Tiếng Việt
中文Yes. Debts purchased and received by the Debt and Asset Trading Corporation (DATC) may be converted into capital contributions in an enterprise, as provided in Article 16 of Decree No. 129/2020/ND-CP.
1. Forms of debt settlement by DATC
Under Article 16 of Decree No. 129/2020/ND-CP, DATC may handle purchased and received debts through the following forms:
Related services
Debt Recovery Advisory
If your business is facing overdue debts or considering legal steps for recovery, ANT Legal can help review documents, evidence and practical legal options.
- Directly recovering debts from debtors and related parties in cash, assets, or debt instruments;
- Managing, investing in, exploiting, and disposing of secured assets to recover debts;
- Selling debts by auction, competitive bidding, or direct agreement;
- Receiving the transfer of debt repayment obligations from debtors to third parties;
- Converting debts into capital contributions in enterprises;
- Restructuring debts (adjusting terms, extensions, debt freezing, adjusting interest rates).
2. Conditions for converting debt into capital contributions
The conversion of debt into capital contributions in an enterprise must:
- Be based on a plan approved under DATC’s delegated authority;
- Obtain the consent of the debtor enterprise and comply with the Law on Enterprises regarding capital increases and the conversion of capital contributions;
- Ensure the principle of preservation and development of State capital in accordance with the law on State capital management in enterprises (Law No. 68/2025/QH15, effective from 01 August 2025).
3. Legal consequences
After the conversion of debt into capital contributions, DATC becomes the owner of the capital contribution/shares in the enterprise corresponding to the value of the converted debt, and holds the rights and obligations of a member/shareholder under the Law on Enterprises 2020.
Notes on application
The conversion of debt into capital contributions simultaneously involves debt management legislation (Decree No. 129/2020/ND-CP), enterprise law, and State capital management law. Enterprises should carefully evaluate the plan before implementation.
Common risks to note
- Carrying out the conversion without an approved plan;
- Failing to comply with capital increase procedures and registration of changes to enterprise registration details;
- Unsuitable valuation of the converted debt.
How can ANT Legal help?
ANT Legal assists in reviewing debt-to-equity conversion plans, related legal procedures, and advising debtor enterprises. For advice, please contact our lawyers at ANT Legal.
