Our Vietnam legal update #144 would lead you on 03 legal issues:
I. Some guidelines on the procedure of corporate bankruptcy
On 18 December 2020, the Supreme People’s Court announced the online results to some questions about corporate bankruptcy with the following notable contents:
- An enterprise or cooperative (“Enterprise”) that is insolvent must fully meet the following conditions:
(i) Having a specific, apparent debt recognized by the parties, agreed by the parties or identified through a legally effective judgment or decision of a Court, a commercial arbitration’s award, or identified in the decision of the competent authority and the parties that have no dispute over this debt; and
(ii) Having due debts. Due debt means a debt for which the payment term has been clearly determined, by which time the enterprise is obliged to repay the debt. This payment time limit is acknowledged, agreed upon by the parties or determined through a legally effective judgment or decision of a court, a commercial arbitration’s award or a decision of a competent authority.
- The Enterprise fails to fulfill its debt payment obligation within 03 months from the due date, including 02 cases:
(i) The Enterprise has no assets to pay off debts;
(ii) The Enterprise has assets but does not pay debts.
Accordingly, the insolvency does not mean that the Enterprise has no assets to pay debts. Even though the enterprise still has assets to pay the debt, but has not fulfilled the obligation to pay the debt on time to the creditors, it is still considered as insolvency. At the same time, if the Enterprise does well, and has profits but having a due debt more than 03 months but does not pay the debt, it is still considered as insolvent and the Court may decide to open the bankruptcy procedure.
- Enterprises are required to open bankruptcy proceedings, creditors or debtors have the right to ask lawyers to protect their legitimate rights and interests when participating in bankruptcy proceedings and must go through the registration procedure according to the law.
- In the process of resolving the bankruptcy of the Enterprise, if the legal representative of that enterprise is absent, the manager of the asset management or liquidation enterprise is the representative of that enterprise or appoints a person act as a representative of the business to carry out inventory and valuation of the Enterprise’s assets.
- In case an insolvency Enterprise has to enforce a judgement, the civil judgment enforcement agency must suspend the civil judgment enforcement of the collateral for the performance of that Enterprise’s obligations whether it is the asset of such Enterprise or not.
II. Guide regulations for housing groups being apartments
On 11 December 2020, the Ministry of Construction issued Official Letter No. 5943/BXD-KHCN guiding the following regulations for apartment building groups:
- Apartment buildings are specified in National Technical Standard GCVN 04:2019/BXD including: apartment buildings for residential purposes and apartment buildings for mixed use.
- A mixed-use apartment building is designed, and built for residential purposes and others such as office, service, commerce, etc. In case the apartment building is designed with basements, blocks layout of shophouse, kindergarten, community house and apartment part, it is defined as a mixed apartment. A mixed apartment building is a type of mixed house.
- Mixed houses have a height from 50m to 150m, which must comply with the requirements at point A2, appendix A, QCVN 06: 2020/BXD and GCVN 04: 2019/BXD.
III. PIT policy on profits remitted to investors
On 09 December 2020, Tax Department of Bac Ninh Province issued Official Letter No. 2683/CTBNI-TTHT on remitting of profits to overseas with the following contents:
- In case individual investors of enterprises withdrawing profits after enterprises have fulfilled all tax obligations towards the state, the profits remitted to investors is not subject to PIT from capital investment.
- Enterprises must send a notice on remitting profits to overseas according to the prescribed form to the supervisory tax authority at least 07 working days before the implementation.