Government Decree No. 39/2014/ND-CP (7 May 2014) has been issued to regulate operation of financial companies and financial leasing companies. The Decree applies to financial companies and financial leasing companies established and operating in Viet Nam, and organisations and individuals related to their operations.
Operation of financial companies
1. General conditions for a financial company to implement banking operations are:
(1) The banking operations must be specified in the permit for the establishment and operation of a financial company ("Permit") issued by the State Bank of Vietnam (SBV).
(2) The financial company must have qualified staff, facilities, technology, means, equipment and internal policies to implement banking operations specified in the Permit.
(3) For banking operations related to foreign exchange, the financial company must comply with regulations on the management of foreign exchange.
(4) The financial company must satisfy the requirements for banking operations stipulated by SBV.
2. The financial company, subject to satisfying requirements, is entitled to or may:
(1) Issue certificates for deposits, bonds, treasury bills and bonds to raise funds from organisations.
(2) Borrow from local and international credit and financial institutions.
(3) Borrow from the SBV in the form of refinancing.
(4) Issue loans including installment loans and customer loan.
(5) Implement the operation of bank guarantees.
(6) Implement factoring activities.
(7) Issue credit cards.
3. The financial company, subject to satisfying requirements, may also implement financial leasing activities.
Operation of financial leasing companies
1. Rights and obligations of lessor
The lessor is the owner of the leased assets during the lease term and is not affected if the lessee goes bankrupt, dissolves or has other disputes or lawsuits. The lessor is entitled to require the lessee to make a deposit and have other security measures, inspect the management and use of leased assets and transfer its rights and obligations in the financial leasing contract ("Contract") to another financial leasing party. The lessor can also ask the lessee to pay compensation for damage, recover the leased assets when the lessee does not use and operate them under the terms of the Contract, recover leased assets which are damaged and cannot be restored or repaired, and require the lessee to pay outstanding rent and other expenses arising for the recovery of leased assets.
The lessor must assess the financial capacity and reputation of the provider and the leased assets, buy and import the leased assets as agreed in the Contract, and register ownership and buy insurance for those assets. The lessor is not responsible for delivering or delivering improperly leased assets under conditions agreed between the lessee and the provider.
2. Rights and obligations of lessee
The lessee is entitled to receive and use the leased assets, decide to purchase the assets or continuing leasing after the end of the lease term, require the lessor to compensate for damage if it breaches the Contract.
The lessee is responsible for its choice of leased assets. The lessee must use the leased assets for the right purpose, make payment of rent and other expenses under the Contract, and bear risks of loss of leased assets and expenses for maintenance, repairs or replacement of leased assets during the lease term. The lessee must not use the leased assets for mortgages or securing other obligations, and make full payments of outstanding rent and other expenses incurred when the leased assets are lost, damaged or cannot be restored or repaired.
3. Financial leasing contract
The Contract may be terminated early in one of the following cases:
(1) The lessee does not pay rental or breaches conditions under the Contract.
(2) The lessee is declared bankrupt or dissolves.
(3) The lessor breaches conditions outlined under the Contract.
(4) The leased assets are lost or damaged and cannot be restored or repaired.
(5) The lessee pays rental for the remaining term under the Contract.
The Decree takes effect on June 25, 2014 and replaces Government Decrees No 79/2002/ND-CP (4 October 2002), 81/2008/ND-CP (29 July 2008), 16/2001/ND-CP (2 May 2001), 65/2005/ND-CP (19 May 2005) and 95/2008/ND-CP (25 August 2008).