Recently, the Ministry of Finance has submitted a Proposal to seek the opinion of the Government of Vietnam on the development of a new Draft Decree to abolish Decree 104/2007/ND-CP on debt collection service business. Notably, the abolition includes removing the capital condition regulations for establishing enterprises engaged in debt collection services.
Article table of contents
Decree 104/2007/ND-CP stipulates:
- The statutory capital for the debt collection service business is 2,000,000,000 VND (Two billion VND).- Throughout the operation, a debt collection service business must maintain charter capital not lower than the statutory capital.
However, the current Enterprise Law 2014 no longer mentions the requirement for statutory capital when establishing enterprises (except for some special sectors such as banking, securities, etc.). Thus, the capital requirement is no longer a mandatory business condition. Therefore, abolishing Decree 104 means abolishing the capital condition when establishing a debt collection service business.
In addition, abolishing Decree 104 also leads to the abolition of a series of business conditions for the debt collection service, such as: conditions for the qualifications of managers and branch directors of enterprises, standards for employees in the debt collection service activities, rights and obligations of creditors, debtors, etc.
The Draft Submission states clearly:
Decree 104 stipulates that managers and employees of debt collection service businesses must meet conditions regarding judicial records (such as having full civil act capacity, no criminal record) and professional competence (such as having educational qualifications from college, intermediate level or higher in one of the fields: economics, management, law, security).
While implementing Decree 104, the Ministry of Finance found that, similar to the business activities of enterprises in other sectors, the professional capacity of managers and employees of debt collection service enterprises only affects the performance results of the debt collection service enterprise itself and does not significantly affect the operations of other enterprises or the economy. Hence, it is unnecessary to stipulate conditions on the professional competence of managers and employees in debt collection service enterprises.
Regarding the conditions on the judicial records of managers and employees in debt collection service enterprises, Decree 96/2016/ND-CP already fully stipulates these conditions. Therefore, it is not necessary to add more conditions regarding judicial records for managers and employees in debt collection service enterprises.
Article 4 of Decree 104 stipulates that the principle of debt collection service activities is to implement under the authorization contract signed between the creditor or debtor with the debt collection service enterprise within the scope of rights recognized by law. The authorization contract has been stipulated in section 13 of the Civil Code 2015. The basic rights and obligations of creditors, debtors, and debt collection service enterprises are implemented according to the provisions of the Civil Code.
Moreover, debt collection is a conditional business sector that primarily and necessarily requires conditions regarding security and order. Currently, these regulations are mentioned in Decree 96/2016/ND-CP. Thus, abolishing Decree 104/2007/ND-CP still ensures the strict state management of the Ministry of Public Security regarding this activity, without creating loopholes that could lead to abuse, violations of social order, safety, life, health, and dignity of citizens; and at the same time, it does not affect the rights and obligations of the parties involved in debt collection service activities (creditors, debtors, debt collection service enterprises) when implementing contracts already signed between the parties as stipulated by the Civil Code.
See details:
- Draft Decree to abolish Decree 104/2007/ND-CP HERE;- Draft Submission HERE
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