Decree 366/2025/ND-CP: On Management and Investment of State Capital in Enterprises

Overview

Decreed 366/2025/ND-CP was issued by the Government on December 31, 2025, concerning the management and investment of state capital in enterprises, effective from January 01, 2026. This document was developed to complete the legal system on state capital management, enhance capital utilization efficiency, and improve the competitiveness of state-owned enterprise sector.

Scope and Applicable Subjects

The decree regulates management, investment, and utilization activities of state capital in enterprises, including:

• 100% state-owned enterprises: State-owned corporations, parent companies in economic groups, single-member limited liability companies with 100% state-owned charter capital
• Enterprises with state capital contribution: Joint-stock companies, limited liability companies with two or more members having state shares or capital contribution
• State ownership representative agencies: Ministries, ministerial-level agencies, provincial People's Committees assigned to manage state capital
• Related organizations and individuals: Representatives of state capital, members of the board of directors, supervisory board, and enterprise management board

Principles of State Capital Management

The decree establishes fundamental principles in managing state capital in enterprises:

• Functional separation: Clear distinction between state management function and state capital ownership representation function
• Transparency and disclosure: Information about state capital, business results, and related transactions must be publicly disclosed as prescribed
• Efficiency and sustainability: State capital investment must ensure economic and social efficiency and environmental protection
• Accountability: State ownership representative agencies and enterprise managers must be accountable for their decisions

State Capital Investment Process

The decree provides detailed regulations on the process of investing state capital in enterprises:

Investment Planning

• State ownership representative agencies develop medium-term and annual state capital investment plans
• Plans must align with socio-economic development strategies and state financial capacity
• Priority investment in key sectors critical to national security and public interest

Appraisal and Approval

• State capital investment projects must be appraised for feasibility and socio-economic efficiency
• Approval authority is decentralized according to investment scale and value
• Large and important projects must be approved by the Prime Minister or National Assembly

Investment Implementation

• Enterprises receiving investment capital must use it for correct purposes, efficiently, and on schedule
• State ownership representative agencies supervise and inspect investment implementation
• Periodic reporting on capital utilization and investment results

Management and Utilization of Capital at Enterprises

The decree stipulates requirements for managing and utilizing state capital at enterprises:

Capital Preservation and Development

• Enterprises are responsible for preserving and developing assigned state capital
• State capital must not be used for lending or capital contribution in violation of regulations
• Ensure capital safety ratio, solvency, and capital utilization efficiency

Profit Distribution

• Profit distribution must comply with legal provisions and company charter
• Priority for reinvestment to develop production and business
• State budget contribution as prescribed for after-tax profit portion

Asset and Capital Disposal

• Purchase, sale, and liquidation of large assets must be approved according to authority
• Related-party transactions must be public, transparent, and at market prices
• State capital transfer in violation of regulations is prohibited

Performance Evaluation

The decree establishes a performance evaluation system for state-owned enterprises:

• Financial indicators: Return on equity (ROE), return on total assets (ROA), solvency
• Non-financial indicators: Legal compliance, social responsibility, environmental protection, human resource training
• Evaluation results: Serve as basis for appointing, dismissing managers and adjusting business strategies

Responsibilities of Involved Parties

State Ownership Representative Agencies

• Develop strategies, plans for investment and management of state capital
• Appoint and dismiss representatives of state capital
• Supervise and evaluate enterprise performance
• Report to the Government and Prime Minister on capital management situation

State-Owned Enterprises

• Organize governance according to law and company charter
• Use state capital efficiently and for correct purposes
• Periodically and extraordinarily report on financial situation and business results
• Submit to supervision, inspection, and examination by competent authorities

State Capital Representatives

• Protect legitimate rights and interests of the state as capital owner
• Fully participate in meetings and vote according to state ownership representative agency guidance
• Supervise enterprise management board activities
• Promptly report arising issues related to state capital

Significance for SME Enterprises

Although the decree primarily regulates state-owned enterprises, private SMEs should note:

• Cooperation opportunities: Understand state partners' capital management processes to build effective cooperation plans
• Competitive environment: Grasp performance regulations to assess state-owned enterprises' competitive capacity
• Transaction transparency: Transactions with state-owned enterprises must ensure publicity and transparency according to new regulations

Conclusion

Decreed 366/2025/ND-CP marks an important step in completing the state capital management system, toward transparency, enhanced efficiency, and accountability. SMEs should monitor detailed guidance documents to fully grasp new regulations and adjust business strategies accordingly.