Vietnam: What are government bonds? Who can buy Government bonds and what are the benefits of investing in Government bonds?
What are government bonds according to Vietnamese regulations?
Pursuant to the provisions of Clause 1 Article 2 of Decree 01/2011/ND-CP stipulating the concept of government bonds specifically as follows:
Article 2. Explanation of terms
In this Decree, the following terms are construed as follows:
1. "Government bonds" are bonds issued by the Ministry of Finance to raise funds for the state budget or for and specific investment projects and programs within the scope of the state's investment.
Who can buy government bonds according to Vietnamese regulations?
According to the provisions of Article 7 of Decree 01/2011/ND-CP stipulating the subjects to buy specific government bonds as follows:
Article 7. Bond buyer
1. Bond buyers are Vietnamese organizations and individuals and foreign organizations and individuals.
2. Vietnamese organizations are not permitted to use funds allocated by the state budget to buy bonds.
Thus, the beneficiaries of buying government bonds include Vietnamese organizations and individuals and foreign organizations and individuals.
Vietnam: What are government bonds? Who can buy Government bonds and what are the benefits of investing in Government bonds?
What are the types of Government bonds in Vietnam?
As for the regulations on the type of Government bonds, currently, there are 3 types of government bonds:
Treasury bills
Treasury bills are government bonds with a maturity of 13 weeks, 26 weeks or 52 weeks and the issuing currency is the Vietnamese dong.
Treasury bonds
Treasury bonds are government bonds with a maturity of 01 year or more and the issuing currency is Vietnamese currency or freely convertible foreign currency.
Fruits of building the Fatherland
Fatherland construction bonds are government bonds with a term of one 01 year or more, the issued currency is Vietnamese dong and is issued to mobilize capital to invest in the construction of national important works and other essential works for production, life, creating material and technical foundations for the country.
Features of Government bonds
For regulations on the characteristics of government bonds, government bonds have the following specific characteristics:
Publishers
- The subject of issuing government bonds is the Ministry of Finance of Vietnam.
- Bond issuers guaranteed by the Government are enterprises, state policy banks and financial and credit institutions subject to government guarantee.
Terms of government bonds
For bond maturities:
Bonds guaranteed by the Government, local government bonds with a term of 1 year or more, except treasury bills issued by the Ministry of Finance,
Bond par value:
The subject of bond issuance is the person who makes decisions about the face value of a bond. In the case of bonds listed on the Stock Exchange, the par value of the bonds shall be regulated in accordance with the regulations on listing and trading securities.
Currency for issuing and paying bonds
For government bonds, bonds guaranteed by the Government, local government bonds when issued domestically, the currency for bond issuance and payment is Vietnamese dong. In case government bonds issued domestically in freely convertible foreign currencies shall comply with the scheme approved by the Prime Minister.
In case of government bonds, bonds guaranteed by the Government are issued to the international market in foreign currencies according to schemes approved by competent authorities.
The currency used to pay the principal and interest of bonds of the same type as the currency when issued and the use of foreign currency as the currency for issuing and paying bonds must ensure compliance with the provisions of the law on foreign exchange management.
Form of bond
For regulations on the form of government bonds, bonds are issued in the form of certificates, bookkeeping entries or electronic data. The bond issuer will make a specific decision on the form of bond for each issuance.
Bond interest rates
Issuers of decisions in the interest rate framework prescribed by the Ministry of Finance for interest rates on Government bonds, bonds guaranteed by the Government, local government bonds issued in the country
Bonds are issued at fixed interest rates, floating rates and discount rates according to the issuance plan approved by the competent authority.
What are the benefits of investing in government bonds in Vietnam?
For regulations on benefits when investing in Government bonds, Article 8 of Decree 01/2011/ND-CP specifies as follows:
Article 8. Rights and tax obligations of bond holders
1. Rights of bondholders
a) The bond holders are guaranteed for full payment and in due time when the principal and interest of bonds come to maturity.
b) The bond owner can use the bonds for transfer, donation, inheritance, mortgage discount in civil and credit relations in accordance with the current regulations of law.
2. Tax obligations of bond holders
The bond owner shall carry out the corporate income tax payment obligation or personal income tax for income arising from interest from government bonds, government-guaranteed bonds, local government bonds in accordance with current tax law. The exemption of corporate income tax or personal income tax for income from government bonds issued to the international market shall be decided by the government.
At the same time, Government bonds are considered a fairly stable and suitable investment channel for investors who want to receive annual fixed income from interest and can be easily resold to investors and the risk from Government bonds is also somewhat smaller than other types of investment in the stock market. securities.
Above is some of the information we provide to you about Government bonds. Best regard!
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