What is the maximum foreign loan amount without the Government's guarantee used for restructuring the foreign debts of borrowers in Vietnam?
- What is the maximum foreign loan amount without the Government's guarantee used for restructuring the foreign debts of borrowers in Vietnam?
- What are the responsibilities of foreign loan borrowers without the Government's guarantee in Vietnam?
- What are the foreign borrowing costs without the Government's guarantee in Vietnam?
What is the maximum foreign loan amount without the Government's guarantee used for restructuring the foreign debts of borrowers in Vietnam?
Pursuant to the provisions in Clause 3, Article 18 of Circular 08/2023/TT-NHNN as follows:
Limit on foreign loans
1. If the foreign loan capital is used for executing an investment project:
a) The sum of outstanding principal amounts of the borrower’s medium/long-term domestic and foreign loans (including short-term loans that are extended and overdue short-term loans that are treated as medium/long-term loans) used for executing its investment project shall not exceed the limit on borrowed capital of that investment project;
b) The limit on borrowed capital of the investment project prescribed in Point a Clause 1 of this Article is the difference between the total investment capital of the investment project and the paid-in capital of investors as specified in the investment certificate, investment registration certificate or written approval for investment guidelines.
2. If the foreign loan capital is used for executing business plans or other projects of the borrower:
The sum of outstanding debts of the borrower’s medium/long-term domestic and foreign loans (including short-term loans that are extended and overdue short-term loans that are treated as medium/long-term loans) used for this purpose shall not exceed total demand for borrowed capital defined in its plan for use of foreign loan capital approved by an authorized approving authority.
3. If the foreign loan capital is used for restructuring foreign debts of the borrower:
a) The maximum foreign loan amount used for restructuring the borrower’s foreign debts shall not exceed the sum of outstanding principal, unpaid interests and relevant expenses of the existing foreign loan, and expenses associated with the new loan determined when restructuring its foreign debts;
b) If the new foreign loan is a medium/long-term foreign loan, within 05 working days from the day on which the new foreign loan capital is withdrawn, the borrower shall repay its existing foreign loan debts so that it shall meet foreign loan limit requirements laid down in Clause 1 and Clause 2 of this Article after this 05-day period;
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Thus, pursuant to the above-mentioned provisions, the maximum foreign loan amount without the Government's guarantee used for restructuring foreign debts of borrowers in Vietnam shall not exceed the sum of outstanding principal, unpaid interests and relevant expenses of the existing foreign loan, and expenses associated with the new loan determined when restructuring its foreign debts.
What are the responsibilities of foreign loan borrowers without the Government's guarantee in Vietnam?
Pursuant to the provisions of Article 19 of Circular 08/2023/TT-NHNN, the responsibilities of foreign loan borrowers without the Government's guarantee in Vietnam are as follows:
- Comply with eligibility requirements for foreign loans laid down in Circular 08/2023/TT-NHNN and relevant law regulations on foreign exchange management.
- Comply with regulations of the civil code, laws on enterprises, investment, secured transactions, and anti-money laundering, specialized laws, relevant laws and international practices when entering into foreign loan agreements and getting foreign loans.
- Assume legal responsibility for the accuracy and truthfulness of documents proving the purposes of the foreign loan, and use foreign loan capital for the purposes defined in such documents as prescribed in Clause 2 Article 14 and Clause 4 Article 17 of Circular 08/2023/TT-NHNN.
- Retain adequate documents proving the borrower’s use of the foreign loan capital for proper purposes as prescribed in Article 14 and Article 17 of Circular 08/2023/TT-NHNN, documents on changes in the capital demand statement (if any) as prescribed in Clause 4 Article 7 of Circular 08/2023/TT-NHNN, and present them to serve competent authorities’ inspection of use of foreign loan capital.
- Keep a record of each idle amount of money in case the borrower makes term deposits at credit institutions and FBBs according to the rules for using foreign loan capital in Article 6 of Circular 08/2023/TT-NHNN, and present it together with the documents proving the borrower’s compliance with Article 6 of Circular 08/2023/TT-NHNN to serve competent authorities’ inspection of use of foreign loan capital, when required.
What are the foreign borrowing costs without the Government's guarantee in Vietnam?
Pursuant to the provisions of Article 12 of Circular 08/2023/TT-NHNN as follows:
Foreign borrowing costs
1. The borrower and relevant parties shall comply with current law regulations on foreign borrowing interest rate and other costs associated with the foreign loan when reaching agreements on foreign borrowing costs.
2. In order to administer the limit on conventional foreign loans, where necessary, the SBV’s Governor shall decide to apply the foreign borrowing cost requirement; decide and announce the ceiling level of foreign borrowing costs in each period.
According to the above-mentioned contents, when applying for foreign loans, the borrower and relevant parties shall comply with current law regulations on foreign borrowing interest rate and other costs associated with the foreign loan when reaching agreements on foreign borrowing costs.
In addition, in order to administer the limit on conventional foreign loans, where necessary, the SBV’s Governor shall decide to apply the foreign borrowing cost requirement; and decide and announce the ceiling level of foreign borrowing costs in each period.
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