The 2025 Law on Management and Investment of State Capital Officially Takes Effect: Enhancing autonomy for state-owned enterprises, improving supervision efficiency
The Law on Management and Investment of State Capital in Enterprises (Law No. 68/2025/QH15) will officially take effect on August 1st, 2025. With the goal of enhancing autonomy and accountability for state-owned enterprises (SOEs), the law also establishes mechanisms for transparent and effective monitoring and inspection to remove barriers for SOEs, thereby contributing to economic growth and development.
With a focus on increasing autonomy and accountability, the Law on Management and Investment of State Capital in Enterprises grants SOEs greater authority. SOEs are now permitted to independently formulate long-term development strategies (5-10 years) and annual business plans, eliminating the need for approval from the state’s representative agency as required previously. This provision addresses delays, enabling SOEs to adapt swiftly to market conditions.
Additionally, the Board of Members or the Chairman of the company is authorized to decide on capital mobilization plans and bear responsibility for their effectiveness. Enterprises only need to report to the state’s representative agency when mobilizing capital exceeding three times their equity. Notably, for the first time, the law allows SOEs to have full authority to determine salary, bonus, and remuneration policies for employees and managers based on the allocated payroll. Furthermore, enterprises can allocate up to 50% of after-tax profits to the Development Investment Fund and up to three months’ salaries to the Reward and Welfare Fund. The law also removes restrictions on SOEs investing in real estate.
Alongside granting greater autonomy, the law strengthens oversight, inspection, and evaluation by the state as the owner of SOEs, enhancing transparency in their operations. The Board of Members or the Chairman is accountable to the Prime Minister and the state’s representative agency for preserving and developing capital. Individuals who fail to fulfill their duties or misuse their authority will no longer serve as representatives of the state’s ownership.
Law No. 68/2025/QH15 also expands its scope, applying not only to enterprises wholly owned by the state but also to credit institutions in which the state holds more than 50% of the charter capital, as well as political and socio-political organizations.
In the context of a rapidly changing global economy, Vietnam has chosen a proactive path to overcome challenges and realize its ambition for rapid and sustainable development. A key solution is institutional reform, with the finance sector playing a pioneering role in establishing a legal framework for socio-economic development, improving state management efficiency, and unlocking all resources.
Expected to be a significant “boost” for the SOE sector, Law No. 68/2025/QH15 reflects a bold reform in SOE management, emphasizing autonomy, reducing administrative interference, and clearly delineating the roles of the state and the market.