Currencies Used in Factoring at Credit Institutions

05:40, 11/07/2024

Circular 02/2017/TT-NHNN was issued by the State Bank of Vietnam on May 17, 2017, specifying the currency used in factoring at credit institutions.

Circular on the currency for factoring is Vietnamese Dong, except in cases where the factoring unit is considered and decided to factor in foreign currency. The factoring unit is only allowed to factor in Vietnamese Dong for customers who are non-residents when they use the factoring funds within the territory of Vietnam.

Additionally, Circular 02 also stipulates that the factoring unit may be considered and decide to factor in foreign currency for receivables and payables in foreign currency in accordance with legal regulations on foreign exchange management and meet the following conditions:

- The customer is a non-resident; or

- The customer is a resident who meets the following requirements:

- The customer is the seller using the factoring funds to settle, pay for foreign currency transactions as prescribed by law; or- The customer is the buyer who has sufficient foreign currency from production and business revenues to repay the factoring debt; or- The customer is a key enterprise importing petrol and oil assigned an annual import quota by the Ministry of Industry and Trade to pay for overseas petrol and oil imports.

Furthermore, Circular 02 also specifies that the currency for debt repayment and factoring interest payment is the factoring currency.

See details Circular 02/2017/TT-NHNN effective from September 30, 2017.

-Thao Uyen-

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