Circular No. 20/2015/TT-NHNN stipulates that organizations that are allowed to open and use overseas foreign-currency accounts include: credit institutions, economic organizations and other organizations (including Vietnamese state agencies, armed forces units, political organizations, socio-political organizations, socio-political-professional organizations, social organizations, socio-professional organizations, social hinds, and charity funds operating in Vietnam).
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Organizations must obtain a license from the State Bank of Vietnam in order to open and use overseas foreign-currency accounts. This is the first and mandatory requirement for organizations to engage in foreign currency-related activities.
Credit institutions, foreign bank branches are permitted to engage in foreign exchange operations
Circular No. 20/2015/TT-NHNN of the State Bank of Vietnam specifies conditions and cases of opening and use of overseas foreign-currency accounts by licensed credit institutions as follows:
- Licensed credit institutions conducting overseas foreign exchange operations under licenses granted by the State Bank of Vietnam may open and use overseas foreign-currency accounts for conducting foreign exchange operations as approved by the State Bank and prescribed by laws of host countries where they open the accounts; they are not required to apply for licenses for opening and use of overseas foreign-currency accounts under this Circular.
- For borrowing foreign loans in accordance with current law, licensed credit institutions may open and use overseas foreign-currency accounts under contracts or agreements signed with lenders that request the opening of overseas foreign-currency accounts, and under laws of host countries where they open the accounts; they are not required to apply for licenses for opening and use of overseas foreign-currency accounts under this Circular.
- After obtaining the State Bank’s licenses for opening and use of overseas foreign- currency accounts (below referred to as licenses), licensed credit institutions may open and use such accounts under the licenses and license modification decisions (if any), this Circular and laws of host countries where they open the accounts in order to:
+ Meet the conditions for grant of licenses for establishment and operation of their overseas representative offices, branches and wholly owned banks in accordance with laws of host countries;
+ Serve the operation of their overseas representative offices.
Economic organizations (excluding credit institutions)
Economic organizations that are not credit institutions are not allowed to open and use overseas foreign-currency accounts in the following cases:
- Economic organizations may open and use overseas foreign-currency accounts in order to meet the conditions for grant of licenses for establishment and operation of their branches and representative offices in accordance with laws of host countries.
- Economic organizations may open and use overseas foreign-currency accounts in order to serve the operation of their overseas branches and representative offices.
- Enterprises, cooperatives and unions of cooperatives (below referred to as borrowers of foreign loans) may open and use overseas foreign-currency accounts in order to borrow, foreign loans as agreed with foreign lenders.
- Enterprises eligible for particularly important investment under the Government’s programs, and enterprises making investment in the form of public-private partnership (PPP) may open and use overseas accounts in order to fulfill their commitments with foreign partners.
- Economic organizations may open and use overseas foreign-currency accounts in order to fulfill their commitments, agreements and contracts with foreign partners, including contracts on overseas construction; contracts on ship purchase and sale with foreign partners; and other commitments, agreements or contracts, excluding the opening and use of overseas foreign- currency accounts in order to borrow foreign loans at the request of foreign lenders.
Other organizations
After obtaining the State Bank’s licenses, other organizations such as state agencies, armed forces units, political organizations, etc. may open and use overseas foreign-currency accounts under the licenses and license modification decisions (if any), this Circular and laws of host countries where they open the accounts in order to receive foreign aid and financial donations or in other cases permitted by Vietnam’s competent agencies.
- Key word:
- Circular No. 20/2015/TT-NHNN
