What are regulations on foreign conventional loans term as the basis for determination of registration obligations in Vietnam?

What are regulations on foreign conventional loans term as the basis for determination of registration obligations in Vietnam?

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

1. In respect of loans referred to in clause 1 Article 11 hereof, loan term shall be determined from the scheduled date of first withdrawal of loan proceeds to the scheduled date of final principal repayment under terms and conditions of foreign loan agreements.

2. In respect of loans referred to in clause 2 Article 11 hereof, loan term shall be determined from the date of first withdrawal of loan proceeds to the scheduled date of final principal repayment under terms and conditions of foreign loan and foreign loan renewal agreements.

3. In respect of loans referred to in clause 3 Article 11 hereof, loan term shall be determined from the date of first withdrawal of loan proceeds to the scheduled date of final principal repayment.

4. The date of withdrawal of loan proceeds defined in this Article is

a) The date on which the loan proceed is credited to the borrower's account for loans disbursed in cash;

b) The date on which the creditor makes payment to the non-resident for provision of goods or services under goods or services sale contracts with the resident being the borrower;

c) The date on which the borrower is recorded as fulfilling the payment obligation to the creditor in case the parties choose to withdraw proceeds from the medium and long-term foreign loan in the form of clearing as prescribed in point d, Clause 1, Article 34 of this Circular.

d) The date on which the borrower receives the leased asset for loans in the form of foreign financial lease in accordance with relevant laws;

dd) 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 in accordance with the law on foreign exchange management for foreign direct investment activities in Vietnam.

What are regulations on foreign loan agreement as the basis for loan registration in Vietnam?

Pursuant to Article 13 of the Circular 12/2022/TT-NHNN (takes effect from 15/11/2022) stipulating foreign loan agreement as the basis for loan registration in Vietnam as follows:

1. Foreign loan agreement as the basis for loan registration (hereinafter referred to as foreign loan agreement) refers to agreements effecting withdrawal of loan proceeds which are entered into between borrowers and non-resident creditors; debt instruments issued by residents to non-residents outside the Vietnamese territory; loan entrustment agreement or loan entrustment agreement together with the on-lending agreement in case the trustee is the party responsible for direct debt repayment to the trustor who is a non-resident.

2. Borrowers shall not be subject to procedures for loan registration when signing agreements which effect no withdrawal of loan proceeds with non-residents such as framework credit pacts, memoranda and other similar arrangements. Contents of agreements must ensure consistency with Vietnam laws and regulations.

3. Where conventional mid-term or long-term loans of borrowers arise due to the presence of written documents that effect the validity for withdrawal of loan proceeds of the agreements prescribed in clause 2 of this Article, borrowers shall apply for registration of their loans in accordance with this Circular. In such circumstance, the foreign loan agreement shall include the original agreement and the document which effects the validity for withdrawal of loan proceeds of such agreement.

Which entities are subject to application for registration or registration for changes of foreign conventional loans in Vietnam?

Pursuant to Article 14 of the Circular 12/2022/TT-NHNN (takes effect from 15/11/2022) stipulating entities subject to application for registration or registration for changes of loans in Vietnam as follows:

Borrowers subject to application for registration or registration for changes of loans include:

1. Borrowers who are parties to foreign borrowing agreements with non-resident creditors.

2. Entities liable for making repayment to the trustor in case the credit institutions, foreign bank branches sign an agreement for on-lending with non-resident trustors.

3. Parties who are obliged to repay debts according to debt instruments issued outside the Vietnamese territory to non-residents.

4. Lessees who are parties to finance lease contracts with non-resident lessors.

5. The successor of foreign loan repayment obligation shall make registration or registration for change in accordance with this Circular in case the borrower is fully or partly divided, consolidated or acquired while arranging the foreign loan.

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