03 steps for enterprises to carry out procedures for foreign loans registration in Vietnam

According to Article 13 of the Circular No. 03/2016/TT-NHNN of the State Bank of Vietnam providing several instructions on foreign exchange administration in respect of foreign borrowing and foreign debt repayment of enterprises, 03 steps for foreign loans registration are as follows:

Step 1: Preparing the registration form for foreign loans 

According to Article 14 of the Circular No. 03/2016/TT-NHNN amended by Clauses 2 and 3 Article 1 of the Circular No. 05/2017/TT-NHNN of the State Bank of Vietnam, application for registration of foreign loans includes:

1. Registration form for foreign loans.

2. Copy (countersigned by the borrower) of legitimate dossiers of both a borrower and a loan user in the event that the borrower is not a loan user.

3. Copy (countersigned by the borrower) or original of written proof of borrowing purposes.

4. Copy and Vietnamese translation (countersigned by the borrower) of foreign loan agreements and agreements on renewal of short-term loans into mid-term or long-term loans (if applicable); or written document on fund withdrawal attached to framework agreements.

5. Copy and Vietnamese translation (countersigned by the borrower) of written guarantee commitment (letter of guarantee, contract of guarantee or other commitments) in terms of secured loans.

6. Copy (countersigned by the borrower) of documents of competent authority on approval of foreign loans in accordance with laws on task and authority assignment in relation to implementation of authority, responsibilities and obligations of owners of state-owned enterprises and state-owned capital invested in enterprises, if the borrower is a state-owned enterprise.

7. Report on compliance with regulations of the State Bank on credit limits and safety ratios of credit institutions, foreign bank branches on the latest month-end date prior to the date of affecting foreign loan agreements and written proof of incompliance with laws on credit limits and safety ratios approved by the Prime Minister or the Governor of the State Bank in accordance with laws (if applicable) in the event that borrowers are credit institutions or foreign bank branches.

8. An account service provider’s confirmation in some specific cases.

9. Documents or invoices indicating legally distributed Vietnam-dong profits gained from direct investments of the creditor who is the foreign investor making the capital contribution to the borrower, and a statement of account service providers on distribution and transmission of profits to the home country of the creditor are required to serve as evidence of disbursement of foreign loans in respect of foreign borrowing in Vietnam dong in accordance with prevailing regulations on conditions for foreign borrowing in Vietnam dong.

10. Explanatory statement on demands for foreign borrowing in Vietnam dong in respect of foreign borrowing in Vietnam dong under the Governor’s permission in accordance with the State Bank’s prevailing regulations on conditions for foreign borrowing in Vietnam dong.

Step 2: Sending or submitting dossiers to apply for such registration

There are 03 ways to send dossiers as follows:

Way 1: Sending dossiers to apply for loan registration by post.

Way 2: Sending dossiers to apply for loan registration directly to authorities accorded authority over loan registration confirmation:

- The State Bank (Foreign Exchange Administration) shall carry out confirmation of registration or registration for changes in respect of a loan for which quota is more than USD (or other equivalents) 10 (ten) million and other foreign loans denominated in Vietnam dong.

- The State Bank branches of centrally-affiliated cities and provinces where borrowers' head offices are located shall carry out confirmation of registration or registration for changes in respect of a loan for which quota is more than USD (or other equivalents) 10 (ten) million.

- Where there is any increase or reduction in loan quota, or any change to currency unit of a loan or the borrower's head office, or the borrower is requested to contact an enterprise whose head office is located within another area, which entails changes to the authority in charge of confirmation of registration for changes of loans, the authority in charge of confirmation of registration or registration for changes of initial loans shall assume the following responsibilities:

+ Act as the contact point to receive applications for registration for changes of loans from the borrower;

+ Within a maximum period of 07 (seven) working days of receipt of the application for registration for changes from the borrower, deliver all of the original application submitted to request registration of changes of loans and copy of application for registration or registration for changes that have already been made to loans (if any) to competent authorities referred to in Clauses 1 and 2 Article 18 of Circular No. 03/2016/TT-NHNN for further processing activities.

Way 3: Borrowers who have chosen the online registration can choose to send their documents online according to instructions available on the websites.

Note: Borrowers must send their dossiers within a maximum duration of 30 (thirty) days starting after:

- the date on which the mid-term or long-term agreement is concluded, or the written guarantee is signed in respect of secured loans, or the date on which written fund withdrawal arrangements are concluded in the event that contracting parties have agreed upon such fund withdrawal under signed framework agreements and before such fund withdrawal takes place;

- the date on which the agreement on renewal of a short-term foreign loan into a mid-term or long-term loan is effected in respect of conventional loans referred to in paragraph 2 Article 9 hereof;

- the anniversary of the date of first fund withdrawal in full 01 (one) year in respect of conventional loans provided for in paragraph 3 Article 9 hereof.

Step 3: The State Bank shall send approval or rejection of confirmation of foreign loan registration within the following permitted periods:

- 12 (twelve) working days of receipt of valid and sufficient dossiers from borrowers in the event that borrowers choose to apply for such registration online;

- 15 (fifteen) working days of receipt of valid and sufficient dossiers from borrowers in the event that borrowers choose the conventional registration; or

- 45 (forty-five) working days of receipt of valid and sufficient dossiers from borrowers in the event that loans denominated in Vietnam dong are subject to consideration and consent of the Governor of the State Bank in accordance with prevailing laws and regulations on enterprises’ eligibility conditions for foreign borrowing of enterprises that are not guaranteed by the Government;

In the event of rejecting confirmation of loan registration, the State Bank must give written explanation for such rejection.

Moreover, in respect of loans denominated in Vietnam dong, they shall be subject to consent from the Governor of the State Bank in accordance with prevailing laws and regulations on conditions for foreign borrowing, and procedures for loan registration cum procedures for requesting the Governor of the State Bank to consider approving loans; written confirmation of registration of loans cum written approval of loans issued by the Governor of the State Bank.

Le Vy

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