Are You Engaging in Debt Trading According to the New Regulations

Thus, after numerous contributions from experts and feedback from businesses, the Government of Vietnam has officially established a separate legal framework for debt trading businesses, equal to other conditional business sectors.

Accordingly:

Clause 6, Article 3 of Decree 69/2016/ND-CP stipulates the concept of “Debt trading service is the continuous implementation of one or several activities related to debt trading for profit purposes, including: debt purchase, debt sale, debt trading brokerage, debt trading consultancy, and debt exchange services.”

Distinguishing this from the prior debt trading activities that were not considered business activities as follows:

The scope of the Decree applies only within the territory of Vietnam and does not apply to the debt trading activities of credit institutions, foreign bank branches, and corporate bonds offered publicly. However, it is not confirmed whether the contents of this Decree conflict with the conventions related to debt trading that Vietnam participates in (Article 1).

Debt trading businesses must have a charter capital of 100 billion VND,

The business conditions for debt trading activities are stipulated in Article 7 of the Decree. Specifically, debt trading businesses must:

- Comply with the general conditions outlined in Article 5 of the Decree.- Have a minimum charter capital or investment capital of 100 billion VND.- Additionally, the debt trading activities must comply with Clause 3 of this Article.

Moreover, the Decree stipulates: “Within one year from the effective date of this Decree, businesses that have been trading debt services prior to the effective date of this Decree must:

1. In case of meeting the conditions defined in this Decree, the enterprise must send a report in writing to the business registration authority.
2. In case of not meeting the conditions defined in this Decree, the enterprise must send a report in writing to the business registration authority and take measures to ensure compliance with the provisions of this Decree, including measures to cease the debt trading services.”

Thus, even the Vietnam Asset Management Company (VAMC) and the Vietnam Debt and Asset Trading Corporation (DATC) may have to participate in the general market for debt trading services as stipulated by this Decree.

In the near future, Decree 155/2013/ND-CP on administrative penalties in the field of planning and investment, which includes penalties for violations in debt trading services, will be amended to comply with Decree 69/2016/ND-CP.

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