VAMC - New tool to resolve bad debts
The much expected Decree on setting up Vietnam Assets Management Company (VAMC) was finally issued on 18 May 2013 and will take effect from 9 July 2013. VAMC is expected to play a major role in resolving the massive amount of bad debts accumulated by Vietnamese banks. However, a quick review of the Decree indicates that in order for VAMC to be up and running many steps and decisions remain to be taken.
The Basic
VAMC is a non-profit State-owned enterprise and incorporated as a single-member limited liability company. VAMC has a chartered capital of VND 500 billion. The SBV is the representative of the State capital in VAMC.
How it works
Decree 53/2013 establishes a quite complicated mechanism to deal with bad debts of Vietnamese banks. Below is an example of how such mechanism works:
- Borrower B mortgages its house to borrow a loan of VND 100 billion (Secured Debt) from Bank A. Borrower B fails to repay the Secured Debt and the Secured Debt becomes bad debt of Bank A. Bank A has not set aside any reserve for the Secured Debt..
- VAMC issues special bonds (VAMC Bond) according to an issuance plan to be approved by the State Bank of Vietnam (SBV). VAMC Bond has a term of five years and carries no interest.
- Bank A sells the Secured Debt to VAMC in exchange of VND 100 billion VAMC Bond. This step requires the Secured Debt and Borrower B to satisfy certain conditions. As a result of the transfer, VAMC will become the owner of the Secured Debt and be entitled to the mortgage over the house of Borrower B (the Mortgage). The transfer is made by way of a contract between VAMC and Bank A. In some cases, the SBV may even force Bank A to sell its bad debts to VAMC if Bank A does not cooperate with VAMC.
- Bank A pledges VND 100 billion VAMC Bond with the SBV to obtain a recapitalisation loan from the SBV (SBV Loan). The amount and interest of the SBV Loan is subject to separate regulations.
- During the term of the VAMC Bond, Bank A needs to establish a reserve (Bank Bond Reserve) of at least 20% of the value of VAMC Bond each year.
- After taking over the Secured Debt and the VAMC will either directly or authorise Bank A to deal with Borrower B. Decree 53/2013 seems to offer substantial legal supports for VAMC to enforce the Mortgage. For example, Decree 53/2013 requires all competent authorities to cooperate with VAMC to allow VAMC to enforce the security interests that it holds.
- VAMC authorises Bank A to enforce the Mortgage and recover VND 50 billion (Recovered Amount) and VND 50 billion remains to be unpaid (Remaining Debt).
- Within five business days after the earlier of (1) the last day of the term of VAMC Bond or (2) the date on which the aggregate of the Bank Bond Reserve and the Recovered Amount is equal to VND 100 billion, Bank A must (2) repay the SBV Loan and get back the VND 100 billion VAMC Bond, and (3) sell back VND 100 billion VAMC Bond to VAMC in return of the Remaining Debt. VAMC will also return the Recovered Amount less the enforcement expenses and a haircut (to be decided) for VAMC to Bank A.
- After Bank A gets back the Remaining Debt and returns the VAMC Bond to VAMC, Bank A will need to use the Bank Bond Reserve to resolve the bad debt resulted from the VAMC Bond and to continue resolve the Remaining Debt.
The Government officially issued Decree 102/2026/NĐ-CP (Decree 102/2026), which introduces critical amendments and supplements to Decree 75/2019/NĐ-CP (Decree 75/2019) regarding administrative penalties for violations in the competition sector. Effective from 20 May 2026, Decree 102/2026 provides clearer enforcement guidelines and adjusts penalty frameworks, particularly for economic concentrations.
Below is a summary of the key changes introduced by Decree 102 that will directly affect M&A transactions subject to merger control (economic concentration notification) requirements in Vietnam.
In March 2026, Vietnam’s Ministry of Finance (MOF) released a draft decree (Draft Decree) implementing the Law on Personal Income Tax 2025 (PIT Law 2025) for public consultation. One proposal drew strong feedback from businesses and investors: a change to how individuals are taxed on the transfer of shares in non-public/unlisted joint-stock companies (JSCs). Following the consultation, the MOF now appears poised to step back from that change – welcome news for investors and companies engaged in M&A and private share transactions.
On 5 June 2026, the Government issued Decree 200 on private placement and trading of corporate bonds on domestic market and offering of corporate bonds on international market (Decree 200/2026). Decree 200/2026 will replace Decree 153/2020 on the same subject. In the past, Decree 153/2020 has been amended by Decree 65/2022 and Decree 8/2023. Decree 200/2026 introduces more conditions for private bond issuance.
5x debt/equity ratio
1.1. Decree 200/2026 reflects the 5x debt/equity requirement established under the 2025 amendment to the Enterprise Law. In particular, the debt of a bond issuer (including the value of the bonds to be issued) must not exceed 5 times of the equity of such issuer as recorded in the audited financial statements of the year preceding the issuance.
On 15 May 2026, the Government issued Resolution No. 66.17/2026/NQ-CP (the Resolution 66.17 or the new), slimming down the list of conditional business sectors currently set out in Appendix IV of Investment Law 2025 (the old).
Resolution 66.17 will take effect on 1 July 2026 and is set to expire on 28 February 2027, by which time the Government expects the National Assembly to formalise these adjustments through an amendment to Appendix IV. Although there would be a question about the effectiveness of the Resolution 66.17 over the Appendix 4 of Investment Law 2025 and how the investment authority will apply in practice, the investor may, in the meantime, treat the Resolution 66.17 as the working text for the next 9–10 months while following up on the law amendments.
Under Article 41 of the Law on Real Estate Business 2023 (Real Estate Business Law), a real estate project (Project) eligible for transfer may follow one of two sets of legal procedures, depending on how it was approved. While the difference may appear procedural at first glance, it has significant implications for when the transfer transaction is legally completed, and for what the parties can (or cannot) do if the transaction ultimately falls through. This post discusses the two procedures and the practical implications arising from the distinction between them.
Vietnam has temporarily raised several general economic concentration notification thresholds under Resolution No. 66.18 of the Government dated 18 May 2026 (Resolution 66/2026), a practical change for M&A transactions as fewer deals should be caught solely by Vietnamese assets, Vietnamese turnover or transaction value.
On 3 September 2025, the Ministry of Finance (MOF) released the Official Letter no. 13629 addressing questions related to difficulties and obstacles arising from legal regulations in the finance and investment sector. This correspondence has several notable issues that are summarized below. While some of the MOF’s guidance offers welcome flexibility and operational reassurance, others fall short of providing clear or comprehensive clarification, leaving important gaps unresolved and inconsistencies with other legislation unaddressed.
Delegation by the General Meeting of Shareholders endorsed in principle (Query no. 29)
Query/Issue raised:
Current regulations regarding delegation/authorisation (both could be translated to/from "uỷ quyền" in Vietnamese) by the General Meeting of Shareholders (GMS) to the Board are unclear and conflicting. […]
A recurring issue in Vietnam corporate governance is whether a former member of the Board of Directors can be appointed as an “independent” Board member in the subsequent term, provided that all other statutory criteria are satisfied. This typically arises where companies want to retain a former board member while still complying with independence requirements under Article 155.2 of the Enterprises Law 2020 as amended in 2025 (Enterprises Law 2020).
Under Article 155.2(dd) of Enterprises Law 2020, an independent Board member must “not hold the position of member of the Board of the company within the last 05 years or longer unless he/she was designated in 02 consecutive terms.”
Vietnamese law currently lacks a formal definition of “latent defect” (khiếm khuyết ẩn) and a clear mechanism for allocating liability once such defects arise. This regulatory vacuum often leads to prolonged disputes between the Employer and the Contractor, particularly when the construction contracts do not include explicit risk allocation.
For the purpose of our discussion below, a “latent defect” is defined as a fault or flaw in construction works/item that is not discoverable through a reasonably thorough inspection at the time of handover.
When companies think about data protection, they usually focus on “visible” data like names, email addresses, or bank details. However, there is a hidden layer called metadata - essentially “data about data” - that often gets ignored.
Under Vietnam’s new personal data protection rules, overlooking metadata is a major risk. If metadata can be used to identify a specific person, it falls under the same strict rules as regular personal data.
What is Metadata? The “Digital Footprint”
Metadata is information that describes the context of a file or a message rather than the content itself. Even if you remove a person’s name from a file, the metadata can still point directly to them.
Vietnam is currently at a pivotal stage of infrastructure modernization. To meet the immense demand for capital, the State has moved to revitalize private sector participation, most notably through the “Build – Transfer” (BT) model.
In a typical BT arrangement, a private investor finances and constructs an infrastructure project, then transfers it to the State upon completion. In return, the State “pays” the investor with land funds, allowing them to develop a “reciprocal project” (dự án đối ứng) to recover their capital and generate profit. While this mechanism is essential to stimulate private sector participation, the recent new legal framework for BT projects may raise significant concern regarding the land access privileges granted to BT investors compared to their counterparts in the general real estate market. In particular,
The recently issued Case Law No. 81/2024/AL (CL 81) introduces a precedent that allows creditors to bypass the standard statute of limitations by re-characterizing an unpaid contractual debt as a property reclamation claim upon the mutual termination of the contract and an agreement on the payable amount. Below are a few of our observations regarding CL 81.
Summary of the Case
The dispute originated from a service contract between Company M (the Service Provider) and Company A (the Client). After the Service Provider performed its services, the parties mutually agreed to terminate the contract. Subsequently, the Client explicitly confirmed in writing the specific amount of the service fee it owed to the Service Provider and the late payment interest but ultimately failed to make the payment. When the Service Provider filed a lawsuit to recover the unpaid amount, the Client requested the court to dismiss the case, arguing that the 3-year statute of limitations for a contractual dispute had already expired.