Vietnam: 09 conditions for consideration, appraisal and approval of foreign loans

11:39, 28/10/2014

On October 20, 2014, the Ministry of Finance of Vietnam issued Circular No. 153/2014/TT-BTC on the Regulations for the consideration, appraisal and approval of foreign loans through self-borrowing and self-repayment methods by state-owned enterprises with over 50% of charter capital owned by the State.

09 Điều kiện xem xét, thẩm tra, chấp thuận khoản vay nước ngoài, Thông tư 153/2014/BTC

According to the Regulations issued together with Circular No. 153/2014/TT-BTC of the Ministry of Finance of Vietnam, 09 conditions for consideration, appraisal and approval of foreign loans are specified as follows:

1. The loan is confirmed by the State Bank of Vietnam to be within the annual approved limit for self-borrowing and self-repayment of foreign loans by the Prime Minister and meets the conditions for foreign borrowing as prescribed by the State Bank of Vietnam for each period.

2. The investment project is included in the approved investment plan by the competent authority.

3. The owner has approved the borrowing plan for foreign loans through self-borrowing and self-repayment.

4. The lender has approved the loan in writing.

5. The debt-to-equity ratio in the previous year's financial report and the most recent quarterly financial report of the enterprise does not exceed 3 times. In case of exceeding this limit for mobilizing foreign loans for important projects, it must be reported to the owner for consideration and decision-making based on the projects' ability to repay the debt and their effectiveness.

6. The enterprise ensures the ability to arrange sufficient counterpart funds to implement the investment project.

7. There is an approved plan for the use of funds.

8. There is a financial plan to ensure the ability to repay the foreign loan, which has been assessed and approved by the owner.

9. The enterprise has a strong financial status, without losses for the past three consecutive years, except for losses incurred due to policy implementation. At the time of assessment and approval by the Ministry of Finance, the enterprise does not have overdue debts with financial institutions and credit organizations, nor overdue debts related to guaranteed amounts or loans from the government and state budget.

View more details at Circular No. 153/2014/TT-BTC of the Ministry of Finance of Vietnam, effective from December 04, 2014.

Ty Na

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