What are regulations on foreign borrowing and foreign debt repayment accounts of the borrower that is not a commercial bank or foreign bank branch in Vietnam?

What are regulations on foreign borrowing and foreign debt repayment accounts of the borrower that is not a commercial bank or foreign bank branch in Vietnam? - Image from Internet

The regulations on foreign borrowing and foreign debt repayment accounts of the borrower that is not a commercial bank or foreign bank branch in Vietnam are stipulated under Article 24 of the Circular 03/2016/TT-NHNN (amended by Clause 2 Article 1 of the Circular 05/2016/TT-NHNN) as follows:

1. Foreign borrowing and foreign debt repayment account refers to the payment account that the borrower opens at an account service provider to withdraw fund and repay debts incurred from foreign loans and other money transfer activities relating to foreign borrowing and foreign debt repayment and foreign loan guarantee.

2. For borrowers that are foreign direct investment enterprises:

a) Medium-term and long-term foreign borrowings: The account for foreign borrowings and repayment shall be the account for direct investment. Apart from receipts and spending related to foreign borrowings and repayment as stated in Article 26 and Article 27 of this Circular, borrowers being foreign direct investment enterprises shall utilize the account for direct investment (also defined as the account for foreign borrowings and repayment) for other receipts and spending related to foreign direct investments in Vietnam as per current laws on management of foreign exchange with regard to foreign direct investments in Vietnam.

b) Short-term foreign borrowings: Borrowers can utilize the account for direct investment as stated in Point a of this Section or an account for foreign borrowings and repayment (as distinct from the account for direct investment) to process receipts and spending related to foreign borrowings. Each short-term foreign borrowing shall only be processed through 01 (one) bank that provides account services. Borrowers can utilize 01 (one) account for 01 (one) or various short-term foreign borrowings. Receipts and spending through such account are defined in Article 26 and Article 27 of this Circular.

3. The borrower that is not a directly foreign-invested enterprise must open a foreign borrowing and foreign debt repayment account at an account service provider in order to perform money transfer transactions relating to foreign loans (including fund withdrawal, principal and interest payment). Each foreign loan shall be allowed to open its account at only 01 (one) account service provider. The borrower may use 01 (one) account for 01 (one) or multiple foreign loans. Monetary collection or spending of these accounts shall be stipulated by Article 26 and 27 hereof.

Above are regulations on foreign borrowing and foreign debt repayment accounts of the borrower that is not a commercial bank or foreign bank branch in Vietnam. Please refer to the Circular 03/2016/TT-NHNN for further information.

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