Can the credit guarantee currency in Vietnam be a foreign currency?
Can the credit guarantee currency in Vietnam be a foreign currency? What expenses should be paid for the credit guarantee application in Vietnam?
My company is a medium-sized enterprise in Dong Nai province, would like to submit a credit guarantee dossier for the payment of goods abroad, when guaranteed, can the Credit Guarantee Fund use the USD to make guarantees? What fees does my business pay in relation to credit guarantees?
Can the credit guarantee currency in Vietnam be a foreign currency?
Pursuant to Article 19 of Decree 34/2018/ND-CP on credit guarantee currency as follows:
1. Credit guarantee currency is VND.
2. Limit of loan guarantee for investment: Total amount of credit guarantee granted to a single obligor or a single obligor and a related entity does not exceed 15% or 20% respectively of actual charter capital of the credit guarantee fund.
3. Limit of loan guarantee for working capital: Apart from the regulation on loan guarantee limit prescribed in Clause 2 hereof, the loan guarantee for working capital does not exceed the amount of equity of the obligor representing in its financial statement submitted to the tax authority the year before.
4. Total amount of credit guarantees extended to obligors prescribed in Clause 2 and Clause 3 hereof is not more than 3 times higher than the actual charter capital of the credit guarantee fund.
Thus, when receiving a credit guarantee, the currency used in the guarantee is Vietnam dong.
What expenses should be paid for the credit guarantee application in Vietnam?
According to the provisions of Article 20 of Decree 34/2018/ND-CP, the cost of credit guarantee activities is as follows:
1. Fees for credit guarantee activities include:
a) Fees for appraisal of credit guarantee dossiers paid by the obligor to the credit guarantee fund together with the application for credit guarantee;
b) Fee for the credit guarantee shall be calculated on the basis of the guaranteed sum and guarantee term. The expiry date of fee payment specified in the guarantee contract under the agreement between the credit guarantee fund and obligor shall conform to the credit guarantee term.
2. The credit guarantee fund shall submit specific amounts of fees prescribed in Clause 1 hereof in every period to the People's Committee of province for decision.
3. The remission of credit guarantee fees are specified in Regulations on cases and sectors eligible for remission of credit guarantee fees issued by the President of People’s Committee of province at the request of the President of credit guarantee fund. Criteria for determining degrees of remission of credit guarantee fees include:
a) Sectors eligible for remission among preferential sectors in the provinces;
b) In conformity with financial resources of the credit guarantee fund;
c) The President of credit guarantee fund has the authority to approve specific cases of remission based on the request of the Director of credit guarantee fund.
Thus, small and medium enterprises in Vietnam submitting credit guarantee documents need to cover the costs related to the guarantee activities as above. In addition, enterprises may be entitled to exemption or reduction of credit guarantee expenses if they fall into the cases promulgated by the Chairman of the provincial People's Committee in accordance with regulations.
Best Regards!
