Circular 08/2023/TT-NHNN prescribes eligibility requirements for foreign loans without the Government's guarantee in Vietnam
What content are included in the Circular 08/2023/TT-NHNN prescribing eligibility requirements for foreign loans without the Government's guarantee in Vietnam? - Mr. Doan (Ha Noi).
Circular 08/2023/TT-NHNN prescribes eligibility requirements for foreign loans without the Government's guarantee in Vietnam
On June 30th, 2023, the Governor of the State Bank of Vietnam (SBV) promulgates the Circular 08/2023/TT-NHNN on eligibility requirements for foreign loans without the Government's guarantee.
The Circular 08/2023/TT-NHNN applies to:
- Residents that are enterprises, cooperatives, cooperative unions, credit institutions and foreign bank branches (FBBs) duly established and operating in Vietnam and known as the parties applying for foreign loans (hereinafter referred to as “borrowers”).
- Credit institutions or FBBs in Vietnam where borrowers’ accounts are opened to serve their foreign borrowing and repayment of foreign loan debts (hereinafter referred to as “account service banks”).
In addition, application of eligibility requirements for foreign loans without the Government's guarantee in Vietnam must comply with relevant regulations and laws as follows:
- In addition to the fulfillment of eligibility requirements for foreign loans laid down in this Circular, borrowers of foreign loans in the form of issuance of international bonds must also comply with regulations of law on offering of corporate bonds in international market and other relevant law provisions.
- In addition to the fulfillment of eligibility requirements for foreign loans laid down in this Circular, borrowers that are state-owned enterprises must also comply with regulations of law on management and use of state capital invested in manufacturing and business activities of enterprises and other relevant regulations of law.
What are rules for using foreign loan capital in Vietnam?
Pursuant to Article 6 of the Circular Circular 08/2023/TT-NHNN stipulating rules for using foreign loan capital in Vietnam as follows:
Rules for using foreign loan capital
1. Borrowers shall assume overall responsibility to use foreign loan capital for lawful purposes as defined in this Circular.
2. In case a foreign loan amount has been withdrawn but has not yet used for the lawful loan purposes as defined in this Circular, the borrower may deposit this loan amount at credit institutions or FBBs operating in Vietnam. Term of each deposit does not exceed 01 month.
As regulations above, rules for using foreign loan capital are:
- Borrowers shall assume overall responsibility to use foreign loan capital for lawful purposes;
- The borrower may deposit this loan amount at credit institutions or FBBs operating in Vietnam. Term of each deposit does not exceed 01 month.
Do borrowers of foreign loans which are granted in the form of import of goods with deferred payment have to satisfy eligibility requirements for foreign loans without the Government's guarantee in Vietnam?
Pursuant to Article 5 of the Circular Circular 08/2023/TT-NHNN stipulating foreign loans granted by deferral of payment for imported goods as follows:
Foreign loans granted by deferral of payment for imported goods
1. Borrowers of foreign loans which are granted in the form of import of goods with deferred payment are not required to meet the eligibility requirements for foreign loans laid down in this Circular.
2. Borrowers of foreign loans which are granted in the form of import of goods with deferred payment shall comply with regulations and guidelines on management of foreign exchange in foreign borrowing and foreign debt repayment by enterprises, regulations of law on foreign trade management and other relevant law provisions.
As regulations above, borrowers of foreign loans which are granted in the form of import of goods with deferred payment are not required to meet the eligibility requirements for foreign loans.
Borrowers of foreign loans which are granted in the form of import of goods with deferred payment shall comply with following regulations:
- Regulations and guidelines on management of foreign exchange in foreign borrowing and foreign debt repayment by enterprises;
- Regulations of law on foreign trade management;
- Other relevant law provisions.
Note: Circular 08/2023/TT-NHNN will take effect from 15/08/2023.
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