I. Legal basis

• Law on Bankruptcy 2014
• Law on Rehabilitation and Bankruptcy 2025

II. Refinement of the procedures and processes for Bankruptcy Resolution

Compared to the Law on Bankruptcy 2014, the Law on Rehabilitation and Bankruptcy 2025 provides clearer and more detailed regulations on the procedures and time limits for resolving petitions to initiate bankruptcy proceedings, as well as mechanisms to address delays in practice. The scope of entities entitled to file petitions for the commencement of bankruptcy proceedings has been expanded, permitting: (i) tax authorities to file such petitions against enterprises in accordance with the Law on Tax Administration; and (ii) social insurance authorities to file such petitions against enterprises where the authorities have issued notices and demands regarding overdue or evaded contributions to compulsory social insurance, unemployment insurance, and health insurance, but have received no response for three (03) consecutive years immediately preceding, in accordance with the laws on social insurance, unemployment insurance, and health insurance.

III. Expansion of the Court’s Jurisdiction over Rehabilitation and Bankruptcy matters, including cases involving foreign elements

Pursuant to Article 6 of the Law on Rehabilitation and Bankruptcy 2025, the jurisdiction of the courts has been expanded and set out in a more specific and comprehensive manner. In particular, the new law clearly designates regional People’s Courts as the competent authorities to adjudicate both rehabilitation and bankruptcy matters, rather than bankruptcy cases only as previously provided. In addition, territorial jurisdiction is more clearly defined and is assigned to be determined by the Standing Committee of the National Assembly, instead of being regulated in general terms as under the previous law.

In addition, Chapter V of the Law on Rehabilitation and Bankruptcy 2025 introduces supplementary provisions on international cooperation in the resolution of rehabilitation and bankruptcy matters. Specifically, the law clearly defines the scope and authority to request assistance from foreign courts or competent authorities during the handling of such cases. Conversely, the Law also stipulates the scope, jurisdiction, and forms of assistance that Vietnamese courts may provide, as well as the circumstances under which Vietnamese courts may refuse requests for assistance in cases involving foreign elements, including the recognition and enforcement of judgments and decisions on rehabilitation and bankruptcy issued by foreign courts or competent authorities.

IV. Separation of procedures for business rehabilitation

Pursuant to Chapter II of the Law on Rehabilitation and Bankruptcy 2025, the procedures for business rehabilitation are established as an independent legal framework, comprehensively and systematically developed, and equivalent in scope and detail to the framework governing bankruptcy proceedings.

This constitutes a significant reform compared to the Law on Bankruptcy 2014, under which rehabilitation procedures were treated merely as a derivative stage arising within the course of bankruptcy proceedings. This new approach is intended to provide enterprises and cooperatives at risk of insolvency with an opportunity to restructure and restore their business operations, thereby minimizing the need for formal declarations of bankruptcy.

• Persons entitled to file a petition for the commencement of rehabilitation proceedings include the legal representative, the owner of a private enterprise, the chairperson of the board of directors, the chairperson of the members’ council, the owner, general partners, shareholders or groups of shareholders of a company; and members or groups of members of a cooperative;
• The law further provides for the handling and acceptance of petitions for the commencement of rehabilitation proceedings; the issuance of decisions to commence or not to commence such proceedings; procedures for resolving requests for reconsideration and petitions challenging decisions on the commencement or non-commencement of rehabilitation proceedings by competent individuals or authorities; and the preparation of lists of creditors and debtors;
• Formulation of a business rehabilitation plan and determination of the timeframe for the restoration of production and business operations;  specification of permitted and prohibited business activities of the enterprise or cooperative following the decision to commence rehabilitation proceedings. During the implementation of the business rehabilitation plan, creditors and the enterprise or cooperative shall have the right to agree on amendments and supplements to such rehabilitation plan;
• Supervision of the operations of the enterprise or cooperative following the issuance of the decision to commence rehabilitation proceedings; supervision of the implementation of the business rehabilitation plan; procedures for the temporary suspension of civil judgment enforcement; and the circumstances under which the Court shall issue a decision to terminate rehabilitation proceedings, together with the legal consequences of such termination and the implementation of the business rehabilitation plan.
• The creditors’ meeting; the duties and powers of participants in the creditors’ meeting. The recognition of resolutions of the creditors’ meeting approving the business rehabilitation plan of the enterprise or cooperative, whereby such resolution shall be deemed adopted when creditors representing at least 65% of the total outstanding debt of the voting creditors vote in favor.

V. Digitalization of Rehabilitation and Bankruptcy Procedures

Article 23 of the Law on Rehabilitation and Bankruptcy 2025 introduces additional provisions stipulating that procedures handled by competent state authorities shall be conducted in an automated and digitalized manner on online platforms, with a view to ensuring efficiency and saving time. In line with practical trends, the draft Law provides new regulations on the resolution of rehabilitation and bankruptcy matters through online procedures. The procedures that may be carried out on online platforms include:

• Issuance, service, notification, and transmission of documents;
• Filing of petitions for the commencement of rehabilitation or bankruptcy proceedings;
• Payment of fees, advances on costs, and expenses related to rehabilitation and bankruptcy;
• Provision and submission of documents and evidence;
• Hearings for the resolution of rehabilitation and bankruptcy matters;
• Judicial entrustment in the resolution of rehabilitation and bankruptcy matters;
• Other activities as prescribed by law.

VI. About Us, Hankuk Law Firm

■ Hankuk Law Firm – Introduction

The goal of the legal services provided by HANKUK LAW FIRM is to support businesses, investors, and people. Our organization employs skilled Korean lawyers, partners, and professionals to provide legal services to businesses related to corporations and litigation.

To support the startup process, our lawyers and staff provide a wide range of services, including business law consulting, tax and immigration law consulting, real estate services, business consulting, marketing and communications, human resources, product distribution, franchise options, etc. We provide expert advice on every aspect of your business needs.

To protect the legitimate rights and interests of our clients and achieve the best results, we provide legal advice and participate in civil lawsuits related to business, labor, marriage, family, and inheritance.

■ Contact us now

For reliable and effective legal advice, please contact HANKUK LAW FIRM now. We are committed to providing you with the best possible answers and our team of experienced lawyers has extensive knowledge in many legal fields. We are always here to provide the most competent and dedicated support, whether you are dealing with contractual issues, commercial disputes or need guidance on foreign investment. HANKUK LAW FIRM is honored to have assisted hundreds of domestic and international clients in skillfully resolving complex legal issues as their trusted legal partner. Do not let legal issues hinder your success. Let us accompany you towards legal achievement and comfort. For prompt guidance and support to ensure your rights are always maintained at the highest standards, contact HANKUK LAW FIRM now.

■ Contact Hankuk Law Firm:

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