Vietnam: Guidance on money transfer for effecting of foreign loans

According to the Circular No. 03/2016/TT-NHNN of the State Bank of Vietnam, money transfer for effecting of foreign loans is guided as follows:

- With respect to foreign loans subject to registration with the State Bank, the borrower shall be allowed to withdraw funds and repay debts (principal, interest) of foreign loans only after registration for such loans is certified by the State Bank, except for the case of fund withdrawal or payment of a part of principal or interest in the first year of a mid-term or long-term loan.

- The borrower shall only be allowed to receive disbursed loans and transfer money to pay debts (principal, interest) through the account of the creditor, representative for the creditor or payment bank agents of creditors in the event of a syndicated loan or loan in a loan agreement under which a bank acts as a payment agent.

- Where fund disbursement and transfer of money for payment of debts (principal, interest) of foreign loans denominated in foreign currency are carried out through the account of the non-resident third party not covered by paragraph 2 of this Article, this content must be clearly defined in loan agreements (or change agreements). If foreign loans are subject to registration with the State Bank, this content must be confirmed in the statement on confirmation of registration or registration for changes of foreign loans.

View more details at the Circular No. 03/2016/TT-NHNN of the State Bank of Vietnam, effective from April 15, 2016.

-Thao Uyen-

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