CHALLENGES FACED BY VIETNAMESE ENTERPRISES IN DEBT RECOVERY FROM FOREIGN ENTITIES
In the period of international integration, domestic and foreign trade and business take place regularly. Aside from potential transactions, and potential internal risks, the promotion of business between domestic and foreign enterprises leads to more and more debts. The characteristics of these debts are foreign elements, whereby debt recovery also has certain difficulties and differences. Below, TNTP will analyze if the debtor is a foreign entity, what difficulties will Vietnamese enterprises have when performing debt recovery, from which Vietnamese enterprises can draw experience when meeting with foreign investors. similar situations.
1. It is difficult to determine the exact address and legal status of the debtor
In Vietnam, we can easily look up information about Enterprises on the National Business Registration Portal, or we can go to the Enterprise address for actual verification, however, with the Debtor having addresses and headquarters in foreign countries are difficult to look up and verify information.
Firstly, about the address, in case the debtor changes the operation address, business code, representative or operation status, etc., it is also difficult to know, and we cannot go directly to the place to verify their operation status as well as review their business situation, so it is difficult for Vietnamese enterprises to get this information.
Second, identify through the Internet. In the current period, we can look up anything on the Internet, however, finding information about foreign enterprises on the Internet is still limited because many countries do not have information pages about businesses or foreign companies. This website does not allow free access.
Therefore, when taking necessary steps for debt recovery, it will be difficult for Vietnamese enterprises to determine the exact address and legal status of the debtor if the debtor is a foreign entity.
2. Difficulty about language barrier
Language in the integration process is an important means for subjects to express their opinions, views and requests. However, not all debtors use English or other common languages, not to mention that when communicating information, the parties may misunderstand each other, leading to difficulties in debt recovery. For these reasons, the language barrier is the second difficulty that Vietnamese enterprises face if the debtor is a foreign entity.
Therefore, if the parties agree that the language used is Vietnamese or English, the next steps of debt recovery will be quicker and easier.
3. Agreement on overseas dispute settlement agency
In the process of entering into a contract, the parties will agree to agree on the choice of jurisdiction to settle disputes. In case the parties agree to apply the law and the competent authority in a foreign country, it is equivalent to not being able to choose to apply Vietnamese law and resolve the dispute at the competent authority in Vietnam. .
This leads to, if a dispute arises, Vietnamese enterprises need to know the basic principles and information about the law of that country, that is, Vietnamese enterprises must study the legal regulations of the selected country to settle the dispute, in addition, they must follow the order and procedures according to the laws of their country when working with the competent authorities. Thus, Vietnamese enterprises should also consider using legal services from a law firm in the country where the law of that country is selected to resolve disputes.
4. Cost of filing a lawsuit abroad
In case the parties have agreed to choose a dispute settlement place other than Vietnam, when they want to initiate a lawsuit, the Vietnamese enterprise will have to carry out the legal procedures in accordance with the law of that country. However, the costs of filing a lawsuit at home and abroad are different, most of the cost of filing a lawsuit abroad is much more expensive than the cost of filing a lawsuit in Vietnam. Therefore, based on the value of the debt, Vietnamese enterprises should consider carefully when conducting lawsuits abroad
In addition, in order to prepare well for the lawsuit, Vietnamese enterprises should study the legal regulations of the host country, and at the same time learn about debt collection services of debt collection companies or debt collection agencies. The foreign law firm where the debtor has an address or is headquartered, these companies can work directly on behalf of the Vietnamese enterprise with the debtor, the competent authority, above all, they are not language barriers, easy exchange and search for information, and a good understanding of their country’s laws and regulations. This helps the debt recovery steps take place quickly and effectively.
If Vietnamese enterprises cannot find foreign law firms to authorize debt collection, Vietnamese enterprises can look to Vietnamese law firms, currently some Vietnamese law firms have networks cooperate with foreign law firms, they can work on behalf of Vietnamese enterprises with debtors and state agencies. Thus, it is easier and more effective to exchange, work and find information between the parties than it is for Vietnamese enterprises to find out and contact foreign law firms themselves.
From the above analysis, it can be seen that debt recovery for debtors who are foreign entities faces many difficulties, Vietnamese enterprises need to learn and anticipate the limitations and risks they face. must be well prepared in the debt collection process so that everything goes more efficiently.
Above are the experiences of TNTP on the difficulties of debt recovery between Vietnamese enterprises and debtors being foreign enterprises. Hope this article is useful to you.
TNTP and Associates International Law Firm