The Ministry of Planning and Investment will submit a draft decision to the Prime Minister on the criteria needed for companies to be called ‘group’ or ‘corporation’.
The charter capital requirement for a company to be named as a group would be VND1 trillion.
The new criteria would be applied to limited and joint stock companies in Vietnam, both private and state-owned, which are set up and operate in line with the Law on Enterprises.
Under the draft decision, only limited and joint stock companies which have charter capital of at least VND1 trillion (USD47.85) and own over 50% charter capital of at least five other companies would be allowed to call themselves 'groups'.
Limited and joint stock companies which have charter capital of more than VND500 billion (USD23.92 million) and own over 50% charter capital of at least three other firms would be entitled to use the name ‘corporation’. Both titles would be subject to the PM's permission.
Currently, many companies abuse the name of corporation and group.
According to the Ho Chi Minh City Department of Planning and Investment, the city has around 30 companies which have charter capital of VND1 trillion; around 100 have the capital between VND1 trillion and VND5 trillion (USD239.2 million); 20 have more than VND5 trillion. The highest capital rate of a company in the city is VND13 trillion (USD622 million).
Based on the new criteria, roughly 150 companies in the city could be named as groups, given the PM's approval.