Who cannot Contribute Capital to a Vietnamese enterprise from 2025?
The Law on Enterprises is an important legal foundation regulating the establishment, organization, and operation of enterprises in Vietnam. After many amendments, this law has been increasingly improved to suit practical requirements, ensuring a transparent, fair, and effective business environment. In particular, the amended and supplemented Law on Enterprise 2025 has made notable changes compared to the Law on Enterprise 2020, including regulations related to subjects not entitled to contribute capital or purchase shares in enterprises. In the following article, Viet An Law will specifically share the current regulations related to this question: Who cannot contribute capital to a Vietnamese enterprise from 2025?, and compare and clarify the similarities and differences of this amended Law with the Enterprise Law 2020.
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Subjects cannot contribute capital to a Vietnamese enterprise according to the Law on Enterprises 2025
Pursuant to Clause 3, Article 17 of the Law on Enterprise 2020 and Clause 6, Article 1 of the 2025 amended and supplemented Law on Enterprise, the subjects that are not allowed to contribute capital or purchase shares of enterprises are as follows:
Organizations and individuals have the right to contribute capital, purchase shares, or purchase capital contributions to joint stock companies, limited liability companies, and partnerships according to regulations, except in the following cases:
State agencies and units of the people’s armed forces use state assets to contribute capital to enterprises for their own benefit;
Subjects not allowed to contribute capital to enterprises according to the provisions of the Law on Cadres and Civil Servants, the Law on Public Employees, and the Law on Anti-Corruption, except in cases where it is implemented according to the provisions of the law on science, technology, innovation, and national digital transformation.
New points in regulations on subjects cannot contribute capital to a Vietnamese enterprise in 2025
Supplement point b, clause 2, Article 17 of the Law on Enterprise 2020
At Point b, Clause 2, Article 17 of the Law on Enterprise 2020, it is stipulated that cadres, civil servants, and public employees, as prescribed by the Law on Cadres, Civil Servants, and the Law on Public Employees, do not have the right to establish and manage enterprises in Vietnam.
Meanwhile, Point a, Clause 6, Article 1 of the 2025 amended and supplemented Law on Enterprises has added this provision as follows: Cadres, civil servants, and public employees as prescribed by the Law on Cadres, Civil Servants, and the Law on Public Employees, except for cases implemented in accordance with the provisions of the law on science, technology, innovation, and national digital transformation, will not have the right to establish and manage enterprises in Vietnam.
This amendment is to comply with Article 4 of Resolution No. 193/2025/QH15 dated February 19, 2025, of the National Assembly on piloting a number of special mechanisms and policies to create breakthroughs in science, technology development, innovation, and national digital transformation.
Amending Point e, Clause 2, Article 17 of the Law on Enterprise 2020
Point e, Clause 2, Article 17 of the Law on Enterprise 2020 stipulates that subjects who are not entitled to contribute capital, purchase shares to contribute capital and manage enterprises are those who are being prosecuted for criminal liability, detained, serving a prison sentence, serving an administrative measure at a compulsory drug rehabilitation facility, a compulsory education facility or are prohibited by the Court from holding a position, practicing a profession or doing certain work; other cases as prescribed by the Bankruptcy Law and the Law on Anti-Corruption. In case the Business Registration Authority requests, the person registering to establish an enterprise must submit a Criminal Record to the Business Registration Authority.
The amended Law on Enterprises 2025 has removed the section. In case the Business Registration Authority requests, the person registering to establish an enterprise must submit a Criminal Record Certificate to the Business Registration Authority.
It can be seen that, according to the provisions of the current Law, the drafting agency does not stipulate that the person registering to establish a business must submit a Criminal Record to reduce the burden of administrative procedures for the enterprise. The business registration agency will coordinate with the police agency if necessary, according to the provisions of Clause 3, Article 7 of the Law on Criminal Records.
Supplement point b, clause 3, Article 17 of the Law on Enterprise 2020
Similar to Clause 2, the Law on Enterprise 2020 also stipulates that organizations and individuals have the right to contribute capital, purchase shares, and purchase capital contributions to joint stock companies, limited liability companies, and partnerships according to the provisions of this Law, except for cases where they are not allowed to contribute capital to enterprises according to the provisions of the Law on Cadres and Civil Servants, the Law on Public Employees, and the Law on Anti-Corruption.
Meanwhile, point b, clause 6, article 1 of the Amended and supplemented Law 2025 has additionally stipulated that this will be except in cases implemented in accordance with the provisions of law on science, technology, innovation, and national digital transformation.
General assessment
These exceptions reflect a policy of encouraging the participation of state resources in priority development areas, while strengthening the legal basis for anti-corruption prohibitions.
It can be seen that, compared to the Law on Enterprise 2020, the revised Law on Enterprise 2025 has made reasonable adjustments, both tightening the subjects that need to be controlled and expanding conditional exceptions to serve national economic and technological development strategies. This demonstrates progressive legal thinking, shifting from “absolute prohibition” to “conditional control”, in line with the context of digital transformation, integration, and development of the Vietnamese economy.
What kind of behavior does it mean for an organization or individual to use state assets to contribute capital to an enterprise for personal gain for their own agency or unit?
Pursuant to Clause 4, Article 17 of the Law on Enterprises 2020, “making profits for one’s own agency or unit” is understood as the act of using income in any form obtained from business activities, capital contributions, share purchases, and capital contribution purchases to serve the internal interests of the agency or unit. Specifically, including the following cases:
Distribute benefits in any form to some or all of the following groups:
Cadres, civil servants, and public employees as prescribed by the Law on Cadres, Civil Servants, and the Law on Public Employees;
Officers, non-commissioned officers, professional soldiers, workers, and defense officials working in units of the Vietnam People’s Army; officers, professional non-commissioned officers, police workers in units of the Vietnam People’s Public Security;
(Except for those appointed as authorized representatives to manage the State’s capital contribution in enterprises or to manage state-owned enterprises).
Adding to the operating budget of an agency or unit contrary to the provisions of law on the state budget;
Establishing or adding to funds serving the private interests of the agency or unit.
In cases where an entity is not entitled to contribute capital or purchase shares in an enterprise but still proceeds to do so, what penalties will be imposed?
According to Article 46 of Decree No. 122/2021/ND-CP regulating administrative sanctions in the field of planning and investment, those who do not have the right to contribute capital, buy shares, or capital contributions in an enterprise but still do so may be fined from 20,000,000 VND to 30,000,000
In case of violation of tax laws, it shall be handled according to regulations on administrative sanctions for violations in the tax field.
Note: The above administrative penalty applies to organizations. The penalty for individuals is half the penalty for organizations.
Above is the advice of Viet An Law on the issue: Who cannot contribute capital to a Vietnamese enterprise from 2025. If you need further advice on enterprises or other specialized consulting issues, please contact Viet An Law for the best support.
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