Can foreign investors open foreign direct investment accounts in Vietnam?

1. Can foreign investors open foreign direct investment accounts in Vietnam?

In Clause 1, Article 5 of Circular 06/2019/TT-NHNN stipulating opening and using direct investment accounts, as follows:

1. The following entities shall open and use direct investment accounts include:

a) Enterprises with foreign direct investment capital as prescribed in clause 2 Article 3 of this Circular.

b) Foreign investors participate in BCC or directly implement PPP projects without establishing project enterprises (hereinafter referred to as foreign investors directly implementing PPP projects);

According to this Article, only foreign investors participate in BCC or directly implement PPP projects without establishing project enterprises can open a foreign direct investment account into Vietnam.

2. What do revenues and expenditures transactions on direct investment accounts in Vietnamese dong comprise? 

Pursuant to Article 7 of Circular 06/2019/TT-NHNN stipulating revenues and expenditures transactions on direct investment accounts in Vietnamese dong, specifically as follows:

1. Revenues:

a) Capital contribution in Vietnamese dong of Vietnamese, foreign investors of a FDI enterprise, foreign investors involving in BCC or directly implementing PPP projects;

b) Payment for the ownership transfer of investment capital and investment projects in accordance with provisions in Article 10 of this Circular;

c) Distributable profits in Vietnamese dong of Vietnamese, foreign investors of a FDI enterprise, foreign investors involving in BCC or directly implementing PPP projects, project managers of petroleum projects in order to increase capital and expand investment activities in Vietnam;

d) Revenues from Vietnamese dong demand accounts opened at authorized banks of FDI enterprises, foreign investors involving in BCC or directly implementing PPP projects in order to transfer of invested capital, profits and legal receipts to foreign countries;

dd) Capital surplus from issuance of additional shares in order to raise the charter capital of FDI enterprises;

e) Other revenues relating to foreign loans in Vietnamese dong of FDI enterprises which are eligible to be granted overseas loans in Vietnamese dong according to current laws on overseas loan receipt and repayment of enterprises;

f) Other lawful revenues in Vietnamese dong relating to foreign direct investment in Vietnam.

2. Expenditures:

a) Amounts transferred to Vietnamese dong demand accounts opened at authorized banks of the same FDI enterprise, the foreign investors involving in BCC or directly implementing PPP projects, project managers of petroleum projects according to laws on petroleum for foreign direct investment in Vietnam ;

b)  Payments for transfer of stakes and investment projects to transferors in Vietnam or payments for the purchase of foreign currencies for such transactions to overseas transferors in accordance with provisions prescribed in Article 10 of this Circular;

c) Payments for purchasing foreign currency at authorized credit institutions to transfer their capitals, profits and legal earnings overseas;

d) Transfer of direct investment in Vietnamese dong to Vietnamese investors or payments for purchasing foreign currencies to be transferred as direct investment to  foreign investors in case of capital reduction, finish, termination of investment projects, BCC, PPP contracts in accordance with law on investment;

dd) Payments relating to foreign loans in Vietnamese dong of FDI enterprises which are eligible to be granted overseas loans in Vietnamese dong according to current laws on taking and repaying overseas loans;

e) Other lawful expenditures in Vietnamese dong relating to foreign direct investment in Vietnam.

Thus, based on the above provisions of law, the above transactions will be collected on the direct investment account in Vietnam dong.

Best Regards!