Regulations Banning Debt Collection Services

Currently, the Investment Law 2020 is built on the basis of the principle of eliminating some industries and selecting some new ones business investment prohibited, including regulations on debt collection services. Please contact hotline 0903.419.479 or via email contact@apolo.com.vn for detailed advice from Apolo Lawyers Law Firm. We always aim to solve problems quickly, accurately, timely and effectively.

1. Regulations on debt collection service

Currently, the Investment Law 2020 is built on the basis of the principle of eliminating some industries and selecting some new ones business investment prohibited. In addition to this list, investors have the right to freely choose investment and business lines suitable to their capabilities, and for conditional investment and business lines must meet the following conditions according to regulations of the Law.

Regulations Banning Debt Collection Services

Pursuant to the provisions of the Law on Investment in 2020, Article 6 stipulates that business investment is prohibited as follows:

The following business investment activities are prohibited:

• Trading in narcotic substances specified in Appendix I of this Law;
• Trading in chemicals and minerals specified in Appendix II of this Law;
• Trading in specimens of wild plant and animal species extracted from nature specified in Appendix I to the Convention on International Trade in Endangered Species of Wild Fauna and Flora; specimens of endangered, precious and rare species of forest plants, animals and aquatic animals of Group I, derived from natural exploitation as prescribed in Appendix III of this Law;
• Prostitution business;
• Buying and selling people, tissues, corpses, human body parts, human fetuses;
• Business activities related to human cloning;
• Trading in firecrackers;
• Business debt collection services.

2. Causes of the ban on debt collection service business

Currently, due to the nature of business investment, the above debt collection service industries and professions may affect social order and safety, personal and organizational interests, community interests, and the interests of the State. Law on investment in Vietnam, so banning this business is absolutely necessary for the current socio-economic situation. The practice of this industry in the past did not fully guarantee the legality and the control was not close, so the actual operation was not in accordance with the meaning that the Vietnamese government wanted.

This regulation poses a challenge in handling and solving difficulties related to investment and business activities in new industries and trades added to the list of prohibited investment and business before the Law. Investment in 2020 has legal effect, leading to the fact that individuals and organizations are struggling with legal practice and are looking to switch to other business lines or some have to terminate their business activities. causing job loss affecting the material life of some individuals in Vietnamese society.

3. The process of terminating debt collection services

On June 17, 2020, the XIV National Assembly approved the Investment Law 2020 (Law No. 61/2 020/QH14) replacing the Investment Law 2014 (Law No. 67/2014/QH14) and its amendments. additional change. From January 1, 2021, the Investment Law 2020 takes effect (especially the provisions of Clause 3, Article 75 taking effect from September 1, 2020), the business of debt collection services in accordance with the provisions of this Law. Article 6 of the Investment Law 2020 is a business that is prohibited from doing business, whereby individuals and organizations doing this business must terminate their business activities according to regulations. 

4. The procedure for dissolution of a debt collection service business

Pursuant to the provisions of the Enterprise Law 2020 in Article 208, the order and procedures for enterprise dissolution. The dissolution of an enterprise in the case specified at Points a, b and c, Clause 1, Article 207 of this Law shall comply with the following provisions:

• To pass resolutions and decisions on dissolution of the enterprise. A resolution or decision on dissolution of an enterprise must contain the following principal contents:
  • Name and address of the head office of the enterprise;
  • Reasons for dissolution;
  • Time limit and procedures for contract liquidation and payment of debts of the enterprise;
  • Plan to handle obligations arising from the labor contract;
  • Full name and signature of the owner of the private enterprise, the company owner, the Chairman of the Members Council, the Chairman of the Board of Directors;
• The owner of a private enterprise, the Members Council or the company owner or the Board of Directors shall directly organize the liquidation of the enterprise assets, unless the company charter provides for the establishment of a separate liquidation organization;
• Within 07 working days from the date of adoption, the resolution, decision on dissolution and meeting minutes must be sent to the business registration agency, tax agency, and employees in the enterprise. Resolutions and decisions on dissolution must be posted on the National Portal on enterprise registration and publicly posted at the enterprise head office, branches and representative offices. In case the enterprise has unpaid financial obligations, it must enclose the resolution, dissolution decision and debt settlement plan to its creditors, persons with related rights, obligations and interests. The debt settlement plan must have the name and address of the creditor; debt amount, term, place and method of payment of such debt; the method and time limit for settling the creditor complaint; 
• The business registration authority must notify the status of the enterprise undergoing dissolution procedures on the National Enterprise Registration Portal right after receiving the resolution or decision on dissolution of the enterprise. Enclosed with the notice must be posted the resolution, dissolution decision and debt settlement plan (if any);
• The debts of the enterprise shall be paid in the following order of priority:
  • Debts in salary, severance allowance, social insurance, health insurance, unemployment insurance as prescribed by law and other benefits of employees under collective labor agreement and contract signed labor contract;
  • Tax debt;
  • Other debts;
• After the expenses for dissolution of the enterprise and debts have been paid, the remainder shall be divided among the owners of the private enterprise, members, shareholders or the company owner according to the proportion of ownership of contributed capital, share;
• The enterprise legal representative shall send the enterprise dissolution dossier to the business registration agency within 05 working days from the date of payment of all debts of the enterprise;
• After 180 days from the date of receipt of the resolution or decision on dissolution as prescribed in Clause 3 of this Article, without receiving any opinions on the dissolution from the enterprise or the related parties written objections. copy or within 5 working days from the date of receipt of the dissolution dossier, the business registration agency shall update the legal status of the enterprise on the national enterprise registration database;

5. Regulations on penalties for doing business in prohibited business lines

Pursuant to the provisions of Decree 98/2020/ND-CP on sanctioning of administrative violations in commercial activities, production and trading of counterfeit and banned goods and protection of consumers interests accordingly. the provision of prohibited business services shall be subject to a fine ranging from VND 30,000,000 to VND 50,000,000 for one of the following violations of displaying and introducing goods and services on the list of goods, services banned from business, goods not yet permitted for circulation, services not yet permitted to be provided in Vietnam; A fine ranging from VND 20,000,000 to VND 30,000,000 shall be imposed for one of the following violations. Promotion for goods and services banned from business; goods and services for which business is restricted; goods that have not been allowed to circulate, services that have not been allowed to be provided.

Regulations Banning Debt Collection Services

If you have any questions, please contact hotline 0903.419.479 or via email contact@apolo.com.vn for detailed advice from Apolo Lawyers Law Firm.

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