Circular 19/2014/TT-NHNN guiding foreign exchange management for direct investment activities in Vietnam

CIRCULARS

GUIDELINES ON FOREIGN EXCHANGE MANAGEMENT FOR FOREIGN DIRECT INVESTMENT ACTIVITIES INTO VIETNAM

Pursuant to the Law on the State Bank of Vietnam No. 46/2010/QH12 dated June 16, 6;

Pursuant to the Law on Credit Institutions No. 47/2010/QH12 dated June 16, 6;

Pursuant to the Ordinance on Foreign Exchange No. 28/2005/PL-UBTVQH11 dated December 13, 12; Ordinance No. 2005/06/UBTVQH2013 dated March 13, 18 amending and supplementing a number of articles of the Ordinance on Foreign Exchange No. 3/2013/PL-UBTVQH28 dated December 2005, 11;

Pursuant to the Government's Decree No. 70/2014/ND-CP dated July 17, 7 detailing the implementation of a number of articles of the Ordinance on Foreign Exchange and the Ordinance amending and supplementing a number of articles of the Ordinance on Foreign Exchange. repent;

Pursuant to Decree No. 156/2013/ND-CP dated November 11, 11 of the Government defining the functions, tasks, powers and organizational structure of the State Bank of Vietnam (hereinafter referred to as the State Bank of Vietnam). Government);

At the proposal of the Director of the Foreign Exchange Management Department;

The Governor of the State Bank promulgates a Circular guiding foreign exchange management for foreign direct investment activities in Vietnam.

Chapter I

GENERAL RULES #

Article 1. Scope

This Circular provides guidance on foreign exchange management for foreign direct investment activities in Vietnam, including: Investment capital contribution; open and use direct investment capital accounts in foreign currencies and in Vietnam dong; transferring capital, profits and lawful revenue abroad; transfer investment capital for the investment preparation stage.

Article 2. Subject of application

This Circular applies to the following subjects:

1. Residents being enterprises with foreign direct investment;

2. Non-residents entering into business cooperation contracts in Vietnam;

3. Non-residents are foreign investors in foreign-invested enterprises;

4. Organizations and individuals involved in foreign direct investment activities in Vietnam.

Article 3. Explain words

In this Circular, the following terms are construed as follows:

1. “Foreign investor” includes: Non-resident means an organization or individual that conducts foreign direct investment activities in Vietnam in the form of direct investment in accordance with current regulations of law. investment law.

2. “Foreign direct investment enterprise” means an enterprise in which foreign investors contribute capital to establish, manage an enterprise and conduct investment activities in Vietnam.

3. “Authorized bank” includes commercial banks, branches of foreign banks that are permitted to do business and provide foreign exchange services in accordance with the provisions of law,

4. “Authorized credit institution” includes an authorized bank, a non-banking credit institution that is permitted to conduct business and provide foreign exchange services in accordance with law.

5. “Direct investment capital account” means a payment account in foreign currency or in Vietnam dong opened by a foreign direct investment enterprise or a foreign investor participating in a business cooperation contract. at an authorized bank to conduct transactions related to foreign direct investment activities in Vietnam as prescribed in Articles 6, 7, Article 8 of this Circular.

Article 4. General principles

1. Foreign direct investment enterprises and foreign investors must comply with the provisions of the law on investment, current regulations on foreign exchange management and this Circular.

2. The contribution of investment capital in cash by foreign investors and Vietnamese investors in foreign direct investment enterprises must be made through the form of transfer to the direct investment capital account. .

3. The use of distributed profits by foreign investors in the Vietnamese territory must ensure compliance with current regulations on foreign exchange management and other relevant provisions of Vietnamese law.

4. The transfer of investment capital in foreign-invested enterprises and investment projects of foreign investors must comply with the provisions of the Law on Investment, the Law on Enterprises and the Law on Personal Income Tax. , Law on Corporate Income Tax, guiding documents for these Laws, current regulations on foreign exchange management and relevant laws.

5. The transfer of money to pay the transfer value of investment capital and investment projects must comply with current regulations on foreign exchange management and relevant laws.

6. Foreign investors may use lawful incomes in Vietnam dong or in foreign currencies from foreign direct investment activities in Vietnam to carry out reinvestment activities in Vietnam.

chapter II

SPECIFIED #

Article 5. Investment capital contribution

1. Foreign investors and Vietnamese investors in foreign-invested enterprises may contribute investment capital in foreign currency or in Vietnam Dong according to the investment capital level stated in the Investment Certificate. ,

2. Residents being Vietnamese investors in foreign-invested enterprises may contribute investment capital with their own lawful foreign currency sources.

Article 6. Opening of direct investment capital accounts in foreign currencies and in Vietnamese dong

1. In order to carry out foreign direct investment activities in Vietnam, foreign direct investment enterprises and foreign investors participating in business cooperation contracts may open direct investment capital accounts. in foreign currency, in Vietnam dong at 01 (one) authorized bank to conduct revenue and expenditure transactions specified in Articles 7 and 8 of this Circular.

2. Enterprises with foreign direct investment capital and foreign investors participating in business cooperation contracts may open direct investment capital accounts in the selected foreign currency to make investment capital contributions.

Corresponding to the selected foreign currency to make investment capital contribution, foreign direct investment enterprises and foreign investors participating in business cooperation contracts may only open 01 (one) capital account. make direct investment in such foreign currency to make investment capital contribution.

3. In case of making foreign loans in which the borrowed currency is not the same as the currency used by the foreign direct investment enterprise to open a direct investment capital account, the foreign invested enterprise shall Foreign direct investors are allowed to open more direct investment capital accounts in borrowed currency at the authorized bank where the direct investment capital account has been opened to conduct lawful revenue and expenditure transactions related to the foreign direct investment capital account. foreign loans and revenue and expenditure transactions specified in Article 7 of this Circular.

4. In case there is a need to open a direct investment capital account at another licensed bank, the foreign direct investment enterprise or the foreign investor participating in the business cooperation contract must close the account. open direct investment capital, transfer all balance on this account to new account. Procedures for opening and closing direct investment capital accounts shall comply with the regulations of the authorized banks.

Enterprises with foreign direct investment capital, foreign investors participating in business cooperation contracts may only conduct revenue and expenditure transactions on the newly opened direct investment capital account after closing and finalizing. previously opened direct investment capital account.

Article 7. Use of foreign currency direct investment capital accounts

The foreign currency direct investment capital account is used to conduct the following revenue and expenditure transactions related to direct investment activities:

1. Collection transactions:

a) Collecting foreign currency direct investment capital contributions from foreign investors and Vietnamese investors in foreign direct investment enterprises;

b) Collect capital withdrawals in foreign currencies from short, medium and long-term domestic and foreign loans of enterprises with foreign direct investment capital;

c) Collect payment for the transfer value of investment capital and investment projects;

d) Collecting foreign currency from foreign currency payment accounts opened at authorized banks of foreign direct investment enterprises and foreign investors;

dd) Other lawful revenues in foreign currencies related to foreign direct investment activities in Vietnam.

2. Payment transactions:

a) Paying principal, interest and fees of short, medium and long-term domestic and foreign loans in foreign currencies of enterprises with foreign direct investment capital;

b) Expenses for transferring foreign currencies to foreign currency payment accounts opened at authorized banks of foreign direct investment enterprises and foreign investors;

c) Spending on selling foreign currency to authorized credit institutions to transfer to Vietnam dong payment accounts of foreign direct investment enterprises and foreign investors;

d) Expenses for money transfer to pay the value of receiving transfer of investment capital and investment projects;

dd) Expenses for the transfer of profits and lawful foreign currency revenues from foreign direct investment activities in Vietnam by foreign investors out of Vietnam;

e) Expenses for the transfer of foreign currency direct investment capital of foreign investors out of Vietnam in case of dissolution or termination of operation of a foreign direct investment enterprise, transfer of investment capital and investment projects, reduce investment capital or terminate, liquidate or terminate the operation of investment projects in accordance with the provisions of the law on investment;

g) Other lawful payments in foreign currencies related to foreign direct investment activities in Vietnam.

Article 8. Use of direct investment capital accounts in Vietnam dong

The direct investment capital account in Vietnam dong is used to conduct the following revenue and expenditure transactions related to direct investment activities:

1. Collection transactions:

a) Collecting money for direct investment capital contribution in Vietnam dong from foreign investors, Vietnamese investors in foreign direct investment enterprises;

b) Collecting after-tax profits distributed in Vietnam dong for re-investment in Vietnam by foreign investors, Vietnamese investors in foreign-invested enterprises;

c) Collecting money to withdraw capital from short, medium and long-term domestic loans in Vietnam dong of enterprises with foreign direct investment capital to carry out investment activities in Vietnam;

d) Collect capital withdrawals from foreign loans in Vietnam dong of foreign direct-invested enterprises permitted to borrow foreign loans in Vietnam dong according to current regulations of law on foreign loans and repayment of foreign debts. of enterprises not guaranteed by the Government;

dd) Collect payment for the transfer value of investment capital and investment projects;

e) Receipt of transfer from current account in Vietnam dong of foreign direct investment enterprises and foreign investors opened at authorized banks.

2. Payment transactions:

a) Spending on transferring money to current account in Vietnam dong of foreign direct investment enterprises and foreign investors opened at authorized banks;

b) Remittance of profits in Vietnam dong to foreign investors, Vietnamese investors in foreign direct investment enterprises;

c) Paying principal, interest and fees of short, medium and long-term domestic loans in Vietnam dong to implement investment projects of enterprises with foreign direct investment capital;

d) Payment of principal, interest and fees of foreign loans in Vietnam dong of foreign direct-invested enterprises permitted to borrow foreign loans in Vietnam dong according to current regulations of law on loans. , paying foreign debts of enterprises not guaranteed by the Government;

dd) Expenses for money transfer to pay the value of receiving transfer of investment capital and investment projects;

e) Payment of investment capital in Vietnam dong to foreign investors, Vietnamese investors in foreign direct investment enterprises in case of dissolution or termination of operation of enterprises with foreign direct investment capital. foreign direct investment, transfer of investment capital and investment projects, reduction of investment capital or termination, liquidation and termination of operation of investment projects in accordance with the provisions of the law on investment.

Article 9. Remittance of capital, profits and lawful revenue sources abroad

1. Foreign investors may remit their direct investment capital abroad upon dissolution or termination of operation of a foreign-invested enterprise, reduction of investment capital, or termination, liquidation or termination. operation of investment projects and business cooperation contracts in accordance with the law on investment, principal, interest and expenses of foreign loans, profits and lawful revenue sources related to investment activities directly in Vietnam through the direct investment capital account, except for some cases specified in Clause 2 of this Article and Clauses 2 and 3, Article 10 of this Circular.

2. In case an enterprise with foreign direct investment capital must close its direct investment capital account due to dissolution or termination of operation of the enterprise or due to the transfer of investment capital, which changes the original legal entity. of enterprises with foreign direct investment capital, foreign investors may use their foreign currency payment accounts or Vietnamese dong payment accounts opened at authorized banks to conduct transactions. purchase foreign currency, transfer direct investment capital and lawful income abroad.

3. Foreign investors are allowed to use lawful incomes in Vietnam dong from direct investment activities in Vietnam to buy foreign currencies at authorized credit institutions and remit them abroad within 30 days. working from the date of purchase of foreign currency.

Article 10. Transfer of capital for the investment preparation stage

1. Transfer of investment capital into Vietnam before being granted the Investment Certificate:

a) Before being granted the Investment Certificate, the foreign investor is allowed to transfer investment capital into Vietnam to meet the legal expenses for the investment preparation stage in Vietnam as agreed in writing. related parties and through their foreign currency payment accounts opened at authorized banks;

b) Foreign investors are allowed to use the investment capital transferred into Vietnam specified at point a of this clause to meet the legal expenses for the investment preparation stage in Vietnam on the basis of compliance with the provisions of this Law. provisions of current law on the use of foreign exchange in the territory of Vietnam and other relevant provisions of Vietnamese law.

2. Remittance of investment capital abroad after being granted an Investment Certificate:

a) After being granted an investment certificate by a competent authority, foreign investors, Vietnamese investors in foreign direct investment enterprises and foreign investors entering into a contract business partners must finalize the investment capital transferred into Vietnam before being granted the Investment Certificate;

b) The transfer of capital portion of foreign investors transferred into Vietnam to meet expenses for the investment preparation stage in Vietnam into contributed capital or foreign loan capital shall be done on the basis of agreement. between related parties, ensuring compliance with current regulations of the law on investment, on accounting and relevant provisions of Vietnamese law.

In case the portion of capital transferred by foreign investors into Vietnam used to meet investment preparation expenses is converted into medium- and long-term foreign loans of enterprises with foreign direct investment capital, enterprises with foreign direct investment capital shall carry out procedures for registration of medium and long-term foreign loans in accordance with current regulations of the State Bank;

c) In case the foreign investor does not use up all the investment capital transferred into Vietnam to meet the cost of investment preparation, the foreign investor may remit the remaining investment capital abroad in foreign currency. currency or to buy foreign currency to remit abroad for the amount of investment capital that has been converted into Vietnam dong but not fully spent in Vietnam on the basis of presenting documents and documents proving the transferred investment capital. and expenses incurred for investment projects in Vietnam. The transfer of capital abroad shall be effected within 30 working days from the date of purchase of foreign currency.

3. Remittance of investment capital abroad due to failure to obtain an investment certificate or because it does not continue to implement a direct investment project in Vietnam:

a) In case a foreign investor has transferred investment capital into Vietnam to meet legal expenses for the investment preparation stage in Vietnam but has not been granted an investment certificate by a competent authority or If the foreign investor does not continue to carry out the direct investment project in Vietnam, the foreign investor may remit abroad the investment capital transferred into Vietnam and the non-term interest arising (if any) after deducting it. expenses incurred related to the preparation of direct investment in Vietnam on the basis of the presentation of valid documents proving the investment capital has been transferred into Vietnam and legitimate expenses incurred. related to the preparation of investment projects in Vietnam;

b) Foreign investors are entitled to purchase foreign currency and remit overseas for the amount of investment capital that has been converted into Vietnam dong but not fully spent in Vietnam on the basis of the presentation of documents and documents proving the number of foreign investors. invested capital and expenses incurred for investment projects in Vietnam; the transfer of capital abroad shall be effected within 30 working days from the date of purchase of foreign currency.

4. The transfer of the remaining investment capital abroad specified in Clauses 2 and 3 of this Article shall be effected through the foreign currency payment account opened at an authorized bank of the foreign investor. to transfer investment capital into Vietnam specified at Point a, Clause 1 of this Article.

Article 11. Direct investment in the form of capital contribution or share purchase

Foreign investors investing directly in Vietnam in the form of buying shares or contributing capital to participate in the management of investment activities in Vietnam shall comply with regulations on account opening as follows:

1. In case a Vietnamese enterprise is granted an Investment Certificate by a competent authority in accordance with current regulations of law on investment, this enterprise must open a direct investment capital account and comply with the following regulations: specified in this Circular.

2. Cases other than those specified at Point a of this Clause shall comply with the provisions of Circular No. 05/2014/TT-NHNN dated March 12, 3 of the State Bank guiding the opening and use of use the indirect investment capital account to carry out foreign portfolio investment activities in Vietnam and the amended and supplemented documents (if any).

Chapter III

RIGHTS AND OBLIGATIONS OF LICENSE CREDIT INSTITUTIONS, FOREIGN DIRECT INVESTMENT ENTERPRISE AND FOREIGN INVESTORS #

Article 12. Rights and obligations of authorized credit institutions

1. When opening a direct investment capital account and conducting revenue and expenditure transactions related to foreign direct investment activities in Vietnam for foreign direct investment enterprises and investors Foreigners, authorized credit institutions have the right to request foreign direct investment enterprises and foreign investors to present documents and vouchers related to their direct investment activities in Vietnam.

2. When performing revenue and expenditure transactions related to foreign direct investment activities in Vietnam of foreign direct investment enterprises and foreign investors, authorized credit institutions are responsible for Responsibilities:

a) Guiding foreign direct investment enterprises and foreign investors on procedures related to the opening and closing of direct investment capital accounts;

b) Regulating, checking and keeping documents consistent with revenue and expenditure transactions on the direct investment capital account of foreign investors to ensure that revenue and expenditure transactions are carried out in accordance with regulations. in this Circular and in accordance with relevant provisions of Vietnamese law;

c) Sell foreign currency to foreign investors to transfer abroad on the basis of self-balancing foreign currency sources of authorized credit institutions and in accordance with the provisions of law.

Article 13. Rights and obligations of foreign direct investment enterprises and foreign investors

1. Foreign direct investment enterprises and foreign investors are allowed to conduct direct investment activities in Vietnam on the basis of compliance with the provisions of this Circular and other relevant regulations. of Vietnamese law.

2. When conducting revenue and expenditure transactions related to foreign direct investment activities in Vietnam, foreign direct investment enterprises and foreign investors are responsible for:

a) Declare the content of receipts and expenditure transactions related to foreign direct investment activities in Vietnam at the request and instructions of the authorized credit institution;

b) Present and supplement dossiers, documents and vouchers at the request of authorized credit institutions.

Chapter IV

REPORT MODE #

Article 14. Reporting regime for authorized credit institutions

Credit institutions are allowed to report to the State Bank on the situation of foreign direct investment activities in Vietnam by foreign investors in accordance with the State Bank's current regulations on reporting regimes. statistical.

Article 15. Requests for ad hoc reports

In extraordinary cases or when necessary, foreign direct investment enterprises and credit institutions are allowed to report relevant contents at the request of the State Bank.

Chapter V

INSPECTION, INSPECTION, AND HANDLING OF VIOLATIONS #

Article 16. Inspection, inspection and supervision

1. The State Bank, State Bank branches in provinces and centrally run cities shall inspect, examine and supervise the observance of regulations on foreign exchange management related to investment activities. foreign direct investment in Vietnam by foreign direct investment enterprises, foreign investors, and authorized credit institutions in accordance with this Circular and other relevant laws. .

Relevant organizations and individuals are responsible for providing all necessary records and documents for inspection, examination and supervision to be carried out in a timely and effective manner.

Article 17. Handling of violations

In case of violation of the provisions of this Circular, depending on the seriousness of the violation, foreign direct investment enterprises, foreign investors and authorized credit institutions will be handled according to the provisions of law. law.

Chapter VI

ORGANIZATION OF IMPLEMENTATION #

Article 18. Enforcement

1. This Circular takes effect from August 25, 9.

2. To annul Article 9 of Circular No. 05/2014/TT-NHNN dated March 12, 3 of the State Bank guiding the opening and use of indirect investment capital accounts to carry out indirect investment activities. foreigners in Vietnam.

Article 19. Transitional provisions

1. From the effective date of this Circular, enterprises with foreign direct investment capital and foreign investors participating in business cooperation contracts are responsible for the conversion of deposit accounts. specialized capital in foreign currency to direct investment capital account in foreign currency.

The conversion to foreign currency direct investment capital accounts of foreign direct investment enterprises and foreign investors entering into business cooperation contracts shall be effected within 06 months from the date of notification. this order is in effect.

2. Authorized credit institutions are responsible for the conversion of foreign currency direct investment capital accounts specified in Clause 1 of this Article for foreign direct investment enterprises and foreign investors. enter into a business cooperation contract.

3. After 06 months from the effective date of this Circular, foreign direct investment enterprises and foreign investors participating in business cooperation contracts may not use capital deposit accounts. specialized in foreign currency to carry out direct investment activities in Vietnam.

Article 20. Organization of implementation

Chief of Office, Director of Foreign Exchange Management Department, Heads of relevant units under the State Bank, Directors of State Bank branches in provinces and centrally run cities, Chairman of the Board of Directors, Chairman of the Members' Council, General Director (Director) of credit institutions, foreign bank branches are responsible for organizing the implementation of this Circular.