Vietnamese bankruptcy regulations
In 2012, many
Vietnamese companies are facing difficulties and have to cease operation. In
other developed countries, the bankruptcy law plays an important role in the
restructuring of a company having financial difficulties. The same cannot be
said for Vietnam. However, to some extent, bankruptcy is still a credible
option in theory for corporate restructuring in Vietnam. Therefore, a good
understanding of Vietnamese bankruptcy law is still necessary.
Basic knowledge
Under Vietnamese legislation, there is no concept of personal insolvency but only concept of bankruptcy for enterprises.
In Vietnam, the regulations on bankruptcy of companies and reorganization and restructuring of companies in bankruptcy process are mainly provided in:
- The Law on Bankruptcy; and
- Resolution 3 of the Supreme Court dated 28 April 2005.
The average timing from the petition filing until the deletion off the registry book of a bankrupt company is about 150 days assuming that no recovery plan is adopted and implemented. If there is an appeal against the court’s decision to commence the liquidation procedures, a period of at least 90 days will be added for the court of higher level to consider the appeal.
Bankrupt status
An enterprise is considered bankrupt if it is “unable to pay the due debts upon request by the creditors”. Resolution 3 further clarifies that “due debts” are the unsecured debts or partly secured debts, which is expressly recognized by the relevant parties, supported by adequate evidencing documents and free of dispute.
Filing and acceptance of a petition for bankruptcy proceedings
Petition: An unsecured or partly secured creditor of a company by noticing that the company is in bankrupt status will have the right to file a petition for bankruptcy proceedings against such company together with evidence of the bankrupt status
Court’s fee: The petitioner must make an advance of the bankruptcy fees, determined the court
Court: The competent court in charge of bankruptcy cases is the provincial court of the locality where the company in bankruptcy registered for its business registration.
Acceptance of bankruptcy hearing: The Court will issue a decision whether to commence the bankruptcy proceedings within 30 days from the date of acceptance of the petition for bankruptcy proceedings. Creditors and debtors of the company are also entitled for being noticed of such decision.
Commencement of bankruptcy proceedings
Company’s operation: After the issuance of the court’s decision to commence bankruptcy proceedings, the business activities of the company in bankruptcy will be subject to the supervision and inspection of the judge in charge of the case and the Board for Asset Management and Liquidation (Liquidation Board).
Standstill: After the issuance of the court’s decision to commence bankruptcy proceedings, the disposal of the company’s secured assets for secured creditors will be temporarily suspended.
List of company’s assets: Within 30 days from the date of receiving the court’s decision to commence bankruptcy proceedings, the company will have to list out an inventory of its assets in accordance with the detailed list submitted to the court and determine the value of such assets.
Preparation of the list of creditors: Within 60 days from the last day of publication of the court's decision to commence bankruptcy proceedings, creditors of the company must submit to the court their detailed request for debt payment. Within 15 days from the expiration of the above 60 days, the Liquidation Board must prepare a list of creditors with details of the debts thereof.
Convention of the Creditors Meeting: Within 30 days from the completion of the list of creditors or the list of company’s assets, depending on which date comes first, the competent court will convene the first meeting of the company’s creditors to discuss the company’s situation and approve a resolution to recover the company’s business, if the creditors consider that the company is recoverable. If the creditors consider that the company is not recoverable then the court will decide to commence the liquidation procedures.
Recovery of business activities
The plan will then be subjected to the approval of the second meeting of the company’s creditors. The maximum term for the company to implement the business recovery plan is 3 years from the last day of publication of the Court’s adoption of the creditor’s resolution approving the company’s recovery plan
Within 30 days from the approval of the resolution to recover the company’s business, the company is required to prepare and submit the plan to recover its business activities to the Court, specifying the necessary measures to recover the operations as well as the conditions, term and schedule for repayment of debts.
Assets liquidation
Commence the liquidation procedures: The court will decide to commence the liquidation procedures for the company’s assets in the following cases: (1) the failure of the first creditor’s meeting, (2) the company fails to propose a recovery plan, (3) the company implements improperly the approved recovery plan or (4) the creditors do not approve the company’s recovery plan.
Settlement of undue debts: Where the court decides to commence the liquidation procedures, any undue debts of the company existing at that time will be treated as due debts, without any interest for the undue period.
Settlement of secured debts: Where the court issues decision on commencing the liquidation procedures, debts secured by the company’s assets before the courts’ acceptance of bankruptcy hearing will be given priority in payment by such assets.
Priority of assets distribution: Where the court decides to commence the liquidation procedures, the assets of such liquidated company will be distributed in the priority order of (1) bankruptcy fees, (2) unpaid salary, severance allowances, social insurance and other benefits of its employees, and (3) unsecured debts.
Termination of the liquidation procedures: The court will decide to terminate the assets liquidation procedures when the company has no more assets to carry out the assets distribution or the assets distribution has been fully completed.
Declaration of bankruptcy
The court will make the decision to declare the bankruptcy of the company along with the decision to terminate the liquidation procedures thereof. Within 10 days from the date of such decision, the court will forward the decision to the business registration office for deleting the bankrupt company’s name from the business registry.
Voidable transactions
Under the Law on Bankruptcy, inter alia, the following transactions may be held by the court to be invalid if conducted within three months prior to the date of acceptance of the bankruptcy application (the suspect period):
- settlement of any bilateral contract under which the obligations of the Counterparty are apparently greater than those of the other party; and
As discussed in our previous post, we believe the pilot mechanism introduced under Resolution 171 will bring a significant improvement to the legal framework for commercial housing development in Vietnam. With the enactment of implementing Decree 75/2025, this pilot mechanism is now fully set up. In this post, we will highlight key takeaways from Decree 75/2025 and discuss potential implications for housing developers.
On 29 April 2025, the State Bank of Vietnam (SBV) has issued Circular 3 on the opening and using of VND account for conducting indirect investment in Vietnam (Circular 3/2025). From 16 June 2025, Circular 3/2025 will replace Circular 5 dated 12 March 2014 of the SBV (Circular 5/2014) guiding the opening and using of indirect investment capital account (IICA) for conducting indirect investment in Vietnam.
n a landmark reform for 2025, the Government of Vietnam has commenced a significant restructuring of its ministries. This major overhaul, approved by Resolution No 176 of the National Assembly dated 18 February 2025, aims to create a leaner, more efficient, and effective state apparatus to better support the nation's development.
The restructuring involves a series of complex mergers and transfers of functions between ministries. Based on the guiding decrees, the key changes include:
The Vietnamese government recently issued Decree 69/2025 (effective 19 May 2025), which amends Decree 01/2014 regarding foreign investor’s share purchase in Vietnamese credit institutions. Here are the main changes:
1. Scope of application
Decree 69/2025 clarifies that foreign-invested economic organisations (FIEOs) which are required to comply with investment conditions and procedures applicable to foreign investors must now follow the same rules (in Decree 01/2014 as amended by Decree 69/2025) applicable to foreign investors when buying shares in Vietnamese credit institutions.
Under the Investment Law 2020, these FIEOs refer to entities where foreign investors hold a majority of the charter capital (FIEO-F1). Notably, Decree 69/2025 does not explicitly state whether it applies to economic organisations majority-owned by an FIEO-F1, even though such economic organisations are also treated as foreign investors under the Investment Law 2020.
In criminal proceedings in Vietnam, civil claims (e.g., claims for compensation, repair of damaged property) often arise alongside criminal charges against criminals. The Criminal Procedure Code 2015 introduces the position of “civil claimants” (nguyên đơn dân sự) and “civil defendants” (bị đơn dân sự) to facilitate the handling of civil claims in Vietnamese criminal proceedings. However, other than creating these positions, the Criminal Procedure Code 2015 lacks detailed provisions on how these civil matters should be addressed in criminal proceedings. This legal gap, coupled with inconsistent judicial practices, makes the resolution of civil claims within criminal cases particularly complex and problematic. This post will explore the key challenges in resolving civil claims during criminal proceedings.
No clear procedures - Article 30 of the Criminal Procedure Code 2015 provides that civil matters in criminal cases are to be resolved during the adjudication of the criminal case. However, the Criminal Procedure Code 2015 provides no further instructions on the procedure for resolving civil claims within criminal proceedings. It remains unclear what procedural rules apply—whether the criminal court should follow its own process or adopt the procedures set out in the Civil Procedure Code 2015 to settle a civil claim during criminal proceedings. This uncertainty can lead to inconsistent judicial practices and procedural confusion.
Scope of civil claims - Article 64.1 of the Criminal Procedure Code 2015 defines a civil defendant as “an individual, agency, or organization that, as prescribed by law, is responsible for compensating for damages”. It appears from the definition of civil defendant that a civil claim during criminal proceedings only relates to the issue of compensation for damages. It is not clear whether other issues such as ownership of assets or return of illegal property could be covered in a civil claim during criminal proceedings. In addition, the court may also designate the person making or subjecting to a claim on civil issues which are not claim for damages to another position (e.g., person with related rights and obligations) during the proceedings.
Decree 125 of the Government dated 5 October 2024 (Decree 125/2024) introduces updated regulations for the education sector, including a requirement that a license must be obtained for establishing "other centres performing continuing education tasks" (trung tâm khác thực hiện nhiệm vụ giáo dục thường xuyên in Vietnamese and in the rest of this article, Other Continuing Education Centres). Crucially, the education law fails to clearly define these centres, creating significant ambiguity for education service providers, particularly those centres teaching K-12 subjects (e.g., math, literature).
First, the Education Law 2019 and Decree 125/2024 lack an explicit definition of Other Continuing Education Centres. Interpreting relevant provisions of the Education Law 2019, it appears that Other Continuing Education Centres are centres providing: