THE GOVERNMENT

Article 1.- Governing scope and subjects of application

1. This Decree provides for the organization and operation of social funds and charity funds (below collectively referred to as funds).

2. This Decree applies to:

a/ Vietnamese individuals and organizations, joint-venture enterprises and enterprises with 100% foreign investment capital lawfully set up and operating in Vietnam and engaged in the establishment and operation of funds;

b/ Foreign individuals and organizations that contribute their properties with Vietnamese individuals or organizations for the establishment and operation of funds.

Article 2.- Purposes of organization and operation of funds

Funds are organized and operate on a not-for-profit basis for the purposes of promoting the development of culture, education, healthcare, physical training and sports and science, charity and humanitarian purposes, and community development purposes.

Article 3.- Interpretation of terms

In this Decree, the terms below as construed as follows:

1. "Fund" means a non-governmental organization with the legal person status established from a certain property voluntarily donated by one or several individuals or organizations or established under a contract or testament for supporting on a not-for-profit basis activities in the domains of culture, education, healthcare, physical training and sports and science, charity and humanitarian activities and other activities in the interest of communities; funds are established with the permission of have their charters recognized by competent state agencies.

2. "Not-for-profit" means non-pursuit of profits for sharing; the use of profits earned in the operation process for activities specified in the charter.

3. "Contribution of property" means the transfer of lawful property of individuals or organizations to funds in the form of contract, donation or testament of those who bequeath their property or in other forms.

Individuals and organizations that have contributed their property to funds no longer have the right to own and civil liability for such property.

Article 4.- Principles on operation and financial management of funds

1. Funds are set up and operate for not-for-profit purposes.

2. Funds operate on the principle of voluntariness, self-financing and taking responsibility before law with their own property.

3. Funds operate under their charters recognized by competent state agencies, this Decree and other relevant legal provisions.

4. Funds shall make public all their revenues and expenditures and ensure financial and asset transparency as provided for by law.

Article 5.- State policies for funds

1. When performing tasks assigned by competent state agencies, funds are provided with state budget support according to law.

2. Property contributed by individuals and organizations to funds and funds’ activities for the purposes of developing culture, education, healthcare, physical training and sports and science, for charity and humanitarian purposes or for community benefits are entitled to preferential policies according to law.

Article 6.- Funds’ legal person status, seals, bank accounts, names, logos and addresses

1. Funds have the legal persons status, own seals and bank accounts.

2. Funds select their names and logos. The name and logo of a fund must meet the following conditions:

a/ Not being identical to or causing confusion with names or logos of other funds already registered;

b/ Not contravening historical, cultural and moral traditions or fine national customs;

c/ The name must be in or transcribed into Vietnamese and may be additionally written in one or several foreign languages in smaller font sizes.

3. A fund must have a specific address.

Article 7.- Prohibited acts

1. Abusing the establishment of funds for self-seeking purposes or carrying out illegal activities.

2. Infringing upon lawful rights and interests of individuals, organizations or communities; causing harm to national interests, security, defense or national solidarity.

3. Contravening social morality, fine national custom, practices and traditions and national identity.

4. Falsifying, erasing, transferring, leasing or lending fund establishment licenses in any forms.

5. Laundering money, sponsoring terrorism and other illegal activities.

Article 8.- Founding members

1. Founding members of a fund must fully meet the following conditions:

a/ Vietnamese citizens who are aged full 18 years or older and have full civil act capacity may establish a fund;

b/ Vietnamese organizations, joint-venture enterprises or enterprises with 100% foreign investment capital which are lawfully established in Vietnam, capable of contributing property to a fund as committed and their leaderships have reached written agreement on the establishment of a fund and made decisions on the appointment of representatives to establish a fund;

c/ Individuals or organizations that receive testamentary legacies and are obliged to establish a fund at the request of those who bequeath or donate their property under a contract on the establishment of a fund may establish a fund;

d/ Foreign individuals and organizations may contribute their property with Vietnamese individuals or organizations to establish a fund in Vietnam.

2. For funds with two or more founding members:

a/ Founding members shall set up a fund founding board;

b/ A fund founding board is composed of a head, a deputy head and founding members;

c/ The fund founding board shall compile a dossier of application for permission to establish a fund as prescribed in Article 10 and send it to a competent agency specified in Article 14 of this Decree.

Article 9.- Conditions for establishment of funds

1. A fund may be established if meeting the following conditions:

a/ Having operation purposes as prescribed in Article 2 of this Decree;

b/ Having received written commitments on the contribution of property from its being founding members;

c/ Having a charter and organizational structure in accordance with this Decree and relevant legal provisions;

d/ Having a head office.

2. The Minister of Home Affairs shall specify conditions for the establishment of funds.

Article 10.- Dossiers of fund establishment

1. An application for the establishment of a fund.

2. The draft charter of the fund.

3. A plan on the establishment and operation of the fund.

4. Commitment on the fund’s head office.

5. Commitments on contribution of property for the establishment of the fund.

6. Status of founding members:

a/ Founding members being Vietnam citizens must have judicial records and commitments on the contribution of property or funds for the establishment of the fund;

b/ Founding members being foreigners must have personal records certified by a competent agency of the country of which they are citizens; commitments on the contribution of property or funds to Vietnamese individuals or organizations for the establishment of the fund; and commitment on the observance of Vietnamese law and operation purposes of the fund;

c/ Founding members being Vietnamese organizations: their names and addresses; resolutions of their leaderships on the participation in the establishment of the fund, enclosed with the decision on the amount of property contributed for the establishment of the fund; their charters and decisions on the appointment of representatives to participate in or act as founding member of the fund;

d/ For founding members being foreign organizations: names and addresses of their head offices; their charters; commitments on the contribution of property and observance of Vietnamese law and operation purposes of the fund; personal records of their representatives in the fund, certified by the organizations.

7. For funds established under testaments or authorization contracts of organizations or individuals: notarized copies of the testaments or authorization contracts.

Article 11.- Principal contents of the charter of a fund

1. The name of the fund.

2. The fund’s operation objectives, domain and geographical area.

3. The fund’s tasks and powers.

4. Principles on the organization, operation, organizational structure, tasks, powers of the Fund Management Council, Control Board, chairman, director and other leading posts.

5. Mode of amending and supplementing the charter.

6. Principles on fund raising, receipt and use of donations.

7. Regulations on property and financial matters and management and use of assets and finances.

8. Commendation, discipline, complaints and denunciations and handling of violations in the operation of the fund.

9. Conditions for the consolidation, merger, division, splitting and dissolution of the fund.

Article 12.- Conditions for a fund to operate

1. Having an establishment license and a charter recognition paper, granted by the Ministry of Home Affairs, the People’s Committee of a province or centrally run city (referred to as provincial-level People’s Committee) or the People’s Committee of a district, town or provincial city (collectively referred to as district-level People’s Committee).

2. Having an account with an adequate amount of money on credit contributed by founding members as committed at the bank or state treasury where the fund has registered to open the account and the Fund Management Council’s written certification of other property which founding members have already contributed as committed.

3. Having a head office for transaction.

4. Having announced its establishment on three consecutive issues of a central printed newspaper or online newspaper, for funds licensed by the Ministry of Home Affairs; of a provincial printed newspaper or online newspaper, for funds licensed by provincial-level or district-level People’s Committees. The announcement contains: the fund’s name, full name of its head, bank account number, name and address of the bank where the account is opened, initially registered property of the fund, main operation domain, address, telephone number and e-mail address (if any) of the fund.

Article 13.- Fund establishment licenses and charter recognition papers

1. Fund establishment licenses and charter recognition papers:

a/ For a newly established fund, the fund establishment license is also the charter recognition paper;

b/ Fund establishment licenses and charter recognition papers may be modified at the request of the Fund Management Council. All changes in the fund establishment licenses and the charter of funds must be approved and recognized by the Ministry of Home Affairs, provincial-level People’s Committees or district-level People’s Committees;

c/ Within 60 days after receiving a valid and complete dossier, the Ministry of Home Affairs, the provincial-level People’s Committee or district-level People’s Committee shall grant a fund establishment license and recognize the charter of the fund. In case of refusal to grant an establishment license and recognize charter of the fund, they shall issue a written reply, clearly stating the reasons.

d/ If the fund fails to commence its operation within 12 months after being granted the establishment license, the establishment license will cease to be valid. State agencies that have granted establishment licenses shall issue decisions to withdraw these establishment licenses.

2. The Ministry of Home Affairs shall issue forms of establishment license and charter recognition paper and specify the order of and procedures for grant and modification of establishment licenses and charter recognition papers.

Article 14.- Competence to permit the establishment, consolidation, merger, division, splitting and dissolution of funds; to terminate the operation; to withdraw establishment licenses; to recognize funds’ charters; to rename funds and settle fund-related complaints and denunciations

1. The Minister of Home Affairs has the competence specified in this Article with respect to:

a/ Funds operating on a national or inter-provincial scale;

b/ Funds jointly established by foreign organizations or individuals under Point b, Clause 2, Article 1, of this Decree.

2. Presidents of provincial-level People’s Committees have the competence specified in this Article with respect to funds operating within a province or several districts in a province.

Based on practical conditions, presidents of provincial-level People’s Committees may authorize presidents of district-level People’s Committees to decide on the establishment, consolidation, merger, division, splitting and dissolution of funds; termination of operation; withdrawal of establishment licenses; recognition of funds’ charters; and renaming of funds and settlement of complaints and denunciations about funds operating within districts or communes.

Article 15.- Fund Management Council

1. A fund must have a management council. A Fund Management Council has at least three members appointed by founding members. The term of office of the Fund Management Council must not exceed five years. The Fund Management Council is composed of a chairman, a vice chairman and members.

2. For a fund established on the basis of donated or bequeathed properties, the number of members being organizations or individuals representing these properties must not exceed one third of total members of the Fund Management Council.

3. The Fund Management Council has the following tasks and powers:

a/ To approve operation orientations of the fund;

b/ To promulgate regulations on the management and use of the fund’s revenues;

c/ To approve the limits of expenditures on fund management, financial plans and settlement reports of the fund;

d/ To decide on the appointment or dismissal of the director and chief accountant of the fund;

e/ To decide on the organizational structure of the fund;

f/ To propose to competent state agencies changes in the fund’s establishment license or charter;

g/ To decide on other matters in accordance with the charter of the fund and the provisions of law.

4. The Fund Management Council works on a collective basis and its working regulations specified in the charter of the fund.

Article 16.- Chairman and vice chairmen of the Fund Management Council

The chairman of the Fund Management Council is a Vietnamese citizen elected by members of the Fund Management Council by majority vote; the term of office of the chairman coincides with the term of the Fund Management Council. The chairman shall preside over meetings of the Fund Management Council and administer the implementation of resolutions of the Council’s meetings. The chairman is assisted by vice chairmen; the functions and tasks of the chairman and vice chairmen are specified in the charter of the fund.

A foreigner who has made great contributions to the operation of the fund may be elected the honorary chairman of the fund, if so voted by more than half of members of the Fund Management Council.

Article 17.- Fund director

1. The director of the fund is a Vietnamese citizen appointed by the chairman of the Fund Management Council under the decision of the Fund Management Council; the term of office of the director must not exceed five years. The director is the representative-at-law of the fund and bears responsibility for all activities of the fund.

2. The director shall run all activities of the fund; and follow the spending limits of the fund in accordance with resolutions of the Fund Management Council, the fund’s charter and legal provisions.

3. The director shall issue documents within the ambit of his/her management responsibilities and take responsibility for his/her decisions.

4. The director shall periodically report on the operation of the fund to the Fund Management Council and the agency competent to decide on the establishment of the fund.

5. The director shall manage the fund’s property according to its charter and legal provisions on financial and asset management.

6. The director shall propose the chairman of the Fund Management Council to appoint deputy directors and heads of attached units.

Article 18.- Fund Control Board

1. A fund must have a Control Board. A Control Board is composed of at least three members, including a head, a deputy head and member(s). The chairman of the Fund Management Council shall set up the Control Board and appoint its members at the proposal of the Fund Management Council. For funds with an annual operation fund of less than VND 100,000,000 (one hundred million dong), the Management Council shall perform the fund control function.

2. The Control Board operates independently and has the following tasks:

a/ To inspect and supervise the operation of the fund in accordance with the charter of the fund and legal provisions;

b/ To report and propose to the Fund Management Council on inspection and supervision results and the financial status of the fund.

Article 19.- Organization and performance of accounting, audit and statistical work

1. The fund must organize and perform accounting, audit and statistical work in accordance with law.

2. It is required to keep a register to record the list of organizations and individuals that make contributions or donations and the list of beneficiaries.

Article 20.- Establishment and operation of branches and representative offices of the fund

1. A fund may establish its branches or representative offices outside the locality where it is headquartered in accordance with law and the permission of the People’s Committees of the provinces where branches or representatives offices are to be located and the agency that has licensed the establishment of the fund. The Fund Management Council shall decide on the establishment and define the powers and responsibilities of branches or representative offices at the proposal of the Director of the fund.

2. Branches and representative offices are affiliated units of the fund which shall operate under the charter and may only perform tasks assigned by the fund. The fund shall take responsibility for all activities of its branches and representative offices.

3. Branches and representative offices are subject to the state management by the provincial-level People’s Committees or district-level People’s Committees of localities where these branches and representative offices are located.

Article 21.- Mobilization of contributions or donations

1. The fund may campaign for mobilization of contributions or donations at home and abroad for realizing its operation objectives in accordance with its charter and law.

2. For campaigns for mobilization of contributions or donations in foreign countries nationwide or on the scale of a province or centrally run city, mobilization scheme must be prepared and approved in writing by the state management agency which has licensed the establishment of the fund.

3. For campaigns for mobilization of contributions or donations to overcome consequences of natural disasters, floods or storms or to provide emergency relief, the chairman of the Fund Management Council may make decision to conduct these campaigns and shall report them to competent state agencies.

Article 22.- Rights and obligations of funds

1. To be organized and operate under the recognized charter and relevant legal provisions.

2. In the course of operation, to be subject to the state management of agencies in charge of the funds’ operation domains.

3. To conduct campaigns for mobilization of contributions or donations; to receive property donated by domestic and foreign individuals and organizations in strict accordance with their operation principles and purposes and legal provisions.

4. To provide funding in strict accordance with the authorization of individuals or organizations as well as their operation principles and purposes.

5. To provide services and organize other activities by law in order to preserve and increase their property.

6. To use all mobilized money and property for proper purposes and target groups:

a/ For donations, contributions and money raised for overcoming disaster consequences or emergency relief, to distribute all of them immediately after their receipt;

b/ For donations for specific purposes or target groups, to comply with donors’ requests;

c/ For mobilized amounts other than those specified in Clauses a and b of this Article, to ensure the disbursement of at least 70% of the total mobilized amounts within the fiscal year.

7. For funds which are established from property donated or under contracts or testaments without mobilizing contributions or receiving donations, to earmark at least 5% (five percent) of their total property to finance programs and projects relevant to the funds’ operation purposes.

8. To preserve and publicize dossiers, vouchers and documents on their property and financial status, and resolutions and minutes on their operation in accordance with law.

9. To use their property and finances in strict accordance with their operation principles and purposes; to pay taxes, charges and fees and observe the accounting, audit and statistic regime in accordance with law.

10. To lodge complaints and denunciations in accordance with law and submit to the examination, inspection and supervision by state agencies, individual and institutional donors and the community in accordance with law.

11. Annually, to submit reports on the situation of their organization and operation and financial statements to the agency that has permitted their establishment and recognized their charters and the finance agency of the same level, and to publicize the funds’ contributions before March 31 of the following year.

12. When arising any change in their head offices, chairmen, directors or chief accountants, to report the change to the state agency competent to permit their establishment. The amendments to the charter of a fund must be recognized by the state agency that has permitted the establishment of the fund.

13. To exercise other rights and perform other obligations in accordance with law.

Article 23.- Relationship between funds and individuals and organizations related to funds’ activities

1. Funds may have relationships with individuals and organizations to mobilize contributions or donations for themselves or for their specific schemes in accordance with law.

2. Funds may have relationships with localities, organizations and individuals in need of support to formulate funding schemes in accordance with their operation principles and purposes.

Article 24.- Revenue sources of funds

1. Voluntary contributions and lawful donations of individuals and organizations at home and abroad.

2. Revenues earned from the provision of services or other activities according to law.

3. State budget supports for the performance of tasks assigned by competent state agencies.

4. Other lawful revenues (if any).

Article 25.- Use of funds

1. To finance programs and projects for charity or humanitarian purposes, for promoting the development of culture, education, healthcare, sports and physical training and science or for other social purposes for community development in accordance with the charter of the fund.

2. To provide funds under the authorization of individuals or organizations and implement targeted funding projects in accordance with law.

3. To cover expenses for the performance of tasks assigned by the State.

4. To cover fund management expenses.

5. To use idle money to purchase bonds or deposit it as savings.

6. The Ministry of Finance shall specify the use of funds.

Article 26.- Consolidation, merger, splitting, division; and renaming of funds

The consolidation, merger, division, splitting and renaming of funds are carried out in accordance with the Civil Code, this Decree and relevant legal provisions.

Article 27.- Suspension of operation of funds

1. A fund shall be suspended from operation for six months if committing one of the following violations:

a/ Operating for improper purposes or in contravention of its charter recognized by a competent state agency;

b/ Violating state regulations on financial management and publicity;

c/ Organizing its management and administration in contravention of law;

d/ Using targeted donations of organizations or individuals for improper purposes;

e/ Mobilizing donations for purposes other than those specified in its charter.

2. If committing violations specified in Clause 1 of this Article, apart from being suspended from operation, depending on the nature and severity of their violations, funds may be imposed with additional administrative sanctions, if causing damage, they shall pay compensation. Depending on the severity of violations, fund managers shall be handled in accordance with law.

3. If funds can remedy consequences of their violations within the suspension duration of six months, state competent agencies may issue a decision to permit resumption of their operation; if funds cannot remedy the consequences of their violations, the suspension duration shall be prolonged for another six months. Past this time limit, if funds fail to remedy the consequences of their violations, they shall be dissolved.

The agencies competent to permit the establishment of funds may decide on the suspension and resumption of the operation of funds, impose administrative sanctions and transfer dossiers to and request competent agencies to handle violations.

Article 28.- Dissolution of funds

1. A fund may dissolve at its own will or be dissolved.

2. A fund dissolves at its own will in the following cases:

a/ It terminates its operation in accordance with its charter;

b/ Its operation objectives have been fulfilled;

c/ Its operation cannot be continued due to financial reasons.

3. A fund is dissolved in the following cases:

a/ It fails to operate for 12 months in a row or fails to make reports on its organization, operation and finance for two consecutive years;

b/ It fails to comply with requirements set upon its establishment, modifies its establishment license without permission or becomes financially incapable for continuing its operation because its founding members do not contribute their property sufficiently within 12 months after its establishment license is granted and its charter is recognized by a competent state agency;

c/ It falsifies information on accounting or registered account numbers, fails to reach the disbursement level prescribed in this Decree or to comply with reporting requirements prescribed in this Decree and other relevant legal documents;

d/ Past the suspension duration, if the fund cannot remedy the consequences of its violation, its establishment license will cease to be valid;

e/ It violates one of the provisions of Article 7 of this Decree;

f/ It does not dissolve at its own will in the cases specified in Clause 2 of this Article.

4. The Ministry of Home Affairs shall specify the order and procedures for dissolution of funds.

Article 29.- Handling of property of funds upon dissolution

After paying all debts and dissolution expenses, the remaining property of a fund must be remitted into the central budget (for funds established with the permission of the Ministry of Home Affairs) or the local budget (for funds established with the permission of provincial-level People’s Committee or district-level People’s Committee). It is strictly prohibited to disperse funds’ assets.

Article 30.- Responsibilities of state agencies for the consolidation, merger, division, splitting and dissolution of funds; renaming and suspension of operation of funds

The Ministry of Home Affairs shall guide the consolidation, merger, division, splitting and dissolution of funds; renaming of funds; suspension of operation of funds; withdrawal of establishment licenses and seals of funds; and settlement of fund-related complaints and denunciations in accordance with law.

Article 31.- Responsibility of Fund Management Councils for the consolidation, merger, division, splitting and dissolution of funds; renaming and suspension of operation of funds

1. Fund Management Councils shall organize the implementation of decisions on the consolidation, merger, division, splitting and dissolution of funds; renaming of funds.

2. The handling of property and settlement of financial matters upon consolidation, merger, division, splitting and dissolution of a fund complies with the charter of the fund and law.

Article 32.- Complaints and denunciations

Funds may make complaints and denunciations in accordance with law. Pending the settlement of complaints about decisions on their operation suspension or dissolution or withdrawal of their establishment licenses or seals, funds may not operate.

Article 33.- Responsibilities of the Ministry of Home Affairs

1. To formulate and propose to competent authorities to promulgate or promulgate according to its competence legal documents on funds.

2. To provide guidance on the implementation of the law on funds to ministries, ministerial-level agencies, government-attached agencies and provincial/municipal People’s Committees.

3. To exercise the competence defined in Clause 1, Article 14, of this Decree.

4. To assume the prime responsibility for, or coordinate with ministries, ministerial-level agencies or government-attached agencies in, performing the state management of the organization and operation of funds.

5. To carry out examination, inspection and supervision of the organization and operation of funds.

6. To assume the prime responsibility for, and coordinate with agencies in, settling complaints and denunciations and handling violations.

7. To review the situation of organization and operation of funds and report it to the Prime Minister.

Article 34.- Responsibilities of the Ministry of Finance

1. To assume the prime responsibility for, and coordinate with concerned agencies in, promulgating the model regulation on financial management of funds and provide implementation guidance to local finance agencies.

2. To carry out examination, inspection and supervision of financial activities of funds; settle complaints and denunciations and handle financial violations committed by funds established with the permission of the Ministry of Home Affairs.

Article 35.- Responsibilities of ministries and ministerial-level agencies to funds operating in the domains under the management of ministries

1. To give to the Ministry of Home Affairs written opinions on the establishment, consolidation, merger, division, splitting and dissolution of funds; recognition of the charters of funds; renaming of funds; suspension of operation; withdrawal of establishment licenses; and settlement of complaints and denunciations about funds operating in the domains under the management of ministries or branches.

2. To guide and create conditions for funds to participate in activities under their management in accordance with law.

3. To inspect funds in their observance of regulations on state management of branches or domains, handle and propose competent state agencies to handle violations according to law.

Article 36.- Responsibilities of provincial-level People’s Committees

1. For funds established with the permission of provincial-level People’s Committees:

a/ To perform the state management of the organization and operation of funds specified in Clause 2, Article 14 of this Decree;

b/ To examine, inspect and supervise the observance of law on funds;

c/ To settle complaints and denunciations and handle violations of law related to funds;

d/ To consider and provide support for funds operating in their localities;

e/ To consider and permit funds operating in their localities to receive donations of domestic and foreign organizations and individuals in accordance with law;

f/ To direct provincial-level services and departments, district-level People’s Committees and commune-level People’s Committees in managing funds;

g/ Annually, to review and report to the Ministry of Home Affairs and the Ministry of Finance on the organization, operation and management of funds in their localities.

2. For funds established with the permission of the Ministry of Home Affairs and operating in localities:

a/ To issue documents approving the operation of funds in their localities in accordance with this Decree and relevant legal provisions;

b/ To perform state management through examination and inspection, propose the handling of violations, review and report to the Ministry of Home Affairs on the operations of funds according to law.

Article 37.- Implementation effect

1. This Decree takes effect 15 days after its publication in "CONG BAO."

2. This Decree replaces the Government’s Decree No. 177/1999/ND-CP of December 22, 1999, promulgating the Regulation on organization and operation of social funds and charity funds.

3. Funds lawfully established before the effective date of this Decree are not required to apply for re-establishment permission but must supplement and complete dossiers under this Decree within six months after the effective date of this Decree and send them to competent agencies defined in Article 14 of this Decree.

Article 38.- Implementation responsibilities

1. The Minister of Home Affairs and the Minister of Finance shall, within the scope of their functions, tasks and powers, specify, guide, organize and inspect the implementation of this Decree.

2. Ministers, heads of ministerial-level agencies, heads of government-attached agencies and presidents of provincial/municipal People’s Committees shall implement this Decree.