Vietnam: Principles for handling debts when transferring wholly State-owned enterprises

Decree No. 128/2014/NĐ-CP of Vietnam’s Government specified principles for handling debts when transferring wholly State-owned enterprises as follows:

- For tax debts and other payments to the state budget: The transferring enterprise is responsible for paying taxes and other payments to the state budget before the transfer; in case the transferring enterprise has not fulfilled its tax payment obligations and state budget payments, the transferee of the enterprise is responsible for inheriting all the debts handed over and deducted from the value of equity at the enterprise upon payment;

- For loans from the State Commercial Bank, loans from other organizations and individuals, the transferring enterprise is responsible for mobilizing lawful capital sources to pay due debts before transferring the enterprise; in case the transferring enterprise has not fully paid the due debts, the transferee of the enterprise shall inherit all the transferred debts and have them deducted from the value of equity at the enterprise upon payment;

- Overdue foreign loans (guaranteed or unsecured) shall be handled in accordance with the law on debt management and foreign loan repayment;

- For debts owed to social insurance and employees, the enterprise shall be responsible for handling it before transferring the enterprise and shall be deducted from the value of equity at the enterprise for payment;

- The transferee of the enterprise is responsible for inheriting the receivable and payable debts of the enterprise after they are handled.

View more details at the Decree No. 128/2014/NĐ-CP of Vietnam’s Government, effective from March 01, 2015.

Ty Na

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