Decree 135: Vietnam’s regulations on capital for outward portfolio investments

According to Vietnam’s current regulations, the activities of outward portfolio investments of economic organizations shall be carried out by the following methods:

1. Proprietary trading of outward portfolio investments.

2. Outward portfolio investment trust.

According to Decree No. 135/2015/ND-CP of Vietnam’s Government, proprietary traders (excluding commercial banks and general financial companies) are allowed to spend self-gained foreign currency in accounts and foreign currency purchased from credit institutions and foreign banks’ branches permitted to provide foreign exchange services in Vietnam on outward portfolio investments by the proprietary trading limit registered with and confirmed by Vietnam State Bank.

Moreover, delegating organizations (excluding commercial banks and general financial companies) are only allowed to spend self-gained foreign currency in accounts on outward portfolio investments by delegating trust organizations.

Commercial banks and general financial companies balance their sources of foreign currency on their own to make outward portfolio investments in conformity with the regulations on foreign currency position, limits, safety guaranteeing ratio for the sector of banking.

Note: Investors are not allowed to use loans in Vietnam Dong from credit institutions and foreign banks' branches to purchase foreign currency for outward portfolio investments. Investors are not allowed to use local and overseas loans in foreign currency for outward portfolio investments.

Relevant provisions can be found in Decree No. 135/2015/ND-CP of Vietnam’s Government, which takes effect from February 15, 2016.

Thu Ba

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