On December 11, 2025, the National Assembly enacted Law No. 142/2025/QH15 on Bankruptcy and Recovery. This law takes effect from March 1, 2026.
Below are the notable new provisions of the 2025 Bankruptcy and Recovery Law (effective from March 1, 2026), especially those affecting businesses:
- Prioritizing Recovery Procedures:
Principle: The law emphasizes prioritizing recovery procedures for businesses and cooperatives facing financial difficulties (Article 3.1).
Support Policies: The State commits to supporting businesses through policies on taxes, fees, credit, interest rates, land, technology, digital transformation, and other measures to restructure and restore business operations (Article 4.1).
Impact on Businesses:
- Businesses have more opportunities to restructure and recover instead of being immediately declared bankrupt.
- Businesses gain access to support policies from the State, reducing the financial burden during the recovery process.
- Creditors and businesses are encouraged to seek solutions for debt and business restructuring in a cooperative manner.
- More Specific Regulations on Solvency:
Risk of Insolvency: The enterprise fails to pay its debts due within 6 months or debts due but not yet more than 6 months ago (Article 5.1).
Insolvency: The enterprise fails to fulfill its payment obligations after 6 months from the due date (Article 5.2).
Impact on the Enterprise:
- Enterprises need to closely monitor their financial situation to proactively respond when there are signs of insolvency.
- Helps enterprises identify financial difficulties early, thereby taking timely intervention measures to avoid bankruptcy.
- Changes in Jurisdiction:
Regional People’s Courts: Have jurisdiction to resolve cases of rehabilitation and bankruptcy (Article 6.1). The territorial scope of jurisdiction will be determined by the Standing Committee of the National Assembly.
Provincial People’s Courts: Have jurisdiction to resolve requests for review and appeals against bankruptcy declaration decisions.
Supreme People’s Court: Have jurisdiction to review decisions of provincial People’s Courts and resolve jurisdictional disputes between regional People’s Courts.
Impact on Businesses:
- Businesses should note the changes in jurisdiction to file applications in the correct place, avoiding delays in processing.
- The decentralization of jurisdiction may help resolve cases more quickly and efficiently.
- Simplified Bankruptcy and Recovery Procedures:
Applicable conditions: Applies to small and micro-enterprises, enterprises with few creditors and low total debt (Articles 68 and 70).
Time: Shortens the time required to complete the procedure.
Resolution approval rate: Lowers the required creditor ratio for resolution approval.
Impact on businesses:
- Helps small and medium-sized enterprises quickly resolve financial issues, minimizing costs and time.
- Facilitates more orderly recovery or bankruptcy.
- Invalid Transactions:
Timeframe: Extended timeframe for transactions that may be considered invalid (6 months before the date the Court issues a decision to open bankruptcy proceedings, 18 months for transactions with related parties) (Article 49).
Types of transactions: Transfer of assets at non-market value, conversion of unsecured debt into secured debt, payment in favor of one creditor, gift of assets, etc.
Impact on businesses:
- Businesses need to strictly comply with regulations on asset transactions to avoid being considered as concealing assets.
- Creditors need to be cautious when receiving payments from businesses showing signs of insolvency to avoid being considered to have an illegal advantage.
- Support Measures and Termination of Social Insurance Contribution Suspension:
- Businesses and cooperatives undergoing recovery procedures will have their tax debts written off and contributions to the retirement and death benefit fund temporarily suspended. The duration of this suspension is as stipulated by law (Article 30.3).
- New amendments and additions to other relevant laws:
- Civil Procedure Code No. 92/2015/QH13 (amending and supplementing point g, clause 1, Article 214 to refer to the provisions of the law on rehabilitation and bankruptcy)
- Social Insurance Law No. 41/2024/QH15 (amending and supplementing point a, clause 1, Article 37 to add the case where the employer, when applying for rehabilitation procedures as prescribed by the law on rehabilitation and bankruptcy, may temporarily suspend contributions to the retirement and death benefit fund for a maximum of 12 months)
- Law on Organization of People’s Courts No. 34/2024/QH15 (amending and supplementing point c, clause 2, Article 4 to assign the Standing Committee of the National Assembly to regulate the territorial scope of jurisdiction of some regional People’s Courts to handle rehabilitation and bankruptcy cases)
- Law on Fees and Charges No. Law No. 97/2015/QH13 (amending and supplementing Section 6.4.I.B of Appendix No. 01, List of Fees and Charges)
The Law takes effect from March 1, 2026.
The Bankruptcy Law No. 51/2014/QH13, which has been amended and supplemented in some articles by Law No. 85/2025/QH15, ceases to be in effect from the date this Law takes effect.
