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Decree 299/2026/ND-CP officially takes effect from July 28, 2026, replacing... Decree 120/2020/ND-CP, which specifies the cases for reorganizing and dissolving public non-profit organizations (according to compiled information from...). Vietnamese LawFor businesses that have partnerships with public institutions, MAN recommends updating these regulations early to proactively manage operations and risks.
According to Decree 299/2026/ND-CP, public non-business units are dissolved in 4 cases and reorganized in 3 cases as stipulated in Clauses 2 and 3 of Article 5.
Legal basis: Paragraphs 2 and 3 of Article 5 of Decree 299/2026/ND-CP.
3 cases where public non-profit organizations must be reorganized.
According to Clause 2, Article 5 of Decree 299/2026/ND-CP, public non-business units may be reorganized (division, separation, merger, consolidation, or renaming associated with adjustments to position, functions, and tasks) when they fall into one of the following three cases:
- The first: There are adjustments to the location and function of public service units to align with sectoral planning or development plans for the network of public service units by sector and field, while simultaneously improving operational efficiency and ensuring a minimum number of employees.
- Monday: The unit no longer meets the establishment requirements stipulated by specialized laws or fails to maintain the minimum number of employees.
- Tuesday: The unit does not guarantee the level of financial autonomy as per the approved plan. This regulation does not apply if the change stems from adjustments to functions and tasks or from objective reasons (socio-economic fluctuations, natural disasters, epidemics, force majeure) that alter revenue sources and expenditure tasks.
Specifically for public service units abroad, in addition to falling under one of the above cases, the reorganization must also ensure compliance with the foreign policy of the Party and the State, and international treaties or agreements between Vietnam and the host country.
4 cases of dissolution of public non-profit organizations
According to Clause 3, Article 5 of Decree 299/2026/ND-CP, a public non-business unit shall be dissolved when one of the following four cases arises:
- It no longer has the function or responsibility of providing public services or serving state administration.
- Failure to meet establishment requirements, including failure to meet network development plans, establishment criteria under specialized laws, or failure to ensure the minimum number of employees as prescribed.
- There were three consecutive years of failure to complete assigned tasks, as assessed by the competent authority.
- Dissolution should be carried out in accordance with sectoral planning or the development plan for the network of public service units by sector and field.
Similarly to reorganization, public service units located abroad, when considering dissolution, must simultaneously meet the above conditions and be consistent with Vietnam's foreign policy, international treaties, or agreements between Vietnam and the host country.
New points in Decree 299/2026/ND-CP on reorganization and dissolution.
Decree 299/2026/ND-CP inherits the provisions of Decree 120/2020/ND-CP but provides more specific and stringent regulations on the grounds for reorganization and dissolution.
The first notable change is the replacement of the phrase "planning of the network of public service units" with "plan for developing the network of public service units by sector and field" to align with the new management mechanism.
Compare the key changes between the two legal texts:
| Comparison criteria | Decree 120/2020/ND-CP | Decree 299/2026/ND-CP |
|---|---|---|
| Network management basis | Based on the planning of the network of public service units. | Based on the plan for developing the network of public non-profit organizations by sector and field. |
| Conditions for financial autonomy | The restructuring requirements must not reduce the level of financial autonomy. | Failure to ensure the level of autonomy as outlined in the approved plan is grounds for reorganization, except in cases of objective circumstances or force majeure. |
| Additional grounds for dissolution | The general rule is that the establishment criteria are not met. | Further details include failure to meet network development plan requirements and minimum workforce quotas. |
Compliance notes and expert perspective from MAN
These changes may affect businesses that have partnerships, are implementing public-private partnership (PPP) projects, or have service contracts with public institutions.
The team of legal and accounting experts at MAN – Master Accountant Network recommends that businesses take note of the following:
- Review of public sector partnerships: Proactively inspect the operational status and the extent to which public service units that are business partners or recipients of funding or contracts meet the criteria.
- Contract risk assessment: In cases where a partner is at risk of dissolution (such as failing to meet targets for three consecutive years), MAN recommends that businesses proactively prepare plans for debt reconciliation and timely contract liquidation. This is similar to the process of due diligence. conditions for dissolving a business, Clarifying the financial responsibilities of the parties involved is an extremely important step in protecting legitimate rights.
Action recommendations for businesses
Decree 299/2026/ND-CP provides more specific regulations on the grounds for reorganization and dissolution of public non-business units compared to before. To ensure legal safety and optimize financial operations, businesses should review their list of public partners.
Additionally, when there is a need to restructure the organization or carry out procedures. business dissolution, Businesses can refer to the details below. company dissolution process Or seek professional advice from reputable consulting firms when necessary.
