Vietnam: 06 principles of management of enterprises’ borrowing of foreign loans without government guarantee

Specifically, according to Decree No. 219/2013/ND-CP of Vietnam’s Government, principles of management of borrowing of foreign loans and payment of foreign debts without government guarantee are as follows:

- The Government shall manage the borrowing of foreign loans by the mode of self-borrowing and self-payment within the framework of management of national foreign debts, ensuring the safety of debts within the limit approved by a competent authority, and ensuring the national financial security and macroeconomic balances.

- When borrowing foreign loans and paying foreign debts, borrowers must satisfy the conditions on borrowing of foreign loans and payment of foreign debts; register loans, open and use accounts, withdraw capital and transfer money for debt payment, and report on the implementation of the loans under regulations of the State Bank of Vietnam. The State Bank of Vietnam shall certify registration of loans within the foreign commercial loan limit approved annually by the Prime Minister.

- Foreign loans borrowed by enterprises by the mode of self-borrowing and self-payment through issuance of international bonds or issuance of other debt instruments for non-residents must comply with this Decree, regulations on issuance of international bonds and foreign exchange management, and other relevant regulations.

- Foreign loans by the mode of self-borrowing and self-payment through import of goods on deferred payment must comply with foreign exchange management policies, trade policies and other relevant regulations.

- Borrowers shall take responsibility before law for the signing and performance of contracts on the borrowing of foreign loans by the mode of self-borrowing and self-payment. The Government is not responsible for the borrowing of foreign loans and payment of foreign debts by borrowers by the mode of self-borrowing and self-payment.

- The policies on management of the borrowing of foreign loans and payment of foreign debts by the mode of self-borrowing and self-payment must be consistent with the policies on domestic credit management in order to ensure the objectives of monetary policy and foreign exchange management policy in each period.

- When necessary, in order to ensure national financial and monetary security and debt safety criteria, the Prime Minister shall decide on the application of appropriate measures to manage the borrowing of foreign loans and payment of foreign debts by the mode of self-borrowing and self-payment.

View more details at Decree No. 219/2013/ND-CP of Vietnam’s Government, effective from February 15, 2014.

Thu Ba

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