Key takeaways

• The state will hold 100% ownership in SOEs engaging in 13 sectors that primarily focus on national defense and security.
• The state will hold at least 65% ownership in seven sectors (including banking and finance), and from more than 50% to less than 65% ownership in another seven sectors (including air transportation).
• Within 30 days from the effective date of Decision No. 22, the representative bodies of the state capital will prepare and submit to the Ministry of Planning and Investment their respective SOE restructuring plan. The Ministry of Planning and Investment will be responsible for reviewing and seeking opinions from the relevant ministries, as well as compiling and submitting the SOE restructuring plan to the Prime Minister within the third quarter of 2021.

In more detail

1. Summary of key changes

The state will maintain 100% ownership in SOEs engaging in 13 sectors that conduct business in important and sensitive sectors. Compared with the current plan under Decision No. 58, some key sectors introduced into this list include: (a) mine blasting service; (b) construction and operation of large-scale power plants; (c) deposit insurance and bad debt settlement associated with restructuring the system of credit institutions; and (d) oil and gas exploitation.

Three new sectors are added to the second priority list where the state will hold at least 65% of charter capital, including: (a) management and operation of terminals at special seaports; (b) production of cartoons for children as ordered or sponsored by the state; and (c) wholesale of food (for socio-economic purposes or missions). As noted above, oil and gas exploitation is moved to the first priority list where the state reserves 100% ownership.

For less crucial sectors, the state will target to hold 50% to less than 65% ownership of the relevant SOEs' charter capitals. Compared with Decision No. 58, this list remains relatively the same, noting that retail of electricity is no longer included.

2. Detailed list of sectors subject to the state's ownership thresholds

We set out below the list of sectors subject to the state's ownership thresholds pursuant to Decision No. 22:

1. 100% state ownership
   1. Mapping services for national defense and security
   2. Manufacture and sale of industrial explosives and provision of blasting services within Vietnam
   3. Electricity distribution, national electricity system dispatching, management of electrical grids, construction and operation of large hydropower playing a significant role in socio-economic development, and national defense and security in accordance with regulations of law on electricity
   4. Management and operation of state-invested national and urban railway infrastructure; operation of state-invested national and urban rail transport
   5. Air traffic services, aeronautical information services, and search and rescue services
   6. Maritime safety (excluding dredging and maintenance of public navigational channels)
   7. Public postal services, maintenance and management of public postal network
   8. Lottery business
   9. Publishing (excluding printing and publication); production of science films and news in favor of propagation, foreign information service, and ideological and cultural security tasks
   10. Currency printing and minting, manufacture of gold bullion and gold souvenirs
   11. Management and operation of inter-provincial and inter-district hydraulic and agricultural hydraulic structures
   12. Credit instruments for socio-economic development, deposit insurance and bad debt trading and settlement in association with restructuring of credit institutions
   13. Application of high technologies, large investment and creation of driving force for rapid growth of other business lines and economy; exploration, field development and exploitation of oil and gas
2. At least 65% state ownership
   1. Airport management and operation; airfield operation services
   2. Air navigation services, aviation meteorological services
   3. Management and operation of terminals at special seaports in accordance with regulations on classification of Vietnam’s seaports
   4. Large-scale mineral mining under prevailing regulations of laws on classification of mineral mines by their scale
   5. Production of cartoons for children as ordered or sponsored by the state
   6. Financial and banking services (excluding insurance, securities, fund management companies, financial companies and financial leasing companies)
   7. Wholesale of food playing a role in preserving large balances of the economy, stabilizing the market and carrying out political tasks
3. More than 50% to less than 65% state's ownership
   1. Exploitation, production and supply of drinking water, and urban and rural drainage
   2. Manufacture of basic chemicals
   3. Air transport services
   4. Petrol and oil import that holds a market share of at least 30% and contributes to economic balance and market stabilization
   5. Manufacture of cigarettes
   6. Telecommunications services having network infrastructure that is highly important to the operations of the entire national telecommunications infrastructure and directly affects socio-economic development and national defense and security assurance under the Prime Minister’s decision
   7. Enterprises with the role of ensuring the essential needs for production development and improve the material and spiritual life of ethnic minorities in mountainous, remote and isolated areas

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For further information and to discuss what this development might mean for you, please contact us.

Prepared with the assistance of Ngo Chi Hoang Yen.