1. Currently, the debt sale and purchase activity of entities not being credit institutions is no longer a conditional business activity. Specifically, the Law on Investment of the National Assembly dated 17 June 2020 (Investment Law 2020) has removed the business line of “debt sale and purchase” from the list of industries and trades in which business investment is conditional. Under the explanation of the drafting committee of the Investment Law 2020, the subject of a debt sale and purchase transaction can be any business entity, the debt sale and purchase service is only a supporting service which helps to promote the debt sale and purchase transactions, and the current system of the civil and commercial law relating to the sale and purchase activities have sufficient regulations to govern the debt sale and purchase transactions as well as the transactions supporting the debt sale and purchase (http://vibonline.com.vn/wp-content/uploads/2019/10/4._Thuyet_minh_du_thao_Luat.pdf).
2. Decree 69/2016/ND-CP of the Government dated 1 July 2016 on conditions applicable to debt sale and purchase service (Decree 69/2016) was also repealed by Decree 31/2021/ND-CP of the Government dated 26 March 2021. Accordingly, Decree 69/2016 ceased its effect from 1 January 2021.
3. Therefore, the debt sale and purchase activity of entities not being credit institutions is not governed by any specific regulations but will be subject to the general provisions of the Civil Code of the National Assembly dated 24 November 2015 (Civil Code 2015).
4). Under Article 365.1 the Civil Code 2015, a party having the right to demand the performance of an obligation may transfer such right to demand to a subrogatee of the obligee as agreed, except in the following cases:
(a) the right is the right to demand support or the right to demand compensation for any loss and damage resulting from harm to life, health, honour, dignity or reputation; or
(b) the obligee and the obligor agree or the law provides that the right to demand may not be transferred.
5. Under Article 274 the Civil Code 2015, obligations are defined as acts whereby one or more subjects (hereinafter referred to as obligors) must transfer objects, transfer rights, pay money or provide valuable papers, perform acts or refrain from performing certain acts in the interests of one or more other subjects (hereinafter referred to as obligees). One of grounds to arise obligations is contract.
6. Accordingly, if a seller of goods has the right to demand the buyer of goods to perform the payment obligation under the goods sale and purchase agreement between the parties (i.e. receivables), then assuming that the seller and the buyer do not agree that the right to demand payment of receivables may not be transferred, the seller can transfer such right to an entity engaging in debt sale and purchase business under a debt sale and purchase agreement to be signed between the parties. Such debt sale and purchase agreement will be subject to the governance of the Civil Code 2015.
7. Bearing in mind that the consideration on whether the debt sale and purchase activity of entities not being credit institutions is similar to the credit granting activities under the Law on Credit Institutions of the National Assembly dated 16 June 2010 (as amended) (Law on Credit Institutions 2010) and is subject to the Law on Credit Institutions 2010 or not is out of scope of this post.