Set up a company in Vietnam providing public products and services

Public products and services are activities that serve the basic and essential needs of the people, for the common benefit of society. In addition to ensuring the social security factor, these service providers still need to make a profit to ensure their existence and development. Today, together with state-owned enterprises, this type of enterprise is strongly deployed and mobilized resources and investment capital from private enterprises and foreign investors. The following article will provide more detailed information about businesses providing public products and services.

Legal basis

• Law on Enterprise 2020;
• Decree No. 32/2019/ND-CP of the Government on Regulations on assigning tasks, ordering or bidding for the provision of public products and services using the state budget from recurrent expenditures.

Conditions for establishing enterprises providing public products and services

Operational goals

Enterprises providing public products and services are established to provide essential products and services for the socio-economic life of the country, locality or community of a territory. territory that the State needs to guarantee for the common interest or to ensure national defense and security , and the production and supply of these products and services under the market mechanism is unlikely to be able to cover the costs.

Enterprises providing public products and services

• Residential community;
• Defense and security units;
• Other competent agencies and organizations.

Business owner

• State enterprises;
• Organizations and individuals that are not prohibited from establishing and managing enterprises as prescribed in Article 17 of the Law on Enterprises 2020.

Features of public products and services

• Products and services to meet the essential needs and interests of the people;
• To be subsidized by the State the difference between the consumption price, the price of products and services according to the State’s regulations or the difference between the amount paid by the beneficiary of the public product or service according to the State’s regulations;
• Provided by different entities, be it the State or the private sector, however, the State still holds an important position in this supply;
• Not derived from profit goals;
• Some public products and services still have to pay a certain fee. These contributions are mainly used to offset the expenses spent, for the expansion and improvement of service quality…;
• Some typical public products and services such as: Public environmental sanitation services; Urban lighting services; Urban water supply and drainage services; Planting and protecting special-use forests and protection forests; Activities of surveying, exploration and investigation on land, water, mineral and other natural resources.

Supply method

• Supply of public products and services as registered with the business registration authority when establishing an enterprise;
• The provision of public products and services shall be carried out by one of three methods decided by a competent State agency, including:
• Bidding;
• Order;
• Assign plan.

Rights of enterprises providing public products and services

• Enterprises providing public products and services have the same rights as enterprises engaged in other lines of business, such as: freely doing business in lines and trades not prohibited by law; business autonomy and choose the form of business organization; proactively select industries, occupations, geographical areas and business forms; proactively adjust the scale and business lines; select forms and methods of capital mobilization, allocation and use; Free market search…
• In addition, some rights that only enterprises providing public products and services have are to account and offset costs at prices prescribed by the law on bidding or to collect fees for using services in accordance with regulations of law. competent state agencies and are guaranteed the appropriate product and service supply time to recover the investment capital and make a reasonable profit.

Obligations of enterprises providing public products and services

Enterprises providing public-utility products and services are obliged to supply products and services in sufficient quantity, with correct quality and within the committed time limit at prices or charges set by competent state agencies; ensure fair and favorable conditions for customers and take responsibility before the law and customers for the quantity, quality, supply conditions and prices and fees of products and services provided.

Note about set up a company in Vietnam providing public products and services

Enterprises providing standard public utility products and services often have economies of scale

Business operations of public utility enterprises often involve essential facilities that require large initial investments such as water pipes, electricity networks, and airport terminal facilities, garbage collection and treatment system, cable TV network, railway network… It is for this reason that enterprises providing standard public utility services often have economies of scale.

Enterprises providing public products and services often exist in the form of monopolies

With very large fixed costs, so as the enterprise expands production, the average cost per product decreases. Therefore, it is very difficult for enterprises entering the market later to compete. This is an important reason why, naturally, the market needs only one business to exist. Therefore, enterprises providing standard public services often exist as natural monopolies.

Procedures for setting up a company in Vietnam providing public products and services

Enterprises providing public-utility products and services shall actually register according to the order, procedures and corresponding dossiers for each type of enterprise specified in the Law on Enterprises.

Step 1: Drafting business registration documents

Dossier of setting up a social enterprise

• Business registration application form;
• Charter of social enterprise (with full signatures of participants in enterprise establishment);
• List of members or shareholders;
• A valid copy of the minutes of the meeting of the general meeting of shareholders, for joint-stock companies, of the members’ council, for limited liability companies with 2 or more members, of the company’s owner/chairman, in the case of public companies. one-member limited liability company, of the general partners, for the partnership company, through the content of the commitment to realize social and environmental goals;
• Power of attorney for the applicant (if not the legal representative of the filing company);
• Valid copy of ID card/citizen identification card/passport of the owner, capital contributors, founding shareholders, legal representative of the enterprise and authorized representative to submit the application (if any).

Step 2: Submit the application for registration of business establishment and pay the enterprise information disclosure fee

• Procedures for paying the business registration information disclosure fee will be carried out in parallel with the procedures for submitting the application for business establishment.
• If the dossier is invalid, the Business Registration Office will notify in writing clearly stating the reason and the requirements for amending and supplementing the dossier for the enterprise to know.
• If the application is valid, the enterprise will submit 01 set of documents (paper application) at the application-receiving department at the Business Registration Office.
• After receiving the enterprise’s application (paper copy), the Business Registration Office will issue the Enterprise Registration Certificate and publish the enterprise information on the National Business Registration Portal.

Step 3: Engrave your business seal

Conditions for ordering the production and supply of public products and services

Orders for manufacturers and suppliers of public products and services shall be conducted when the following conditions are simultaneously satisfied:

• Manufacturers and suppliers of public utility products and services that have registered their business lines in accordance with the ordered fields; have sufficient financial capacity, facilities, technical qualifications, production technology, management qualifications and a team of employees to meet the contract requirements.
• Manufacturers and suppliers of public products and services in the fields subject to the State’s operation license must be a manufacturer licensed by a competent authority.
• The list of public utility products and services has specific characteristics because it is related to intellectual property or only one supplier has registered for implementation.
• Public-utility products and services whose consumption prices, product and service prices, and subsidy levels are decided by competent authorities in accordance with the law on prices and other relevant laws.

Conditions for assigning tasks to provide public products and services

The assignment of the task of providing public administrative services funded by the state budget is only applicable to public non-business units affiliated to superior management agencies that are assigned funding for provision of public administrative services. meet the following conditions:

• Public non-business units have the functions and tasks of providing public administrative services in accordance with their assigned public administrative services under decisions of competent authorities. In addition, for units in the field subject to the State’s operation license, they must be units that have been licensed by a competent agency in accordance with specialized laws.
• Public administrative units have been assigned financial autonomy by competent authorities according to the autonomy mechanism of public administrative units in each field.
• The provision of public non-business services is a regular annual task of the unit.
• The list of public administrative services for which economic-technical norms and unit prices have not yet been established, shall be made according to quantity, volume and reasonable costs according to estimates approved by competent authorities.

Bidding for provision of public non-business services using state budget funds

Contractors may participate in bidding for provision of public administrative services according to the list specified in 2 forms:

• Publicly bidding for the provision of public non-business services as prescribed in Article 20 of the Law on Bidding.
• Bidding is limited to the provision of public non-business services as prescribed in Article 21 of the Law on Bidding.

If you know and want to know more details about the procedures for participating in bidding, set up a company in Vietnam providing public products and services, please contact Viet An Law for complete information and most detailed.