Is the foreign credit institution guaranteed in Vietnam?
We are a foreign credit institution operating in Vietnam. Currently, we have a number of non-resident institutional clients who would like to receive guarantee from us. We do not know if the guarantee for the above customers is approved, what conditions are needed? What does the application for guarantee comprise?
Is the foreign credit institution guaranteed in Vietnam?
Pursuant to Clause 1, Article 11 of Circular 07/2015/TT-NHNN stipulates the guarantee for non-resident customers as follows:
1. Credit institutions, or foreign bank branches, shall be permitted to give guarantees to non-residential organizations provided that the following requirements are met:
a) Customers are enterprises established and operated overseas with contributed capital obtained from Vietnamese enterprises in the form of investments in accordance with Point a, c Clause 1 Article 52 of the Law on Investment 2014, or in the form of other foreign investments in accordance with the host country’s laws;
b) Customers must give an amount as a security deposit in proportion to 100% of the guarantee value;
c) The obligee must be residential individuals.
Thus, your case is a foreign credit institution, so it is possible to guarantee non-resident institutional customers. However, when implementing the guarantee, it is necessary to ensure one of the above requirements to implement the guarantee in Vietnam.
The application for guarantee in Vietnam
The main contents of the guarantee application dossier are specified in Article 13 of Circular 07/2015/TT-NHNN as follows:
1. Application for issuance of guarantees shall be composed of the main documents as follows:
a) Written request for guarantee;
b) Materials related to customers;
c) Materials on guaranteed obligations;
d) Materials on security (if any);
dd) Materials related to other parties (if any).
2. Based on the current status of guarantee transactions performed by credit institutions, foreign bank branches, and the specific characteristics of each customer group, credit institutions, or foreign bank branches, shall provide specific guidance and public disclosure pertaining to required documentation submitted to credit institutions or foreign bank branches for their consideration to extend credits.
Best Regards!
