Circular 12/2022/TT-NHNN on foreign exchange management for foreign loans and debt repayment of enterprises sets out a number of important regulations, especially regarding the registration of foreign loans. Below are detailed instructions:
1. Foreign loans must be registered.
Article 11 of Circular 12/2022/TT-NHNN stipulates that foreign loans that must be registered are the following loans:
Loans that must be registered with the State Bank include:
1. Medium and long-term foreign loans.
2. Short-term loans may have their principal repayment period extended for which the total term of the loan is over 01 year.
3. Short-term loans without an extension agreement but with outstanding principal balance (including principally entered interest) at the full date of 01 year from the date of first capital withdrawal, unless the borrower completes payment pay the above principal balance within 30 working days from the date of full 01 year from the date of first capital withdrawal.
2. Which loans do not require registration?
There are 4 loans that do not have to be registered with the State Bank:
1. Short-term loans (foreign loan contracts (Contract Appendix) with a loan term of less than 1 year).
2. Short-term foreign loans without extension agreements, outstanding principal (including principal interest) at the time of 1 year from the date of first capital withdrawal, and the borrower completes payment of outstanding debt above mentioned principal within 30 working days from the date of first capital withdrawal.
3. Borrowers are not required to carry out loan registration procedures when signing with non-residents agreements that do not have the effect of withdrawing capital such as a framework credit agreement, memorandum of understanding, or other similar agreements. .
4. Self-borrowed and self-paid loans in the form of imported goods with deferred payment are not subject to registration or registration for changes in foreign loans according to the provisions of Circular 12.
3. Subjects performing registration and registration of loan changes at the State Bank
Borrowers make registration and registration for loan changes, including:
- The borrower enters into a foreign loan agreement with a non-resident lender.
- The organization is responsible for directly repaying the debt to the trustor in case the credit institution or foreign bank branch signs a contract to receive a re-lending trust with the trustor who is a non-resident.
- The party obliged to pay debt under debt instruments issued outside the territory of Vietnam to non-residents.
- The lessee in a finance lease contract with the lessor is a non-resident.
- The organization inheriting the obligation to repay foreign loans subject to registration and registration of changes according to the provisions of this Circular in case the borrower is implementing a foreign loan shall carry out division, separation, consolidation or merger.
4. How to calculate loan term to determine registration obligation
1. For the medium and long-term foreign loans, the loan term is determined from the expected date of first capital withdrawal to the expected date of final principal repayment on the basis of the provisions in the foreign loan agreement.
2. For the Short-term loans have the principal repayment period extended if the total loan term is over 01 year, the loan term is determined from the date of first capital withdrawal to the expected date of final principal repayment on the basis of the provisions in the foreign loan agreement and foreign loan extension agreement.
3. For loans specified in Clause 3, Article 11 of this Circular, the loan term is determined from the date of first capital withdrawal to the expected date of final repayment of the principal.
4. The capital withdrawal date specified in this Article is:
a) The date money is credited to the borrower's account for loans disbursed in cash;
b) The date the lender makes payment to the non-resident for the provision of goods or services under the goods and service purchase and sale contract with the resident being the borrower;
c) The date the borrower is recorded as fulfilling the payment obligation to the lender in case the parties choose to withdraw capital from the medium and long-term foreign loan in the form of clearing as prescribed in point d. Clause 1, Article 34 of this Circular.
d) The date the borrower receives the leased property for loans in the form of foreign financial lease in accordance with relevant laws;
e) The date the borrower is granted a Certificate of Business Registration, a License for Establishment and Operation under specialized laws, the date of signing an investment contract under the public-private partnership method (PPP contract), the date the parties sign a foreign loan agreement to convert the amount of investment preparation into loan capital (whichever comes later), applicable to foreign loans arising from converting the amount of investment preparation of projects that have been granted an Investment Registration Certificate into foreign loan capital according to the provisions of law on foreign exchange management for foreign direct investment activities in Vietnam.
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