Date : June 22 , 20 11
To : LIN Center for Community Development
Cc : Sesto E. Vecchi
From : Hoang Thi Bich Ngoc
Re : Establishing a legal entity to pursue charitable activities in Vietnam
Dear LIN Center :
Below is our discussion on the conditions and steps for establish ing a non -prof it
organization for ch aritable activities in Vietnam .
Several forms of non -profit organization s that may carry out charitable purpose s are :
Social relief establishment s (“SRE ”);
Charitable fund s (“Fund ”);
International non -governmental org anization s (“INGO ”);
Scientific and technological organization s (“STO ”); and
Volunteer Group s.
These organizations are different in term s of their establishment, operation al purposes,
functions, and state management . For example, t he essential difference between an SRE
and a Fund is that an SRE directly assists people in difficult situations , whereas a Fund
only finance s such assistance . An INGO that is set up in a foreign country may carry out
its activities in Vietnam once it obtain s an appropriate perm it. The main purpose s of an
INGO ’s activities are to support development and to provide humanitarian aid.
I. Social relief establishment (SRE )
The purpose of an SRE is to assist individual s experiencing social difficulties , such as :
orphans, abandoned ch ildren, HIV/AIDS -infected children, lonely elderly persons,
seriously disable d persons , HIV/AIDS -infected persons in poor household s, victims of
domestic violence, sexually abused victims, trafficking victims, and victims of forced
labor. There are many o ther groups of persons that may qualify for such assistance .
An SRE may be established by the State, by one or more organizations, or by individuals.
A foreign organization or individual may establish and operat e an SRE in Vietnam . The
State of Vietnam en courages both onshore and foreign organizations and individuals to
establish SREs in Vietnam. The SRE Departm ent is in charge of SREs and is in the
Ministry of Labor , Invalids, and Social Affairs (“ MOLISA ”).
The establishment, operation, and liquidation o f SREs is regulated by:
Government Decree 68/2008/ND -CP dated May 30, 2008 on Conditions and
Procedures for Establish ing , Oper ating , and Liquid ating Social Relief
Establishment s (“Decree 68 ”); and
Circular 07/2009/TT -BLDTBXH dated March 30 , 2009 of the Mi nistry of Labor ,
Invalids, and Social Affairs implementing Decree 68 (“ Circular 07 ”).
1. Conditions for establish ing an SRE
An SRE must satisfy the following conditions:
On average , land are a approaches a threshold of 30 square meters per beneficiary
in rural areas or 10 square meters per beneficiary in urban areas ;
On average , accommodation area must be six square meters per beneficiary . For
beneficiaries who need around -the -clock care, the average accommodation area
must be eight square meters per beneficiary;
An SRE that car es for 25 or more beneficiaries must have a residential area,
kitchens, working offices for staff, relaxation and recreation area s, water supply ,
drainage systems, electricity systems, and internal roads;
An SRE that cares for between 10 and 25 beneficiaries must ensure basic
conditions in relation to accommodation s, kitchens, staff offices, electricity , and
An SRE’s personnel must comply with the law as to the number of beneficiaries
that one employee may care for.
2. Procedures for establish ing an SRE
Depending up on the scope of its operation s, an organization/individual must obtain
approval from one of the following licensing authorities in order to establish an SRE ::
the Chairman of the provincial Peoples’ Committe e for a n SRE that operate s
throughout a province. The application must be submitted to the provincial
Department of Labor, Invalids, and Social Affairs (“ DOLISA ”); or
the Chairman of the district Peoples’ Committee for a n SRE that operates solely
in a part icular district. The application must be submitted to the Division of
Labor, Invalids, and Social Affairs.
The application should include the following documents:
Application to establish an SRE;
Plan s to support the establishment of the SRE , which inclu de : objectives and
tasks , the establishment and operation plan s, a description of beneficiaries; the
organizational structure (staff, payroll) , office (location, design) and necessary
equipment an d facilities , and a funding plan . There are no specific for ms to
follow. This should take the form of a narrative of essential information with
necessary enclosures .
Rules of operation of an SRE. The rules should cover: the responsibilities of the
director and the various departments , the responsibilities of the key staff , the
responsibilities and interes ts of beneficiaries , property and mechanism s for
financ ial managemen t, and other management matters. Some of these detail s may
be set out in a document like a charter or internal operating rules ;
Documents that relat e to land use rights and ownership of houses or assets
attached to the lan d where the SRE will be located. Leases are acceptable as well.
Letter from the Peoples’ Committee of the ward where the SRE will be locate d.
The letter must confirm that the P eoples’ Committee agree s with the SRE’s
The SRE’s director ’s curriculum vitae. The curriculum vitae must be certified by
the Peoples’ Committee of the ward where the director resides.
The regulatory time frame for the authorities to examine the application is 15 working
days and the time frame for issu ing the decision to establish an SRE is 20 working days.
In practice, it will take longer.
II. Social Fund/Charity Fund (Fund) 1
A Fund is a legal entity that ha s its own seal, bank account, a nd logo. Its purpos e is to
develop and support various activities, e.g. cultur al, education al, health, athletic,
scientific , charit able , and humanitarian activities. A Fund may undertake various
programs and projects and it operates on the basis of the fol lowing principles:
its purpose s and its operation s are not -for -profit;
it is voluntar y, self -financing , and it is responsible for its own undertak ing s;
it operate s under a charter that has been recognized by the agency that licenses it;
it make s publi c all revenues and expenditures and is financially transparent .
The establishment and operation of a Fund are regulated by:
Government Decree 148/2007/ND -CP dated September, 25, 2007 on the
Organization and Operation of Social Funds and Charity Funds (“ Decree 148 ”);
Circular 09/2008/TT -BNV dated December 31, 2008 of the Ministry of Home
Affairs implementing Decree 148 (“ Circular 09 ”); and
Circular 10/2008/QD -BTC dated February 12, 2008 of the Ministry of Finance
promulgating the Regulation of Financial Ma nagement of Social Funds and
Charity Funds (“ Circular 10 ”).
1 Decree 148 neither defines nor makes a distinction between a Social Fund and a Charity Fund. They are
collectively referred to as “Fund” in Decree 148.
1. Conditions for establish ing a Fund
A Fund’s founding member (s) may be Vietnamese or foreign individuals /organizations.
Specifically , they must be:
Vietnamese citizens who are 18 years or older and who have full civil capacity;
Vietnamese entities or foreign invested enterprises ; or
Foreign individuals or foreign organizations. Note that a foreign individual or
organization cannot set up a Fund by itself. It may do so , however, in coo peration
with one or more Vietnamese individual s or organization s.
Founding members must commit to mak ing financial contribution s at a specific level .
Under Circular 09 . A Fund has members that are either foreign invested companies,
foreign individuals, or foreign organizations, must have the following minimum value of
Fund operating only in a ward : VND 1 billion;
Fund operating only in a district : VND 2 billion;
Fund operating only in a province : VND 5 billion; and
Fund operating throughout the country : VND 10 billion;
2. Procedures for establish ing a Fund
For a Fund that operates throughout Vietnam or in at least two provinces or a Fund that
receives contributions from foreign individuals/organizations in cooperation with
Viet namese individuals/organizations , the founding members must obtain approval from
the M inister of the Ministry of Home Affairs . For other Funds, the founding members
must seek approval from the chairman of the provincial Peoples’ Committee.
An application to establish a Fund must include the following documents:
Application to establish a Fund;
Draft of the Fund’s c harter;
Plan to establish and operat e the Fund . The main intended activities of the Fund
should be indicated in the plan ;
Evidence prov ing tha t the Fund will have an office (e.g. Memorandum of
Understanding from a prospective landlord) ;
Commitment to contribute assets necessary for establish ing the Fund; and
Documents prov ing the founding members’ status es (e.g. their juridical record s).
If a F und is established according to a will or authority from an organization, a certified
copy of the will or a certified copy of the delegation of authority is required.
The regulatory time frame for the licensing authorities to consider and then issue a n
Es tablishment License for a Fund is 60 working days from the date the application is
received . As in the case of an SRE, it may take longer in practice .
Upon receipt of the Establishment License, a Fund may begin to operat e as soon as it
satisfies the follo wing conditions:
establish es a bank account to receive capital contribution s;
has an office; and
ha s announce d its establishment in three consecutive editions of a newspaper.
The Fund ’s operation must comply with the management requirements stipulated in
Decree 148. For example, a Fund must have a Management Committee and Control
Committee. The Chair person of the Management Committee must be a Vietnamese
III. International non -governmental organization (INGO )
An INGO is an international non -go vernmental organization that is established in a
foreign country . The People’s Aid Coordination Committee (“ PACCOM ”) is the State
body that licenses and manages INGOs. PAC COM has officers who are in charge of
INGOs from different geographic areas, e .g. Eur ope, North America, and the Asia -Pacific
region. PACCOM’s headquarter s are located in Hanoi and it has a branch in Ho Chi
An INGO may operate under any one of three different permits : ( 1) a Permit to Operat e;
(2) a Permit to set up a Project Of fice; and ( 3) a Permit to establish a Representative
Office. A Permit to establish a Representative Office (“RO”) is very difficult to obtain. It
seems that PACCOM will issue an RO license only to INGO s that have world -wide
recognition or a long record in Vietnam . In other cases, an INGO must follow a three –
step procedure: ( 1) apply for a Permit to Operat e and then operate for a period of time;
(2) apply for a Permit to set up a Project Office and then operate for a period of time; and
(3) apply for a Perm it for a Representative Office.
The establishment and operation of INGOs is regulated by Decision 340/TTg dated May
24, 1996 of the Prime Minister on the Operation of INGOs . See also Guidelines 06/UB –
PA of the PACCOM dated August 1996.
1. Permit to O perate
In order to obtain a Permit to Operate , an INGO must have : (i) legal person status
according to the laws of its home country ; (ii) clear internal statutes, mandates , and
objectives; and (iii) already conducted or plan ned to conduct development or
humanitarian projects and/or programs in Vietnam.
The application for issuance of a Permit to Operat e includes:
Application letter ;
Charter of the INGO ; and
Document certifying the INGO’s legal status (e.g. Establishment Certificate) . It
may be a notariz ed copy.
2. Project Office
In order to set up a Project Office, an INGO must obtain a Permit to Operate and must
have projects and/ or programs that have already been approved by competent Vietnamese
authorities. T he scope and nature of the projects or p rograms require regular on -site
administration and supervision.
The application to set up a Project Office should contain :
Application letter , which among other things, must provide the r easons for set ting
up a Project Office , its intended address, and the number of the Project Office’s
expatriate and Vietnamese employees ;
Charter of the INGO ;
Document certifying the INGO has legal status ( e.g. Establishment Certificate) ;
Profile of person who will be chief of the Project Office; and
Approval by appropri ate Vietnamese authorities o f the projects/programs.
3. Representative Office
In order to establish a Representative Office, an INGO must fulfill the conditions
described above for setting up a Project Office. Additionally, it must : (i) h ave conducted
effective programs and/or projects in Vietnam for at least two years , (ii) agree d to comply
with Vietnamese law; and (iii) h ave feasible assistance projects and/or programs that will
extend for two years or more and that have been approved by the competent authorities.
The application for a Representative Office should include:
Application letter that, among other things, must indicate the reasons for set ting
up a Representative Office and the number of the Representative Office’s
expatriate and Vietnames e employees ;
Charter of the INGO ;
Document certifying the INGO’s legal status (e .g. Establishment Certificate);
Approval the Vietnamese authorities on projects/programs ;
Report on prior operation in Vietnam for at least two years; and
Pr ofile of person wh o will be chief of the Project Office and his/her letter of
The regulatory time for PACCOM to examine and decide to issue a Permit to Operate , to
set up a Project Office, or to establish a Representative Office is 30, 60, and 90 days
respecti vely. In practice, expect that it will take longer because PACCOM may
investigate and assess the activities of the INGO. For that reason, it is often better to
provide additional information in order to facilitate the assessment.
An ass ociation is a voluntary organization of Vietnamese citizens or organization s
conducting the same business , having the same interest s, or that are united by a common
goal . It operate s to protect and advance the lawful rights and interests of its members and
the community. The members of an association support each other. Associations may
exist for various reasons , e.g. animal/environment al protection, cultural activities ,
educational activities, professional activities, or sport s activities . An association m ay
raise funds from membership fees and revenues from its business and services. It is also
permitted to receive donations from domestic and foreign individuals/organization s.
The establishment, operation, and management of associations are regulated by
Government Decree 45/2010/ND -CP dated April 21, 2010 (“ Decree 45 ”).
According to Decree 45, an association is a legal entity. Its members are Vietnamese
individuals or entities, including foreign invested enterprises. Decree 45 does not mention
foreign e ntities or individuals. It seems that offshore entities/individuals are not permitted
to participate in or set up an association in Vietnam. In practice, there are various
associations that are established or participated in by foreign individual s residing in
Vietnam. It is likely that these groups are not registered as association s under Decree 45.
1. Condition s for establish ing an association
An association must satisfy the following conditions:
Have legitimate operation al purposes. It ’s name and main activity must not be
identical to any association that ha s been established in the same locality;
Have a charter;
Have a head office; and
The number of Vietnamese citizens and entities that apply to join and establish
the association meets the specific req uirement s set forth in Decree 45. For
example, a national association must have at least 100 members in many
provinces and a provincial association must have at least 50 members residing in
2. Procedures for establish ing an association
Befo re establish ing an association, the founding members must set up a board to
campaign for the association’s establishment (“ Campaign Board ”). This Board will: (i)
mobilize individuals/organizations to join the association , and (ii) prepare an application
for the establishment of the association.
The application for issuance of a permit for establishment of an association includes the
Application for establishment;
Charter of the association;
Operation plan s of the association;
List of Campaign Board members;
Judicial record of the leader of the Campaign Board;
Document to prove the location of the association; and
List of assets (if any) that the founding member s have voluntarily contribute d to
The authorities respons ible for licens ing an association are:
the chairman of the provincial Peoples’ Committee for an association that
operates within a province ; and/or
the minister of the Ministry of Home Affairs for an association that operates
throughout Vietnam or in at least two provinces .
The regulatory time frame for the licensing authorities to consider and license an
association is 60 days.
The Campaign Board must hold a meeting to establish the association within 90 days
from the date a permit is issued . If the m eeting is not convened within 15 days after the
90 -day deadline , the Board must request an extension from the licensing authorities . An
exten sion may not exceed 30 days. Failure to convene a meeting within the extended
period of time will invalidate the pe rmit.
V. Scientific a nd Technological Organization ( STO)
Under the Law on Science and Technology, individual s or organization s that satisfy
required conditions may set up an STO. In addition to STOs set up by local individuals or
organizations, an S TO ma y be a research and development organization having foreign
investment capital for non -profit purposes . It may also be a scientific and technological
service organization with foreign invest ed capital.
The establishment and operation of STOs are descri bed in the following regulations:
Law on Science and Technology;
Government Decree 81/2002/ND -CP dated October 17, 2002 implementing the
Law on Science and Technology (“ Decree 81 ”); and
Circular 02/2010/TT -BKHCN dated March 18, 2010 of the Ministry of Sci ence
and Technology providing guidance on the establishment and registration of
STO s (“Circular 02 ”).
Besides, foreign investment on STOs must comply with:
Government Decree 80 /20 10 /ND -CP dated July 14, 20 10 on foreign investment
in science and technolog y sector ; and
Circular 01 /201 1/TT -BKHCN dated March 1 6, 201 1 of the Ministry of Science
and Technology on establishment and registration of foreign invested STOs .
STOs are categorized into: (i) scien tific research organizations , (ii) scien tific research a nd
technology development organization s, and (ii i) scien tific service and technology
organization s. STOs in categories (i) and (ii) may be institution s, center s, laborator ies ,
research and observation stations, or experimental station s. STOs in categor y (iii) may
be centers or offices .
1. Conditions for set ting up a n STO
An STO must meet specific conditions that may apply to its operating sector. For
example, a chemical laboratory may need to comply with particular regulations involving
chemical s. An ST O must also satisf y the following general conditions :
Its objectives and operation s are compliant with the law;
It has a charter;
It has a sufficient number of science and technology personnel that are qualified .
It must have at least five staff members with at least an undergraduate degree . At
least 20% of them must hav e professional qualifications in the STO ’s domain , and
at least 40% of them must work on a full -time basis. If an STO is an institute or
on a national, ministerial , or provincial level , the head of the STO must have a
degree that is a Ph.D . or higher.
It has a head office and appropriate technical equipment/facilities (e.g . workshop,
laboratory, machines, intellectual propert y, and equipme nt) to support its
activities. The registered charter capital (in the form of cash or assets) must not be
less than VND 200 million. A n STO must have a head office of at least 25 square
meters that is located within Vietnam.
2. Procedures for establish ing an STO
The application for establish ing an STO mu st include the following documents:
Application made on a standard form;
Resolution to establish the STO;
Charter made on a standard form ;
Curriculum vitae s, scientific curriculum vitae s, diploma s, and job application s of
the leader s of the STO ;
The list of the STO’s personnel . If the STO is not established by a state agency,
the following additional documents are required: the personnel’s curriculum
vitae s, diploma s, and job application s;
Notarized copy of the Certificate on Land Use Rights o f the premise s on which
the STO’s head office is located and /or the lease agreement of the STO’s head
office ; and
List of physical and technical equipment/facilities . If the STO is not established
by a state agency, the following additional documents are required: comm itment s
of capital contribution, minutes of the meeting in which the founding members
determine d the value of the capital contribution.
The licensing authorities for an STO are either the Ministry of Science and Technology
or the Provincial Department of Science and Technology . The Ministry of Science and
Technology registers: (i) STO s established by the Government , (ii) STO s established
under decisions by the Prime Minister or by ministers or provincial -level People’s
Committee chairpersons as authorized by the Prime Minister , (iii) STO s established by
decision of the National Assembly, the Supreme People’s Court or the Supreme People’s
Procuracy , (iv) STO s established by decision s of central -level political organizations o r
socio -political organizations , and (v) f oreign -invested STO s. The Provincial Department
of Science and Technology registers all other STOs.
The regulatory time frame for the licensing authorities to consider and license an STO is
15 working days.
VI. Volunteer group s
We are not awar e of any regulation s that specifically control the establishment, operation,
and fundraising of volunteer groups. Article 90.5 of the Law on the Organization of
Peoples’ Committees and Peoples’ Councils stipulates that a provincial Peoples’
Committee is in charge of the management and guidance of the social and charitable
activities in the province. Some provinces, e.g. Hanoi City, Ho Chi Minh City, Yen Bai
province, have issued guidance on certain types of volunteer activities. A volunteer group
may want t o begin with the provincial Peoples’ Committee in order to seek detailed
There are no specific provision s governing the possibility that a volunteer group may
raise fund s to conduct social relief activities. In practice, a n organization cal ls and gather s
donations from its members and then directly give s them to people in difficult
circumstances or transfer s them to an organization that is permitted to mobilize, receive,
and distribute donation s.
VI. Other activities
1. Museum s
Most muse ums are established by the State. Under Government Decree 09/2004/QD –
BVHTT (“ Decree 09 ”) promulgating the establishment and operation of private
museums, an individual or non -state organization may establish a private museum.
Decree 09 is completely silent on whether a museum may be established by a foreign
individual or organization. Decision 156/2005/QD -TTg of the Prime Minister dated June
23, 2005 approving the museum system until 2020 is also silent on this possibility . This
silence likely indicates tha t the action is not permissible . Foreign
individuals/organizations are encouraged , however, to contribute to the development of
the museum system by being sponsors or by providing gifts.
The establishment and operation of a private museum must follow Decr ee 09. A license
is req uired for establish ing a private museum.
2. Galleries (“Triển lãm” in Vietnamese)
In order to open a gallery, a license is required from the Ministry of Culture, Sports, and
Tourism or the provincial Department of Culture, Sports , and Tourism . Procedures for
obtain ing a license are provided in the Governmen t Decree 11/2006/ND -CP dated
January 18, 2006 promulgating the Regulations on Public Culture.
* * *
Provided a bove are various forms of organization s that individuals or organizations may
consider when carry ing out non -profit activities in Vietnam . The se organizations are
man aged by different State bodies and have different establishment requirements .
We hope that the foregoing is helpful.
With best regards,