What are procedures for foreign conventional loans registration in Vietnam?

What are procedures for foreign conventional loans registration in Vietnam?

Pursuant to Article 15 of the Circular 12/2022/TT-NHNN (takes effect from 15/11/2022) stipulating procedures for foreign conventional loans registration in Vietnam as follows:

1. Preparing the registration form for foreign loans which are not guaranteed by the Government:

a) If a borrower fills in the loan declaration form on the website before submitting the application for registration of the foreign loan: the borrower shall print out that form from the website, and give their signature and stamp;

b) If a borrower fails to fill in the loan declaration form on the website before submitting the application for registration of the foreign loan: the borrower shall complete the application form for registration of foreign loan given in Appendix 01 hereto.

2. Time limit for submission of application:

Borrowers are required to send 01 application for registration of foreign loan to the competent authority accorded authority over loan registration confirmation as prescribed in Article 20 of this Circular within the given time limit:

a) 30 working days from the date of signing the medium or long-term foreign loan agreement;

b) 30 working days from the date of signing the agreement to renew the foreign loan agreement from short-term to medium- or long-term for the loans specified in clause 2 Article 11 of this Circular in which the signing date of extension is within 01 year from the date of first withdrawal of loan proceeds.

c) 30 working days from the date on which the borrower is granted the Certificate of Business Registration, the License for establishment and operation under special laws, the date of signing the public-private partnership (PPP) investment contract, the date on which the parties sign the foreign loan agreement to convert the investment preparation amount into loans (whichever is later), applicable to foreign loans arising from the transfer of the investment preparation amount of the projects that have been granted an investment registration certificate into foreign loans.

d) 60 working days after the anniversary of the date of first withdrawal of loan proceeds in a full 01 (one) year:

The loans specified in clause 2 Article 11 of this Circular in which the signing date of renewal is after 01 years before the date of first withdrawal of loan proceeds; and the loans stipulated in clause 3 Article 11 hereof.

3. The State Bank shall send approval or rejection of confirmation of loan registration (with clear explanation) within the following permitted periods:

a) 12 (twelve) working days of receipt of valid and sufficient dossiers from borrowers in the event that borrowers filled in the loan declaration form on the website;

b) 15 (twelve) working days of receipt of valid and sufficient dossiers from borrowers in the event that borrowers failed to fill in the loan declaration form on the website;

c) 45 working days of receipt of valid and sufficient dossiers from borrowers in the event that loans denominated in Vietnam dong are subject to consideration and consent of the Governor of the State Bank in accordance with clause 3 Article 20 hereof.

4. Competent authorities accorded authority over confirmation of registration, registration for change of foreign loans referred to in Article 20 hereof shall assume the following responsibilities:

a) Check consistency and accuracy of dossiers submitted to apply for loans and information declared on websites; keep borrowers updated on the processing status of registration application on websites if they filled in loan declaration form on the website before submission of application for registration of the foreign loan;

b) Input information regarding loans on websites to create loan codes and store information in the database of enterprises’ foreign loans or repayment of foreign loans which are not guaranteed by the Government in the event that borrowers failed to fill in loan declaration form on the website before submission of application for registration of the foreign loan; update the dossier processing on the website in order for the borrowers to check up.

5. In respect of loans denominated in Vietnam dong, they shall be subject to consent from the Governor of the State Bank in accordance with prevailing laws and regulations on conditions for foreign borrowing, and procedures for loan registration cum procedures for requesting the Governor of the State Bank to consider approving loans; written confirmation of registration of loans cum written approval of loans issued by the Governor of the State Bank.

What documents are included in the application for foreign conventional loans registration in Vietnam?

Pursuant to Article 16 of the Circular 12/2022/TT-NHNN (takes effect from 15/11/2022) stipulating the application for foreign conventional loans registration in Vietnam as follows:

1. Loan registration form stipulated in paragraph 1 Article 15 hereof.

2. Copy of legitimate dossiers of the borrower: establishment permit, business registration certificate, cooperative or cooperative federation registration certificate and amending documents (if any) and other equivalent documents.

3. Copy or original of written proof of borrowing purposes, including:

a) As for loans for executing investment projects: Investment certificates, certificates of investment registration or decisions on approval for investment policy as per the investment law and applicable regulations of relevant laws;

b) As for loans for implementing plans for production and business other than investment projects: Plan for use of foreign loans approved by the competent authority as per the Investment Law, Enterprise Law and charter of enterprises, Cooperative Law and charter of cooperatives as well as other relevant legislative documents;

c) As for loans for restructuring foreign loans of the borrower: Foreign debt restructuring plans of the borrower approved by competent authorities in accordance with the Enterprise Law and charter of enterprises, Cooperative Law and charter of cooperatives as well as other relevant legislative documents;

d) As for loans stipulated in clauses 2 and 3 Article 11 hereof: Report stating that use of short-term loans conforms to regulations on eligibility conditions for short-term foreign borrowing (enclosed with supporting documentation such as plan for use of foreign loan of the borrower, plan for restructuring of foreign loan);

dd) Types of documents prescribed in Points a, b and c of this Clause shall not apply to the loans of state-funded commercial banks in which the State Bank is a controlling owner representative and have been approved by the State Bank in accordance with regulations on management and use of state funds in enterprises.

4. Copy of foreign document and Vietnamese translation of foreign loan agreements and agreements on renewal of short-term loans into mid-term or long-term loans (if any).

5. Copy of foreign document and Vietnamese translation of written guarantee commitment (letter of guarantee, contract of guarantee or other commitments) in terms of secured loans.

6. The copy of the competent authority’s written approval for foreign loans in accordance with laws on task and authority assignment in relation to implementation of authority, responsibilities and obligations of the state or state representatives in state-funded enterprises in accordance with management and use of state funds in enterprises for borrowers being state-owned enterprises (not applicable to loans of commercial banks in which the State Bank is a controlling owner representative and have been approved by the State Bank in accordance with regulations on management and use of state funds in enterprises).

7. Report on compliance with regulations of the State Bank on credit limits and safety ratios of credit institutions, foreign bank branches in accordance with regulations on requirements for conventional foreign loans on the latest 3-month-end date prior to the signing date of loan agreement until the latest month-end date prior to the date of submission of full application for registration of foreign loan using the form No. 02 issued herewith and written proof of incompliance with laws on credit limits and safety ratios approved by the Prime Minister or the Governor of the State Bank in accordance with laws (if applicable) in the event that borrowers are credit institutions or foreign bank branches.

8. An account service provider’s confirmation required as to the withdrawal of loan proceeds, repayment of principal and interest until the date of loan registration (if the borrower opens a foreign loan account at the account service provider) in the following cases:

a) If foreign borrowing is to serve the purpose of restructuring foreign debts: a statement given by the borrower’s account service provider on withdrawal of loan proceeds and repayment of debts incurred from foreign loans to be restructured by other foreign loans is required;

b) If foreign investors’ disbursed fund transmitted to Vietnam which have already been used for meeting pre-investment expenses are converted into mid-term or long-term foreign loans of directly foreign-invested enterprises in accordance with prevailing relevant laws on foreign direct investment in Vietnam: Copy of foreign document and Vietnamese translation of a confirmation of collection and spending transactions relating to loan origination given by the creditor’s account service provider is required;

c) As for loans stipulated in clauses 2 and 3 Article 11 hereof: a statement given by the borrower’s account service provider on withdrawal of loan proceeds and repayment of an initial short-term foreign loan is required;

d) Where the borrower fails to provide such a confirmation made by the account service provider as specified in points a, b, c hereof since:

The account service provider shuttered business or suspended operations before the borrower alters another account service provider, or;

The withdrawal of loan proceeds and repayment of the foreign loan are not required to be done via a foreign loan account as per Article 34 hereof;

The borrower chooses one of the other documents proving the withdrawal of loan proceeds and loan repayment as follows: a copy of the audited or reviewed financial statement with information proving that the borrower has received the loan amount, outstanding debt up to the time of requesting the State Bank to confirm registration of foreign loan; copy of foreign document and Vietnamese translation of the written certification of the overseas commercial bank where the borrower opens and uses a foreign currency account abroad to withdraw loan proceeds and repay the loan; copy of foreign document and Vietnamese translation of the letter of confirmation from an overseas bank about the amount of money the creditor has directly paid to the beneficiary being a non-resident for the provision of goods and services under the goods and services sale contract with the resident being the borrower.

9. Documents or invoices indicating legally distributed Vietnam-dong profits gained from direct investments of the creditor who is the foreign investor making the capital contribution to the borrower, and a statement of account service providers on distribution and transmission of profits to the home country of the creditor are required to serve as evidence of disbursement of foreign loans in respect of foreign borrowing in Vietnam dong in accordance with prevailing regulations on conditions for foreign borrowing in Vietnam dong.

10. Explanatory statement on demands for foreign borrowing in Vietnam dong in respect of foreign borrowing in Vietnam dong under the Governor’s approval in accordance with the State Bank’s prevailing regulations on conditions for foreign borrowing in Vietnam dong.

What are regulations on application for registration for changes of foreign loan in Vietnam?

Pursuant to Article 17 of the Circular 12/2022/TT-NHNN (takes effect from 15/11/2022) stipulating application for registration for changes of foreign loan in Vietnam as follows:

1. Unless otherwise provided for by clause 2 of this Article, if there is any change to contents relating to loans referred to in the confirmation of foreign loan registration or confirmation of registration for changes of foreign loan given by the State Bank, the borrower shall be responsible for making registration for changes of his foreign loan with the State Bank under the provisions of this Circular.

2. The borrower shall notify the change on the website and shall not apply for registration of changes of loans in respect of the following contents:

a) Change of time for withdrawal of loan proceeds, repayment of principal within 10 working days as against the once previously approved by the State Bank;

b) Change of the borrower's address without change of the city or province where the borrower’s head office is located; the borrower shall send a notice of address change to the competent authority accorded authority over registration, registration for change of foreign loan;

c) Change of the creditor, related information about creditors in respect of a syndicated loan that designate the representative for creditors, except when a creditor is also the representative for creditors in respect of a syndicated loan, and any change of creditors that may entail changes to the roles of the representative for creditors;

d) Change of the commercial transaction name of the account service provider, the bank providing secured transactions;

dd) Change the plan for payment of interests and fees on the foreign loan as against the one previously confirmed by the State Bank in the written confirmation of registration or registration for change of foreign loan, but do not change the method to calculate the interests and fees specified in the foreign loan agreement. The borrower is responsible for making a schedule to calculate the interests and fees to be paid so that the account service provider has a valid ground for checking and monitoring when making the money transfer;

e) Change (increase or decrease) the amount of loan proceeds to be withdrawn, repayment of principal, interests and fees within 100 currency units of the foreign loan currency as against the amount stated in the written confirmation of registration, written confirmation of registration for change of foreign loan;

g) Change of the actual amount of loan proceeds to be withdrawn or principal repayment of a specific period less than the amount stated in the loan proceed withdrawal or debt repayment plan in the written confirmation of registration or written confirmation of registration for change of the foreign loan.

3. As for the change specified in point g clause 2 of this Article, before withdrawing the loan proceeds or repaying the outstanding debt of a period, the borrower shall register the change of the loan proceed withdrawal and debt repayment as to the outstanding amount as prescribed in this Circular.

Best regards!