What are the requirements for an enterprise to be considered for debt sale or proposed to sell debt from the National Technology Innovation Foundation in Vietnam?
- What are the requirements for an enterprise to be considered for debt sale or proposed to sell debt from the National Technology Innovation Foundation in Vietnam?
- What documents are included in the application for debt sale of the National Technology Innovation Foundation in Vietnam?
- How to account for debt sale of the National Technology Innovation Foundation in Vietnam?
What are the requirements for an enterprise to be considered for debt sale or proposed to sell debt from the National Technology Innovation Foundation in Vietnam?
Pursuant to the provisions of Clause 2, Article 12 of Circular No. 03/2023/TT-BKHCN stipulating as follows:
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2. An enterprise may be eligible for debt sale when meeting all of the following requirements:
a) It is an entity mentioned in Clause 1 of this Article;
b) It has used the borrowed funds for the purposes specified in the contract;
c) It faces difficulties during business resulting in its loss or accumulated losses incurred within at least 01 year preceding the year of risk treatment and its failure to repay debt (principal and/or interest) in full and on schedule as agreed upon in the signed contract;
d) It has submitted an adequate application as prescribed in Clause 5 of this Article.
According to the above provisions, an enterprise may be eligible for debt sale when meeting all of the following requirements:
- It is one of the following entities:
+ Enterprises suffer financial and/or property damage due to disasters in accordance with regulations of law on prevention and control of disasters, calamities, crop failure, epidemics, fire, war events or national state of emergency.
+ An enterprise that is at risk because its owner (for a sole proprietor or a one-member limited liability company) loses his/her active legal capacity, dies, disappears, or leaves no property to repay their debts; an enterprise that has ceased operations, and it lacks assets and financial resources to clear its debts; an enterprise that faces risks due to other objective causes including unforeseen accidents, political risks, changes in State policies that directly impact its production and business operations, resulting in financial losses, difficult financial circumstances, or default on debts (principal or interest).
+ An enterprise that encounters financial difficulties resulting in lack of financial resources to repay debts or default on debts other than the two cases specified as above.
- It has used the borrowed funds for the purposes specified in the contract;
- It faces difficulties during business resulting in its loss or accumulated losses incurred within at least 01 year preceding the year of risk treatment and its failure to repay debt (principal and/or interest) in full and on schedule as agreed upon in the signed contract;
- It has submitted an adequate application.
What are the requirements for an enterprise to be considered for debt sale or proposed to sell debt from the National Technology Innovation Foundation in Vietnam?
What documents are included in the application for debt sale of the National Technology Innovation Foundation in Vietnam?
Pursuant to the provisions of Clause 5, Article 12 of Circular No. 03/2023/TT-BKHCN stipulating as follows:
Debt sale
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5. The enterprise or National Technology Innovation Foundation (hereinafter referred to as NATIF) may apply for debt sale:
a) The enterprise shall prepare an application for debt sale as prescribed in Clause 5 Article 9 hereof. If the enterprise applies for risk treatment of total book value of debt, the application requires no commitment about feasibility of the business plan and the debt repayment plan if the application is accepted.
b) NATIF shall prepare an application for debt sale including:
- The written proposal for risk treatment made by NATIF, indicating the following: the enterprise’s business situation, debt repayment (principal, interest) under the contract, associated risks and their causes, the level of capital and property damage incurred by the enterprise, the book value of the debt. The application for risk treatment must specify the adopted risk treatment measures and associated results (if any), and proposed risk treatment measures;
The record of capital and asset damage incurred by the enterprise (the enterprise’s certification thereon is not required);
- Propose risk treatment for part or all of the book value of the debt;
- The original of the debt buyer’s written request for or letter of acceptance of debt purchase (if any).
- Other documents and instruments as prescribed by law or requested by the debt buyer (if any).
According to the above provisions, enterprises or the National Technology Innovation Foundation may apply for debt sale, the application for debt sale is specified as follows:
In case the enterprise applies for debt sale
- The application form which is signed by the enterprises legal representative and includes the following contents:
+ Causes of risk resulting in its failure to repay debts under the signed contract; capital and asset damage level;
+ Book value of the debts; adopted risk treatment measures (if any) and proposed risk treatment measures; commitments on the feasibility of the business plan and debt repayment plan after risk treatment;
- Authenticated duplicates of the financial statements audited by independent audit organizations or sent to tax authorities of the latest 02 years before the date of application for risk treatment or of the year preceding the year in which the enterprise applies for risk treatment if the enterprise has operated for a period less than 02 years;
- Certified true copy of the debt reconciliation statement by the time of application for risk treatment;
- Other relevant documents (if any).
Note: If the enterprise applies for risk treatment of total book value of debt, the application requires no commitment about feasibility of the business plan and the debt repayment plan if the application is accepted.
In case the National Technology Innovation Foundation applies for debt sale
- The written proposal for risk treatment made by NATIF, indicating the following:
+ The enterprise’s business situation, debt repayment (principal, interest) under the contract, associated risks and their causes, the level of capital and property damage incurred by the enterprise, the book value of the debt.
+ The application for risk treatment must specify the adopted risk treatment measures and associated results (if any), and proposed risk treatment measures;
The record of capital and asset damage incurred by the enterprise (the enterprise’s certification thereon is not required);
- Propose risk treatment for part or all of the book value of the debt;
- The original of the debt buyer’s written request for or letter of acceptance of debt purchase (if any).
- Other documents and instruments as prescribed by law or requested by the debt buyer (if any).
How to account for debt sale of the National Technology Innovation Foundation in Vietnam?
Pursuant to the provisions of Clause 9 Article 12 of Circular No. 03/2023/TT-BKHCN stipulating as follows:
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9. Accounting for debt sale
NATIF shall carry out accounting for its debt sale according to current regulations on accounting applied to NATIF.
Thus, the accounting in debt sale shall comply with current regulations on accounting regime applicable to the Foundation.
Circular No. 03/2023/TT-BKHCN takes effect from July 1, 2023.
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