Circular 26/2024/TT-NHNN on regulating financial leasing activities of general finance companies and financial leasing companies has been issued

Is there Circular 26/2024/TT-NHNN regulating financial leasing activities of general finance companies and financial leasing companies?

On June 28, 2024, the Governor of the State Bank of Vietnam issued Circular 26/2024/TT-NHNN regulating financial leasing activities of general finance companies and financial leasing companies.

Circular 26/2024/TT-NHNN applies to the following subjects:

- General finance companies, financial leasing companies as regulated in the Law on Credit Institutions 2024.

- Organizations and individuals related to financial leasing activities of general finance companies, financial leasing companies as stipulated in Clause 1, Article 2 of Circular 26/2024/TT-NHNN.

Circular 26/2024/TT-NHNN is effective from July 1, 2024.

Is there Circular 26/2024/TT-NHNN regulating financial leasing activities of general finance companies and financial leasing companies? (Image from the Internet)

What are the documents required for a financial leasing proposal?

According to Article 6 of Circular 26/2024/TT-NHNN, the documents for a financial leasing proposal include:

Financial leasing proposal documents

The lessee shall send the financial leasing proposal and the following documents to the lessor:

1. Documents proving eligibility for financial leasing as regulated in Article 5 of this Circular.

2. Information about individuals or entities related to the lessee, including:

a) Information about individuals or entities connected to the lessee in cases of restricted credit extension as regulated by the Law on Credit Institutions;

b) Information about individuals or entities connected to the lessee as regulated by the Law on Credit Institutions in the case where, at the time of the leasing proposal, the lessee's credit balance at the lessor (including the principal amount being proposed for leasing) is equal to or exceeds 0.5% of the lessor's equity as of the most recent working day's end. In the case where the lessor has negative equity, the above ratio is applied to the charter capital.

3. Information about individuals or entities connected to the lessee as stipulated in Clause 2 of this Article, including:

a) Information about related individuals, including: full name, personal identification number for Vietnamese citizens; nationality, passport number, date of issue, place of issue for foreigners; relationship with the lessee;

b) Information about related entities for organizations, including: name, enterprise code, head office address of the enterprise, enterprise registration certificate number or equivalent legal document for non-enterprise organizations; legal representative, relationship with the lessee.

4. The lessor guides the lessee to provide the information and documents stipulated in this Article.

Thus, the documents for a financial leasing proposal that the lessee sends to the lessor include:

- Financial leasing proposal form

- Documents proving eligibility for financial leasing:

+ Information about individuals or entities related to the lessee in cases of restricted credit extension

+ Information about individuals or entities related to the lessee in cases where, at the time of the leasing proposal, the lessee's credit balance at the lessor (including the principal amount being proposed for leasing) is equal to or exceeds 0.5% of the lessor's equity as of the most recent working day's end. In the case where the lessor has negative equity, the above ratio is applied to the charter capital.

- Information about individuals or entities related to the lessee

- Information about individuals or entities related to the lessee

What is the currency used in financial leasing?

According to Article 9 of Circular 26/2024/TT-NHNN, the currency used in financial leasing is stipulated as follows:

Currency used in financial leasing

1. The lessor conducts financial leasing in Vietnamese Dong except in cases where financial leasing in foreign currency is permitted as stipulated in Clause 2 of this Article.

2. Financial leasing in foreign currency must meet the following requirements:

a) The lessor pays for the import of leased assets to the supplier in foreign currency; the lessee assumes debt and pays financial lease payments in foreign currency;

b) The lessee uses the leased assets for production and business purposes;

c) The lessee has sufficient foreign currency from production and business revenues to repay the financial lease payments.

Thus, the currency used in financial leasing is Vietnamese Dong, except in cases where financial leasing in foreign currency is permitted.