Do tontine groups need to notify the state agency in Vietnam? What are tontine holder eligibility requirements in Vietnam?

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Question date: 02/12/2022

Do tontine groups need to notify the state agency in Vietnam? What are tontine holder eligibility requirements in Vietnam? What are rights and obligations of the tontine holder in Vietnam? 

Hi, I have a plan to organize a tontine group to help people raise capital, have capital to do business, I want to know that when organizing a tontine group, do I need to notify the state agency? 

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    • Do tontine groups need to notify the state agency in Vietnam? What are tontine holder eligibility requirements in Vietnam?
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    • 1. Do tontine groups need to notify the state agency in Vietnam?

      In Article 14 of Decree 19/2019/ND-CP, there is notice of organization of tontine group as follows:

      1. The tontine holder must notify the local People’s Committee of commune in writing of organization of a tontine group in any of the following cases:

      a) Organize a tontine group, the value of annuity shares of which at a tontine opening is at least VND 100 million;

      b) Organize at least two tontine groups.

      2. Contents of notice:

      a) Full name, ID number, citizen identity number or passport number, date of birth, place of residence of tontine holder;

      b) Tontine group starting and closing time;

      c) Total value of annuity shares at tontine opening;

      d) Total number of members.

      3. If the information of the tontine group which has been notified as prescribed in Clause 1, Clause 2 of this Article changes, the tontine holder must provide a written update for the local People’s Committee of commune.

      4. If a tontine holder does not fulfill any of obligations prescribed in Clause 1 of this Article, he/she shall face a penalty for administrative violations as per the law.

      Thus, according to the above provisions in Vietnam, when organizing a tontine group, you need to notify in writing the local People’s Committee of commune if the organization has two or more tontine groups or the tontine group has the value of annuity shares of which at a tontine opening is at least VND 100 million.

      2. What are tontine holder eligibility requirements in Vietnam?

      In Article 6 of Decree 19/2019/ND-CP, tontine holder eligibility requirements are as follows:

      1. Tontine holder is a person aged at least 18 years of age and does not lack legal capacity, have limited legal capacity or have limited cognition or behavior control as prescribed in the Civil Code.

      2. If members self-organize a tontine group, the tontine holder is a person who is voted by more than a half of members, unless otherwise agreed by members.

      3. Other requirements as agreed upon among tontine members.

      According to this Article, to be able to own them, you need to fully meet the conditions as prescribed above in Vietnam.

      3. What are rights and obligations of the tontine holder in Vietnam?

      The rights and obligations of the tontine holder are specified in Articles 17 and Articles 18 of Decree 19/2019/ND-CP, specifically as follows:

      Article 17. Rights of the tontine holder

      1. A tontine holder of interest-free tontine has the rights to:

      a) Collect annuity shares of members;

      b) Request members who fail to contribute their annuity shares to refund the annuity shares contributed on their behalf by the tontine holder;

      c) Rights of tontine holder prescribed in Clause 1 Article 7, Article 9, Article 10 and Article 13 of this Decree;

      dd) Other rights as agreed upon.

      2. A tontine holder of interest-bearing tontine has the rights to:

      a) Rights prescribed in Clause 1 of this Article;

      b) Receive annuity shares in the first tontine opening without paying interests to other members if the tontine holder is also a member, unless otherwise agreed.

      3. A tontine holder of commission tontine has the rights to:

      a) Rights prescribed in Clause 1 of this Article in case of interest-free tontine or rights prescribed in Clause 2 of this Article in case of interest-bearing tontine;

      b) Enjoy commissions from annuity-receiving members.

      Article 18. Obligations of the tontine holder

      1. Notify members of the new place of residence which any member changes.

      2. Notify those who wish to participate in tontine groups of sufficient number of tontine groups; annuity shares, tontine opening; number of members of each tontine group which he/she acts as the tontine holder.

      3. Hand over the annuities to the annuity-receiving members at each tontine opening.

      4. Pay annuity shares on behalf of members when members fail to contribute their shares upon the tontine opening, unless otherwise agreed.

      5. Let members see and copy the tontine book and supply information related to the tontine upon request.

      6. Send notices as prescribed in Clause 1 Article 14 of this Decree.

      7. Obligations under Clause 1 Article 12 and Article 13 of this Decree.

      8. Other obligations under agreement or as per the law.

      Thus, tontine holders in Vietnam will have the rights and obligations as prescribed above.

      Best Regards!

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    "This English translation is for reference purposes only and not a definitive translation of the original Vietnamese texts"

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