Debt Collection Agencies Now Legal in Vietnam

Entrepreneurs in Vietnam have been granted the permission to open debt collection agencies recently, according to a newspaper in Vietnam.

Executive Decision No. 104/2007/ND-CP was singed last week by Vietnamese Prime Minister Nguyen Tan Dung, according to state-owned English language newspaper the Viet Nam News.  The decision calls for all enterprises wishing to engage in third-party debt collections to be registered and licensed by the government.  Any company operating as a collection agency must operate exclusive as a collector and can only pursue privately-incurred debts.  Collectors will not be allowed to go after government debts or judgments.  Prior to the decision, private collection agencies were not allowed to exist in the communist country.

The decision came as Vietnam’s President, Nguyen Minh Triet, was preparing for a trip to the U.S.  Triet visited the White House on Friday in a low-key meeting that marked the first trip by a Vietnamese head-of-state to the U.S. since the Vietnam War.  Triet went to Washington to formally normalize trade relations with the U.S. that have come about in his country recently with economic reforms, membership in the World Trade Organization, and an explosive economic growth rate that is second only to China in the region.

China itself recently began allowing collection agencies to operate in its country.  In fact, the economic reforms currently underway in Vietnam mirror the ones experienced by China for the past two decades.

Last year, Vietnam’s government-reported GDP growth rate was 8.17 percent after the country saw growth rates steadily in the 7 percent range – or higher — every year since 1990, save for the late 1990s during the Asian financial crisis.  In 1986, Vietnam abandoned their Marxist economic planning model and began to allow private markets to enter the economy.