Can IP Rights Be Pledged as Bank Loan Collateral?

A company owns a famous trademark or a valuable patent but lacks tangible assets for collateral — can it pledge its intellectual property rights to secure a bank loan? The law says yes, but the road from “legally permitted” to “actually borrowing money” still has practical hurdles. This article analyzes Vietnam’s legal framework for mortgaging IP rights.

Does the law allow mortgaging IP rights?

Yes. The legal basis includes:

Article 105 of the Civil Code 91/2015/QH13: property includes property rights; property rights in IP subject matter constitute property.
Article 309 of the Civil Code: mortgage of property means a party uses its own property to secure performance of an obligation without delivering the property to the other party. IP rights — as property rights — qualify as mortgageable property.
Law 131/2025/QH15 (amending the IP Law) promotes commercial exploitation of IP rights, including forms such as capital contribution and mortgage.

Legally, therefore, owners may absolutely mortgage their IP rights to borrow.

Prerequisites for IP rights to be mortgaged

For the mortgage to stand on solid ground, the IP rights must:

Have been established — the rights exist under the law (e.g., a protection certificate granted for industrial property rights);
Remain valid at the time of mortgage;
Belong lawfully to the mortgagor;
Be free of disputes over ownership or use.

Banks — as mortgagees — will scrutinize these conditions before lending, since the recovery value of the collateral depends directly on the solidity of the rights.

Mortgage contract and secured-transaction registration

An IP mortgage contract must be in writing. For the transaction to be effective against third parties and to establish payment priority, secured transaction registration is required:

Where to register: the Transaction and Asset Registration Center of the National Registration Agency for Secured Transactions, Ministry of Justice — not the Intellectual Property Office. This is a common confusion: secured-transaction registration belongs to secured-transactions law and runs through the secured-transaction registry system (Article 4 and Article 10.5 of Decree 99/2022/ND-CP).
How to register: online registration is available (Articles 24 and 56 of Decree 99/2022/ND-CP).
The general framework on security for performance of obligations: Decree 21/2021/ND-CP guiding the Civil Code.

Technically precise wording: registration of a security interest over property rights/movables at the Secured Transaction Registration Center — one should not assert a standalone regulation expressly governing “registration of industrial-property mortgages at the Center.”

Practical barriers: why banks remain cautious

Both sides must be stated honestly: the law permits it, but banks in practice are very cautious about accepting IP mortgages because:

Independent valuation is difficult: IP value depends on many intangible factors (brand reputation, exploitation potential) with no uniform valuation benchmark;
Liquidation is hard: the market for IP assignment is underdeveloped, making it difficult to sell the rights to recover debts;
Risk of invalidation or expiry during the loan term erodes collateral value.

Accordingly, do not promise “easy borrowing” — companies need solid legal files on the rights, an independent valuation report, and a convincing repayment plan. Interest rates and loan-to-value ratios are each bank’s own policy and cannot be generalized.

Practical recommendations

Perfect the rights file: valid, undisputed protection certificates, with any changes registered at IP Vietnam.
Independent valuation: engage a reputable valuation organization to appraise the IP rights as a basis for bank negotiations.
Draft a tight mortgage contract: precisely describe the rights, the mortgage scope, and the duty to maintain the rights’ validity during the mortgage term.
Register the security interest at the Secured Transaction Registration Center (Ministry of Justice) to secure payment priority.
Engage banks early: discuss upfront whether IP collateral is acceptable to avoid wasted time.

Frequently asked questions

Must the “asset” be handed over to the bank in an IP mortgage?

No. Under Article 309 of the Civil Code, a mortgage secures an obligation without delivery of the property — the mortgagor keeps exploiting and using the IP rights during the mortgage term (unless otherwise agreed).

Is an IP mortgage registered at the Intellectual Property Office?

No. Secured-transaction registration is filed at the Transaction and Asset Registration Center of the National Registration Agency for Secured Transactions under the Ministry of Justice (Decree 99/2022/ND-CP), not at the Intellectual Property Office.

Can copyright be mortgaged?

In principle, yes: property rights in IP subject matter — including copyright — are property under Article 105 of the Civil Code and can be mortgaged. Note that draft provisions adding specific rules on copyright mortgage remain drafts, not current law.

What if the bank refuses IP rights as collateral?

Accepting collateral is each bank’s credit policy. Companies may approach multiple banks, add other collateral, or use the IP rights in other more suitable financing structures.

Legal references

Civil Code 91/2015/QH13 — Article 105 (property), Article 309 (mortgage of property).
Decree 21/2021/ND-CP (effective 15/5/2021): guiding the Civil Code on security for performance of obligations.
Decree 99/2022/ND-CP (effective 15/01/2023, replacing Decree 102/2017/ND-CP) — Article 4, Article 10.5, Articles 24 and 56: secured-transaction registration.
Law 131/2025/QH15: promoting commercial exploitation of IP rights.