You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

May 14, 2021

Vietnam’s Decree 21 Updates Regulations on Security for Performance of Obligations

Subscribe to Updates

On May 15, 2021, Decree No. 21/2021/ND-CP of the Government of Vietnam dated March 19, 2021, guiding the implementation of the Civil Code of 2015 on security for performance of obligations (Decree 21) will come into effect and replace Decree No. 163/2006/ND-CP of the Government dated December 29, 2006, on security transactions, as amended by Decree No. 11/2012/ND-CP (together, “Decree 163”).

One of the most significant changes of Decree 21 in comparison to Decree 163 is the new system of terminology in relation to security for performance of obligations. In particular, the new decree provides new definitions for existing terms such as “guarantor” and “guarantee” and sets out the definitions of newly added terms such as “secured obligator,” “security contract,” and “reasonable duration.” This change reflects the intention of the legislators to unify the relevant terminology in accordance with the Civil Code of 2015.

Article 4 of Decree 21 lists out principles for the application of laws and the parties’ agreements on security for performance of obligations. Accordingly, in cases where the laws on specialized areas such as land, housing, insurance, banking, aviation, or intellectual property have provisions on security assets, establishment and implementation of means of security, or enforcement of security assets, the provisions of the specialized laws will prevail. Moreover, if the parties have agreements that are different from provisions in Decree 21 but do not violate (i) fundamental principles of civil law or (ii) conditions for a civil transaction to be valid or (iii) limitations on the exercise of civil rights in accordance with the Civil Code or other relevant laws, such agreements may be enforced.

Decree 21 devotes an entire chapter to regulations on security assets (collateral) which includes definitions and descriptions of security assets and detailed provisions on 10 types of security assets including land use rights and assets attached to land, objects, valuable papers, etc. Notably, Decree 21 no longer provides that a security asset may not be attached by the courts or authorities to perform the guarantor’s other obligations if the security transaction is valid and effective against third parties and the laws do not regulate otherwise, as provided under Decree 163. This change makes the new decree consistent with the existing regulations on enforcement of civil judgments which state that mortgaged or pledged assets may still be attached for the purpose of enforcement of civil judgments, provided that the applicable conditions are satisfied.

The new decree provides detailed regulations on the establishment and implementation of means of security and enforcement of security assets. Accordingly, a means of security may be established based on the agreement of the parties via a security contract or a lien. For enforcement of security assets, Decree 21 goes into detail on the enforcement of future assets or invested mortgaged assets for the first time.

Decree 163 will still be applicable to security agreements or security interests which were established and implemented prior to May 15, 2021. The parties to such security agreements or security interests which have not been implemented or have been implemented but contain provisions different from provisions under Decree 21 may, but are not required to, agree to amend the existing security agreements or security interests to comply with the new decree.

Related Professionals

Practices

Banking and Finance

Corporate/M&A

Location

RELATED INSIGHTS​ 

March 31, 2026
Thailand’s Office of the Consumer Protection Board has opened a public hearing period on draft regulations governing the transfer of direct sales and direct marketing businesses. The draft Notification of the Direct Sales and Direct Marketing Committee: Criteria and Procedures for Business Transfer and Amendment of Registration for Direct Sales or Direct Marketing Businesses establishes a compliance-focused process with strict documentation requirements and timelines for transferring direct sales and direct marketing businesses. The proposed framework also defines the roles of transferors and transferees and establishes application procedures with the Office of the Consumer Protection Board. Applications may be submitted in person or electronically and will be examined to confirm they are complete, authentic, and compliant with legal requirements. This includes verification that: The transferee meets all required qualifications; No disqualifying factors apply; and The applicant is not subject to legal restrictions. The public hearing period is open until April 29, 2026. Direct sales and direct marketing business operators should prepare for these proposed requirements to ensure compliant implementation once the regulations are finalized.
Read More
March 27, 2026
Thailand’s National Broadcasting and Telecommunications Commission (NBTC) has publicly indicated that it is preparing a new regulatory framework for data center operators that may introduce foreign-ownership restrictions. In particular, the NBTC is considering reclassifying data center operations from a type 1 telecommunications business license to a type 3 license. If implemented, this change would subject data center operators to a significantly more stringent regulatory regime, especially in relation to foreign ownership and control. The NBTC has indicated that it intends to propose a draft framework to the NBTC board. This would be followed by a public hearing process, with a view to implementing the new rules within 2026. Under the Telecommunications Business Act B.E. 2544 (2001), as amended, telecommunications businesses operating under type 3 licenses are subject to foreign ownership restrictions, including a requirement that less than 50% of the total issued shares be held by foreign shareholders. In addition, type 3 licensees are subject to foreign dominance restrictions, which prohibit arrangements that allow foreigners to dominate the business. These foreign dominance restrictions are broad in scope and may capture various forms of direct and indirect control or influence. This includes circumstances in which a foreign national is able to influence or control the formulation of policy, management, or business operations, or the appointment of directors or senior executives. At this stage, the exact scope of the proposed rules remains unclear. Businesses with existing or planned data center operations in Thailand should therefore monitor upcoming NBTC developments in this regard and prepare for the expected public hearing process.
Read More
March 23, 2026
In March 2026, the Myanmar Investment Commission (MIC) introduced two regulatory updates affecting investors planning new investments or implementing MIC-approved projects. Minimum Investment Conditions for Tax Incentives MIC Notification No. 1/202 clarifies the minimum conditions for investments in promoted sectors to qualify for tax exemptions or relief under the Myanmar Investment Law. The notification establishes the following requirements: Investors must contribute at least 35% of the total investment amount in cash, as reflected in the relevant proposal or endorsement application. Where an investment involves a foreign loan, the investor must obtain approval from the Central Bank of Myanmar, together with a loan repayment schedule, and provide evidence that both the foreign loan proceeds and the capital contribution have been remitted in cash through an authorized dealer bank. Chinese Yuan Accepted for Investment Capital The MIC also issued Investment News Bulletin No. 1/2026, confirming that Chinese yuan (CNY) is now accepted as foreign investment capital for applications for MIC permits and endorsements, in addition to US dollars (USD). Investment funds contributed in CNY may be remitted through banks authorized to deal in foreign currency in CNY, following the same process currently applied to investments made in USD. These developments may affect how foreign investment capital is structured and remitted, as well as the availability of tax incentives for investments under the MIC framework.
Read More
March 20, 2026
Thailand’s Board of Investment (BOI) now requires data center projects to demonstrate measurable benefits for local workforce development, R&D, SME capability, and domestic supply chains to qualify for corporate income tax (CIT) exemptions. BOI Notification No. Por. 3/2569, issued on February 6, 2026, updates the requirements for projects seeking promotion under BOI category 8.2.1 (data centers). All data center projects must now submit and implement plans covering development of Thai human resources and domestic supply chain support before benefiting from any CIT exemption. Human Resources Development Plan The BOI seeks to promote local talent development beyond basic training. Plans must include the following elements: Training for data center design, construction, and operations targeting vocational students, engineering and ICT undergraduates and postgraduates, and energy and building personnel in Thailand. Joint curricula with Thai universities and technical institutes. Collaborative R&D with Thai nationals or institutions in areas including AI, resource allocation, high-performance computing, and data center hardware and systems. Thai SME upskilling in electrical and energy systems and IT services. Domestic Supply Chain Support Plan Plans must demonstrate knowledge transfer in design, construction, cooling, security, and power and water management. Projects must also include usage or installation of domestically manufactured equipment or engage specialist domestic entities. Criteria for BOI Evaluation The BOI will assess data center operators’ eligibility for CIT incentives based on two criteria: Scale requirement: Training and joint-curriculum initiatives must reach a total participants equal to at least 10 times the project headcount and run for the duration of the CIT incentive. If this threshold is not met, the applicant must also implement continuous R&D or SME skills-development plans throughout the incentive period. Substantiality test: Supply-chain plans must be substantive, meet industry standards, and show measurable development of the domestic digital and data center supply base. To ensure compliance,
Read More