Strictly prohibit the establishment of charity funds for personal gain, fraud, lending, and money laundering

The Government has just issued Decree No. 03/2026/ND-CP regulating the organization and operation of social funds and charity funds, effective from March 1.

According to the Decree, social funds are non-governmental organizations that individuals and organizations voluntarily contribute a part of their assets to establish or establish through wills, donations, or gifts of assets; are granted a license to establish and recognized by competent state agencies; organized and operated for non-profit purposes to support and encourage the development of culture, education, health, sports, science, technology, innovation, creativity, digital transformation, agriculture, rural areas, resource and environmental protection, social security and the community.

Charitable foundations are non-governmental organizations that individuals and organizations voluntarily contribute a part of their assets to establish or establish through wills, donations, or gifts of assets; are granted a license to establish and recognized by competent state agencies; organize and operate not for profit for charitable and humanitarian purposes; support the overcoming of difficulties caused by natural disasters, fires, epidemics, accidents, and other disadvantaged and disadvantaged groups that need the support of society.

The Decree stipulates that foreign individuals and organizations are allowed to contribute assets with Vietnamese citizens and organizations to establish a fund in Vietnam.

Conditions for foreign individuals and organizations: Must commit to paying taxes and being responsible for the legality of contributed assets; commit to strictly implementing Vietnamese law and the purpose of operation of the fund; have contributed assets to establish a fund according to regulations.

Assets contributed to the establishment of funds of foreign individuals and organizations must not exceed 50% of the total assets contributed to the establishment of funds according to regulations.

The Decree strictly prohibits the exploitation of the establishment, organization and operation of the fund to carry out the following acts:

Activities contrary to the principles and purposes of the fund, affecting the reputation of the State, agencies, organizations, individuals, and communities; causing harm to national interests, security, national defense, the great national unity bloc, the legitimate rights and interests of organizations and individuals.

Harmful social ethics, good customs, customs, traditions, national identity, beliefs, and religions.

For personal gain, fraud, implementation, use of illegal invoices, making documents that are not accurate in reality or colluding with organizations and individuals to evade taxes, commit tax fraud or violate other provisions of the law on finance, taxes, accounting during the establishment and operation of the fund.

Money laundering, terrorist financing and illegal activities.

Forgery, erasure, transfer, lease, lending, pledging, mortgage of a fund establishment license in any form.

Receive deposits, loans, and investment contributions.

Using the state budget, using or supporting assets allocated by the state budget or originating from the state budget to participate in contributing assets to establish a fund.

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