Vietnam Government Drafts Decree on Debt Collection Firms
March 17 2006
Vietnam Chamber of Commerce and Industry (VCCI) in co-operation with
the Finance Ministry's Department of Finance and Banking met last week
to discuss a draft decree concerning debt collection businesses.
of VCCI's Legal Department, Tran Huu Huynh, said some 70 enterprises
nationwide are currently engaging in debt collection. In addition, a
number of law firms provide consulting services on this issue.
said that debt collection has become a 'commodity' in today's society
and a real demand exists for this kind of service, especially for
companies in the telecom, electricity and water supply sectors with
large networks of customers.
According to the draft
decree, debt collection businesses are required to possess a minimum of
VND5bil (US$310,000) in registered capital and hold no outstanding
debts itself. It does not, however, apply to disputed debts
or those settled by the judicial system but rather those arising from
legally recorded civil transactions. Businesses in this sector are also
prohibited from cheating clients or using violence to collect overdue
debts, under the decree.
Many at the conference,
however, pointed out the vagueness of the draft decree. It is unclear
if debt collection businesses need special licences to open. Lawyer,
Nguyen Ngoc Thach, said the drafting committee failed to justify the
reason behind the minimum charter capital of VND5bil. He
also stated that the decree has not yet laid out penalties or measures
for companies who fail to return the money to the creditor, after
collecting the debt.