Vietnam: How much is the bankruptcy fee paid by enterprises when carrying out bankruptcy procedures? Which agency has the competence in bankruptcy settlement?
In what case is it considered an insolvent enterprise in Vietnam?
Pursuant to the provisions of Clause 2, Article 4 of the Bankruptcy Law 2014, bankruptcy is a legal status of an insolvent entity that is declared bankrupt by the People’s Court.
Pursuant to Clause 1, Article 4 of the 2014 Bankruptcy Law, an insolvent enterprise or insolvent cooperative (hereinafter referred to as insolvent entity) is an enterprise or a cooperative having failed to meet the debt liability for 03 months from the deadline for repayment.
Thus, an enterprise or cooperative is only considered bankrupt when that enterprise or cooperative fails to meet the debt liability for 03 months from the deadline for repayment and is declared bankrupt by the People’s Court.
How much is the bankruptcy fee paid by enterprises in Vietnam when carrying out bankruptcy procedures?
Pursuant to the provisions of Article 22 of the Bankruptcy Law 2014 as follows:
Bankruptcy fee
The requesters must pay the bankruptcy fee according to the regulations of the Law on court fees of the People’s Court. The requesters prescribed in Clause 2 Article 5 and Point a Clause 1 Article 105 of this Law is exempt from paying this fee.
According to Section B.3 List of court costs and fees issued together with Resolution 326/2016/UBTVQH14, the fee for filling applications for opening bankruptcy procedures is VND 1,500,000.
However, according to Point a, Clause 2, Article 11 of Resolution 326/2016/UBTVQH14, the following entities are not required to pay for the court cost and fee advances and are not subject to court fees:
+ Laborers who request the courts in writing to open procedures for bankruptcy of enterprises or cooperatives mentioned in clause 2, Article 5, clause 1a, Article 105 of the Law on bankruptcy
+ Any employee, internal Trade Union (or the superior Trade Union if the internal Trade Union is not established) is entitled to send a written request for initiation of the bankruptcy process after 03 months from the day on which the entity has to pay salaries and other debts to the employees (as prescribed in Clause 2, Article 5 of the Bankruptcy Law 2014).
+ The applicant requests the initiation of the bankruptcy process is submitted in accordance with the regulations in Clauses 3, 4, and 5 of this Law but the insolvent entity cannot afford the bankruptcy fee and bankruptcy advance (as prescribed at Point a, Clause 1, Article 105 of the Bankruptcy Law 2014).
Which agency has the competence in bankruptcy settlement in Vietnam?
Pursuant to Article 8 of the 2014 Bankruptcy Law on competence in bankruptcy settlement as follows:
- The district People’s Court has the competence in bankruptcy settlement for enterprises and cooperatives of which the headquarters are located in the district
- The People’s Court of central-affiliated cities and provinces (hereinafter referred to as the provincial People’s Court) has the competence in bankruptcy settlement for enterprises and cooperatives registered in the province and for one of the following cases:
+ There are overseas assets or involving entities.
+ The insolvent entity has branches and/or representative offices located in districts and/or cities of various provinces;
+ The insolvent entity has real estate in districts and/or cities of various provinces;
At the same time, Clause 1 Article 2 of Resolution 03/2016/NQ-HDTP and Clause 1 Article 3 of Resolution 03/2016/NQ-HDTP specify overseas assets and complicated bankruptcy cases under the jurisdiction of Provincial People's Courts as follows:
- Overseas assets refer to assets defined in regulations of the Civil Code and located outside the territory of the Socialist Republic of Vietnam at the time when the petition for initiation of bankruptcy proceedings is entertained by the Court.
- Complicated bankruptcy cases includes bankruptcy cases other than those mentioned in Points a, b, c Clause 1 Article 8 of the Law on bankruptcy, and cases where an enterprise or co-operative requested to initiate bankruptcy proceedings:
+ has at least 300 (three hundred) employees, or has at least VND 100,000,000,000 (one hundred billion dongs) of charter capital of;
+ is a credit institution, a business or co-operative providing public utility products and services, or a business servicing national defense and security defined inlaws;
+ is a state corporation, general company, or a foreign-invested business;
+ has debts guaranteed by the Government or gets involved in the implementation of international treaties to which the Socialist Republic of Vietnam is a signatory or written agreements on investment with foreign agencies or organizations;
+ has a transaction subject to any claim for being declared invalid as referred to in Article 59 of the Law on bankruptcy.
Thus, from the above-mentioned legal grounds, Provincial-level People's Courts and District-level People's Courts have the authority to settle bankruptcy under each specific case.
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