Conditions for revision of payment periods/amounts of debt from the National Technology Innovation Fund in Vietnam

Conditions for revision of payment periods/amounts of debt from the National Technology Innovation Fund in Vietnam (Internet image)

On May 15, 2023, the Minister of Science and Technology of Vietnam issued Circular 03/2023/TT-BKHCN providing guidance on treatment of risks arising from direct lending operations of National Technology Innovation Foundation (NATIF).

1. What is revision of payment periods/amounts?

Revision of payment periods/amounts means NATIF and an enterprise agree on changes in periods for making payment of debts (principal and/or interest) or payment amounts (principal and/or interest) agreed upon in the signed contract while the loan term does not change.

(Clause 2, Article 2 of Circular 03/2023/TT-BKHCN)

2. Which enterprises in Vietnam are eligible for revision of payment periods/amounts of debt from the National Technology Innovation Fund?

According to Clause 1, Article 9 of Circular 03/2023/TT-BKHCN, an enterprise may be eligible for revision of payment periods/amounts if it faces risks as prescribed in clause 1 or clause 2 Article 6 of Circular 03/2023/TT-BKHCN.

Specifically:

-  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).

3. Conditions for revision of payment periods/amounts of debt from the National Technology Innovation Fund in Vietnam

According to Clause 2, Article 9 of Circular 03/2023/TT-BKHCN, an enterprise may be eligible for revision of payment periods/amounts when meeting all of the following requirements:

- It is an entity mentioned in Section 2;

- It has used the borrowed funds for the purposes specified in the contract;

- It has difficulties in business operations resulting in its failure to repay debts (principal and/or interest) in full and on schedule under the signed contract;

- It has a viable production and business plan and a debt repayment plan after the debt repayment term is revised;

- It has submitted an adequate application as prescribed in Clause 5 of Article 9 of Circular 03/2023/TT-BKHCN.

Specifically, application for revision of payment periods/amounts sent by the enterprise includes:

+ The application form which is signed by the enterprises legal representative and includes the following contents:

(i) Causes of risk resulting in its failure to repay debts under the signed contract;

(ii) Capital and asset damage level

(iii) Book value of the debts

(iv) Adopted risk treatment measures (if any) and proposed risk treatment measures

(v) 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).

Circular 03/2023/TT-BKHCN takes effect from July 1, 2023.

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