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- 12 / 05 / 2018 -
Raising investor’s equity ratio in public-private partnership (PPP)

On May 04, 2018, The Government issued Decree No.63/2018/ND-CP on investment in the form of public-private partnership. This Decree took effect since June 19, 2018.

Accordingly, Decree No.63/2018/ND-CP stipulates the principle of determining the owners’ equity ratio as follows:

  1. For projects with a total investment capital up to VND 1,500 billion, the investor’s equity ratio must not be lower than 20% of the total investment capital;
  2. For a project with a total investment capital over VND 1,500 billion, the owner’s equity ratio shall be determined on the following principle: For a capital up to VND 1,500 billion, the equity capital percentage must not be lower than 20%; for a capital of over VND 1,500 billion, the equity capital ratio must not be lower than 10%;
  3. Capital contributed by the State, support capital for the construction of auxiliary works, compensation, ground clearance and resettlement shall not be included in the total investment capital to determine the owner’s equity ratio.

With detailed and specific regulations, compared with the previous documents, Decree No.63/2018/ND-CP was assessed to open up opportunities for greater cooperation for investors, suitable with the government’s open-door policy recently on calling for investment capital from abroad.