Vietnam Modernizes Support Regulations for Cooperatives

Post by : Shakul

In a significant policy shift, Vietnam’s Ministry of Finance is revising state support mechanisms aimed at cooperatives and their unions. This initiative is encapsulated in a draft decree that seeks to amend Decree No. 113/2024/ND-CP, which guides the application of the Law on Cooperatives.

Current rules are marred by convoluted processes and stringent eligibility standards, hindering many cooperatives, particularly smaller ones, from securing government aid. These groups often struggle with tight administrative frameworks and tedious approval protocols.

In response to feedback from various local authorities, the ministry has proposed simplified criteria and procedures, aiming to ease access to state programs. The draft advocates for more adaptable regulations that reduce burdensome pre-approval actions.

Under the anticipated changes, cooperatives will be eligible for state support by meeting the Law on Cooperatives criteria and one or more additional development metrics. These metrics could include increases in membership over the past two years, heightened internal transaction values, enhanced contributions to communal funds, growth in common assets, or member and employee participation in educational initiatives.

A special provision is included for newly-founded cooperatives in socio-economically disadvantaged regions, enabling them to access support more readily within their first three years of operation to foster local economic development.

For state budget requests exceeding 3 billion Vietnamese dong, the ministry now mandates that audited financial statements from the prior year be submitted, verified by independent auditors prior to application.

Additionally, several clauses pertaining to eligibility will be eliminated, as similar stipulations will be housed in a new decree currently underway. This change is designed to streamline legal processes for cooperatives seeking assistance.

Beyond eligibility adjustments, the ministry is also revising the application process. Proposed changes would allow cooperatives to send a single application to the People’s Committee at the commune level, with submissions permissible in person, via post, or electronically.

Local authorities are required to acknowledge receipt of applications within seven working days, and they’ll be tasked with gathering annual cooperative support requests for submission to provincial authorities by May 31.

Provincial governments will then evaluate the applications, providing direct support or forwarding requests to central ministries. Notably, requests for smaller services under 20 million VND or short training programs will involve a quicker process, allowing direct applications to service providers.

These proposed reforms are a part of the broader strategy of Vietnam to boost the efficiency of cooperative development policies, bolstering local economies and promoting collective economic engagement nationwide.

#Economy #Asia News #Vietnam #Policy