HOW DO FOREIGNERS ESTABLISH A CHARITY FUND IN VIETNAM?

I have a foreign friend, who wants to build and run a charity (non-profit) in Vietnam. He wanted me to help with the conditions as well as prepare the documents for the establishment, but I did not understand this issue very well. Looking forward to the lawyer’s answer. Thank you.

FDVN’s Opinions:

Issues related to the organization and operation of social funds and charity funds are specified in Decree 03/2026/NĐ-CP of the Government, effective from  March 1, 2026. Specifically, to establish and operate a charity fund, the following points should be noted:

1. Conditions for establishing a charity fund:

First of all, conditions on purposes and operating rules (Article 5, Decree No. 03/2026/NĐ-CP):

– Funds are established and operate on a not-for-profit basis.

– They operate on the principles of voluntariness, autonomy, self-financing, and self-responsibility before the law with their own assets.

– They are organized and operate in accordance with the law, with their charters acknowledged by competent state authorities.

– They shall ensure publicity and transparency in their organization, operation, revenues, expenditures, and assets.

– Their assets shall not be divided.

Secondly, conditions on founders:

Ensuring that founders establishing a fund are Vietnamese citizens or Vietnamese organizations. For citizens: having full legal capacity, being permanently resident in Vietnam, and having no criminal record; not being subject to criminal prosecution, temporary detention, serving administrative handling measures at a compulsory rehabilitation facility or a compulsory education institution, or being prohibited by a court from holding positions, practicing professions, or performing certain jobs. For organizations: being lawfully established; having a charter or a document defining the organization’s functions and tasks; having a resolution of the collective leadership or a decision of the competent head on participation in the establishment of the fund; having a decision appointing an organizational representative to act as a founder; where a Vietnamese organization has foreign-invested capital, the organizational representative acting as a founder shall be a Vietnamese citizen permanently residing in Vietnam; (Clause 1, Article 13, Decree No. 03/2026/NĐ-CP)

Thus, Since your friend is a foreigner, he cannot establish a charity fund by himself, but can only contribute to establish the fund.

Thirdly, conditions for foreign individuals and organizations to contribute assets with Vietnamese citizens and establish charity funds in Vietnam (Clause 1, Article 14, Decree No. 03/2026/NĐ-CP):

– To make commitments to fulfill tax obligations and assume responsibility for the lawfulness of contributed assets;

– To commit to strictly complying with Vietnamese law and the purposes of operation of the fund;

– To have assets contributed toward the establishment of the fund in accordance with Article 16: amounts of money in Vietnam dong or assets converted into Vietnam dong. If other assets, excluding the amounts of money in Vietnam dong, are contributed to the fund, the amounts of money in Vietnam dong must be accounted  for more than 50% of the minimum levels prescribed in Clauses 2 and 3 of this Article.

– Assets contributed by foreign individuals and organizations for the establishment of a fund shall not exceed 50% of the total assets contributed toward the establishment of the fund as prescribed by this Decree.

Forthly, conditions of operating charity fund (Clause 3, Clause 4, Article 16, Deecree No. 03/2026/NĐ-CP):

– Where foreign individuals or organizations contribute assets together with Vietnamese citizens or organizations to establish a fund, the contributed assets for fund establishment converted into Vietnamese dong shall meet at least the following minimum levels:

a) Funds operating nationwide or inter-provincially: VND 10.800.000.000 (ten billion eight hundred million dong);

b) Funds operating at provincial level: VND 4.600.000.000 (four billion six hundred million dong);

c) Funds operating at commune level: VND 1.200.000.000 (one billion two hundred million dong).

– Contributed assets of founders shall have their ownership transferred to the fund within 45 working days from the date the fund is granted the fund establishment license and the charter is acknowledged. Founders shall commit to and assume responsibility for ensuring that contributed assets for fund establishment are lawful, free from disputes, and not subject to other outstanding financial obligations.

2. Dossiers to establish a charity fund (Article 17, Decree No. 03/2026/NĐ-CP):

A fund establishment dossier (original copy) shall include:

– Application for fund establishment (with enclosed appendices).

– Draft fund charter.

– Written commitment on asset contribution for fund establishment by the founders, together with documents evidencing the contributed assets in accordance with Article 16 of this Decree.

– Personal background records (in the form enclosed with this Decree) of founders establishing the fund, issued no more than 6 months before the date of dossier submission, and documents as prescribed in Articles 13, 14, or 15 of this Decree.

– Document on the election of positions of the Founding Board.

– Documents evidencing lawful rights of use in accordance with the law for the proposed headquarters of the fund (original or certified copies).

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