Loans not allowed to go to innovation investment funds
11:26 | 20/03/2018

VGP – The Government recently issued Decree No. 38/2008/ND-CP detailing investments for innovation in small and medium-sized enterprises (SMEs).

The decree guides the investment in innovative SMEs; the establishment, management and operation of innovation investment funds; and the mechanism on using the local budget to invest in innovative SMEs.

The decree clearly states that an innovation investment fund does not have a legal entity and is established by a maximum of 30 capital contributors on the basis of the fund’s charter. An innovation investment fund is not allowed to contribute capital to another fund of the same type. 

The assets contributed may be in Vietnamese dong, gold, the value of land use rights, and other assets that can be valued in Vietnamese dong. Investors are not allowed to use loans to contribute capital to establishing an innovation investment fund. 

An innovation investment fund is managed in one of the following models: a congress between investors and the company that implements management of the fund; a congress between investors, the representative board or the director of the fund, and the company that implements the management of the fund; and a congress between investors, the representative board and the director of the fund, and the company that implements the management of the fund.

The management of the innovation investment fund, as stipulated in this decree, will be implemented in line with the charter of the fund and the contracts signed with the fund (if any), and will not be governed by the law on securities.

Using local budget to invest in innovative SMEs

The decree also provide regulations on using the local budget to invest in innovative SMEs. Specifically, depending on the local budget capability, the provincial-level People’s Committee recommends to the provincial-level People’s Council on assigning the locality’s state financial organization to make investments in innovative SMEs.

Annually, the locality’s state financial organization evaluates, adjusts and announces the list of the selected innovation investment funds on its web portal and on the website of the provincial-level People’s Committee. 

                                                                                                                                    By Vien Nhu

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