Vietnam: Regulation on borrowing and repayment of foreign loans by residents

Specifically, according to Clause 11 Article 1 of the Amending Ordinance on Foreign Exchange Control 2013 amending and supplementing Article 17 of the Ordinance on Foreign Exchange Control 2005 of Vietnam:

- Residents being enterprises, cooperatives, cooperatives unions, credit institutions and foreign banks’ branches shall be permitted to borrow and repay foreign loans on the principle of self-borrowing and self-repayment in accordance with law.

- Residents being individuals shall be permitted to borrow and repay foreign loans on the principle of self-borrowing and self-repayment in accordance with regulations of the Government.

- When borrowing and repaying foreign loans, residents must comply with the conditions on borrowing and repayment of foreign loans, shall register the loans, shall open and use accounts, shall withdraw capital and transfer money for loan repayment and shall report the use status of loans in accordance with regulations of the State Bank of Vietnam.  The State Bank of Vietnam shall certify the registration of loans within the total commercial loan limit annually approved by the Prime Minister of the Government.

- Residents shall be entitled to purchase foreign currency at authorized credit institutions on the basis of presentation of proper documents for repayment of principal, interest and fees relating to the foreign loans.

- Other lawful transactions of capital transfer relating to activities of borrowing and repaying foreign loans shall comply with regulations of the State bank of Vietnam and relevant laws.

Residents means organizations and individuals in the following subjects:

- Credit institutions, foreign banks’ branches established and carrying on business activities in Vietnam as prescribed in Law on credit institutions;

- Economic institutions not being credit institutions, established and carrying on business activities in Vietnam;

- State agencies, units of the armed forces, political organizations, socio-political organizations, socio-political-professional organizations, social organizations, socio- professional organizations, social funds and charitable funds of Vietnam operating in Vietnam;

- Representative offices in foreign countries of the entities stipulated in points a, b and c this clause;

- Diplomatic representative agencies, consulate representative agencies and representative agencies at international organizations of Vietnam in foreign countries;

- Vietnamese citizens residing in Vietnam; Vietnamese citizens residing overseas for a duration of less than twelve (12) months; and Vietnamese citizens working for any of the organizations stipulated in points d and dd Clause 2 Article 4 of the Ordinance on Foreign Exchange Control 2005 of Vietnam and the individuals accompanying such citizens;

- Vietnamese citizens traveling overseas for purposes of tourism, study, medical treatment or visits;

- Foreigners allowed to reside in Vietnam for a duration of twelve (12) months or more. For foreigners coming to Vietnam for study, medical treatment, tourism, or to work for diplomatic representative agencies, consulates or representative agencies of international organizations in Vietnam, representative offices of foreign organizations in Vietnam irrespective of  term shall be cases not belong to subjects as residents;

- Branches in Vietnam of foreign economic institutions, forms of presentation in Vietnam of the foreign parties joining in investment operations as prescribed by law on investment, executive office of foreign contractors in Vietnam.

View relevant contents at the Amending Ordinance on Foreign Exchange Control 2013 of Vietnam takes effect from January 01, 2014.

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