- The legal basis and purpose of the transfer;
- Evaluation of investment efficiency and the impact of the transfer;
- The financial status and business performance of the enterprise; market demand for capital investment in the enterprise whose capital is being transferred; and the expected recovery value from the capital transfer;
- Method of capital transfer (in the case of a block auction, specific grounds for applying a block auction in accordance with regulations must be reported);
- Expected timeline for the implementation and completion of the capital transfer.
Handling cases where the transfer price is lower than the invested capital:
In cases where the expected transfer value is lower than the investment value recorded in the accounting records, but the enterprise has already made provisions for losses in accordance with regulations, the Board of Members or the Company Chairperson may still decide on the capital transfer plan. However, the enterprise must review the responsibilities of relevant organizations and individuals involved in investment capital management if the provision made is lower than the actual loss incurred.
5. Legal requirements for the transfer of investment projects
Enterprises with 100% charter capital held by the State may only transfer all or part of an investment project when the project fully meets the transfer conditions under the laws on investment, land, housing, real estate business, and other relevant legal regulations; simultaneously, the transfer must ensure the principles of openness, transparency, and compliance with market principles.
Unlike the transfer of investment capital, the transfer of investment projects requires the enterprise to separately determine the value of the project, in which the value of land use rights is a mandatory component that must be fully and separately determined, even for cases of land leased with annual rental payments; the determination of the transfer price must be conducted by a qualified price appraisal enterprise in accordance with legal regulations.
In cases where the project value exceeds the decision-making authority of the Board of Members or the Company Chairperson, the enterprise must prepare a reporting dossier for the owner’s representative agency, including the transfer plan, legal documents of the project, price appraisal results, and other related documents.
Thus, the transfer of an investment project is not only a business decision but also a specific legal process, in which errors regarding transfer conditions, authority, or valuation can lead to risks relating to the validity of the transaction and potential liability for state capital management.
Recommendation:
In the process of considering the transfer of investment projects or investment capital, enterprises with 100% charter capital held by the State should approach this activity as a controlled state capital governance process, rather than a mere business decision. Enterprises should fully review transfer conditions, decision-making authority, implementation methods, and valuation bases—particularly the full determination of land use right values for investment projects. Thoroughly preparing the transfer plan from the outset will help enterprises ensure legal compliance, mitigate risks relating to transactional validity and liability in state capital management, while optimizing capital recovery value.
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Time of writing: 09/02/2026
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