Vietnam Enacts New Regulations on Public Service Unit Restructuring

The Vietnamese government has issued Decree No. 299/2026/ND-CP, which came into effect on July 28, detailing new regulations on the organization and autonomy of public service units. The decree outlines procedures for the establishment, restructuring, dissolution, transfer, classification, ranking, and organizational autonomy of these entities. The scope of the decree covers public service units under ministries and ministerial-level agencies (excluding those under the Ministry of National Defense and the Ministry of Public Security), provincial-level People's Committees, and commune-level administrations. Notably, newly established public service units are generally required to be self-sufficient in covering their regular operating expenses, with exceptions for those providing basic or essential public services. For units that are self-sufficient in both regular expenses and investment, any newly established subordinate units must also be self-sufficient in both. In cases of mergers or consolidations involving entities with varying degrees of financial autonomy, the autonomy level of the resulting unit will be determined by the competent authority. Restructuring of units that are funded by the state budget for regular expenses or are partially self-sufficient must not increase the number of employees receiving salaries from the state budget beyond the approved limit. Conditions for establishing public service units include alignment with sector-specific planning (if any) or approved development plans, meeting criteria outlined in specialized laws (except for multi-sectoral basic or essential service providers), clear definition of objectives, functions, and tasks, a minimum workforce of 15 people (with exceptions for basic/essential service providers and those established under specialized laws), and for overseas units, compliance with foreign policy and international treaties. Restructuring may occur if a unit's name, functions, or tasks are adjusted to improve operational efficiency and meet minimum workforce requirements. It may also be required if the unit fails to meet establishment criteria, does not achieve its approved financial autonomy plan (unless due to external economic factors or force majeure), or for overseas units, if it is no longer in line with foreign policy and international agreements. The decree also specifies the number of deputy heads for public service units. For units that are self-sufficient in regular expenses and investment, or self-sufficient in regular expenses, the number of deputy heads will be determined by the approved establishment plan or autonomy plan. This new decree is part of Vietnam's administrative reform efforts under its one-party system, aiming to enhance the efficiency of public service units and reduce the burden on the state budget. As Vietnam continues its economic growth, optimizing the public service delivery system is crucial for improving citizens' quality of life and ensuring sustainable development.