Partner Hung Q. Nguyen shared his expertise with Lexology regarding securitisation transactions in Vietnam covering SPV and its forms, governing law, registration, and more.
Which forms can special purpose vehicles take in a securitisation transaction?
In Vietnam, the SPV acts as an asset management, acquisition and debt restructuring enterprise. To carry out debt acquisition, it is necessary to establish an enterprise. Vietnamese issuance vehicles can either take the legal form of a stock corporation or a limited liability company.
SPV formation process
What is involved in forming the different types of SPVs in your jurisdiction?
In Vietnam, all companies with debt trading service must have a minimum charter (equity) capital of 100 billion dong regardless of the form of enterprise. The timing for forming such a company is relatively short (ie, the formation of the company can be done within a few working days by registering with the company registrar). However, if a foreign shareholder is taking part in the formation of such SPV, the process could take much longer and the outcome can be uncertain.
Is it possible to stipulate which jurisdiction’s law applies to the assignment of receivables to the SPV?
The parties to a receivables purchase agreement are not free to choose the governing law. The assignment of receivables to the SPV is a civil transaction; thus, it is subject to the Civil Code. Besides, it is also governed by the Law on the state bank and Law on Credit Institutions.
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