Foreign borrowing is an activity subject to the State's management on loan conditions and foreign exchange transactions arising from foreign borrowing must also follow a prescribed order. Here are the instructions for doing so.
On September 30, 9, the State Bank of Vietnam (“SBV”) issued Circular No. 12/2022/TT-NHNN guidance on foreign exchange management for foreign borrowing and debt repayment of enterprises. This Circular prescribes the order and procedures for registration and registration of changes to foreign loans of enterprises that are not guaranteed by the Government; the opening and use of accounts by the Borrower, the Lender; capital withdrawal, money transfer related to loan performance; the transfer of funds related to the enforcement of security measures for foreign loans; use the Website; and the reporting regime on foreign loans and repayment of enterprises which are not guaranteed by the Government.
Circular 12/2022 takes effect from November 15, 11 and replaces Circular 2022/03/TT-NHNN dated February 2016, 26 guiding a number of contents on foreign exchange management for loans , foreign debt payment of enterprises and relevant amendments and supplements.
1. What are the forms of foreign loans? #
Foreign loans as prescribed in Circular 12/2022/TT-NHNN include loans in the form of foreign loans through:
- Loan contract
- Contract for import of goods with deferred payment
- Loan entrustment contract
- Financial leasing contract
- Issuance of debt instruments in the international market of the Borrower
Note:
Foreign loan in the form of goods import with deferred payment is the import of goods with the first withdrawal date before the last payment date; in which, the withdrawal date is:
- The 90th day from the date of issuance of transport documents in case the account service provider requires a set of payment documents to have a transport document.
- The 45th day from the date of completion of the inspection stated on the customs declaration has been cleared in case the bank providing account services does not require the payment documents to have transport documents.
Foreign loans in the form of import of goods with deferred payment are not subject to registration or registration for changes in foreign loans.
Transactions of money transfer for debt repayment (principal, interest), payment of fees related to foreign loans in the form of goods import with deferred payment are not required to be done through foreign loan and debt repayment accounts.
However, the foreign borrower in the form of importing goods with deferred payment still has to fulfill the reporting obligations to the SBV in accordance with this Circular 12/2022/TT-NHNN.
2. How to use the Website? #
Borrowers use the website for management of foreign loans and repayment of foreign loans of the State Bank to:
- Registration/registration for change of medium and long-term loans (except for foreign loans in the form of goods import with deferred payment) [optional but recommended]
- Report on the implementation of foreign loans [required implementation]
- Update the changes of medium and long-term loans but do not have to re-register [required implementation]
The address of the website of the State Bank is www.sbv.gov.vn or www.qlnh-sbv.cic.org.vn
The Borrower shall register for an access account on the Website in the following order:
- Access the website mentioned above, follow the instructions, fill in the information in the electronic declaration, print the electronic declaration to sign and seal.
- Send this declaration via postal service or directly at the SBV branch in the province or city where the Borrower's head office is located.
- State Bank branch of the province or city where the Borrower's head office is located, approves and grants an account to access via the registered email box within 3 working days from the date of receipt of the application form. . If the account is refused, there must be an online reply stating the reason.
3. Borrower's reporting obligations #
Monthly, no later than 05th of next month During the reporting period, the Borrower must report online on the performance of short, medium and long-term loans at the Website.
In case the Website encounters a technical error and cannot send the report, the Borrower shall send a written report according to the form in Appendix 05 issued together with Circular 12/2022/TT-NHNN.
4. Documents required when performing transactions related to borrowing and paying foreign loans at the Bank #
When performing money transfer transactions related to borrowing and repaying foreign loans, related parties need to provide the following documents:
General documents:
- Foreign loan agreements, loan agreement change agreements and other agreements related to foreign loans
- Written confirmation or invalidation of registration, registration for change of foreign loans of the State Bank (if any)
Private documents:
Transfer money for foreign loan and debt repayment transactions:
- Plans for use of loan capital, investment projects using short-term foreign loans of short-term foreign loans (with the Borrower's commitment that this plan has been approved by competent authorities in accordance with regulations of law). regulations on conditions for borrowing and paying foreign debts) (new points to note, except for foreign loans in the form of goods import with deferred payment)
- Documents proving that the Borrower complies with the online reporting regime on short-term foreign borrowing and repayment (screenshot of the report on the Website with the Borrower's confirmation) (new point to save Note, applies to foreign loans in the form of deferred import of goods)
Money transfer for performance of security obligations:
- Agreement on guarantee, secured by assets related to foreign loans
- A written request for performance of security obligations from the lender (or the organization representing the lender or the organization representing the lender handling the collateral)
- A written confirmation of the Borrower's account service provider on the situation of capital withdrawal and loan repayment up to the time of request for money transfer to fulfill security obligations.
- Other documents according to the internal regulations of each bank
5. Loan change registration and loan change notification #
1. Change the time of capital withdrawal and principal repayment within 10 working days compared to the plan confirmed by the State Bank
2. Change of address of the Borrower but not the province or city where the Borrower's head office is located, the Borrower shall send a notice of change of address to the competent authority to confirm registration and registration. sign changes to Borrower's foreign loan
Competent Authority:
- Foreign Exchange Management Department – SBV: for loans with loan amount over 10 million USD (or other currency of equivalent value)
- State Bank branch in the province or city where the Borrower's head office is located: for loans with a loan amount of up to USD 10 million (or other currency of equivalent value) excluding foreign loans in VND Men must be reviewed and approved by the Governor of the State Bank
3. Change of the Lender, relevant information about the Lender in the syndicated loan with the appointment of representatives of the Lenders, unless the Lender is concurrently the representative of the Lenders in the loan. syndication and the change of the Lender changes the role of representatives of the Lenders
4. Change of commercial transaction name of account service provider, security transaction bank
5. Change the plan for paying interest and fees on foreign loans compared to the plan confirmed by the State Bank in the written confirmation of registration or registration for change of foreign loans, but the method of determining interest is not changed. , fees specified in the foreign loan agreement
Note: The borrower is responsible for making a table of interest and fee payable so that the account service provider has a basis for checking and monitoring when performing the money transfer.
6. Change (increase or decrease) the amount of capital withdrawal, repayment of principal, interest and fees within 100 currency units of the foreign borrowed currency compared with the amount stated in the registration confirmation document, document foreign loan change registration confirmation
7. Change the actual amount of capital withdrawal or principal repayment of a particular period less than the amount stated in the capital withdrawal and debt repayment plan on the written confirmation of registration or the written confirmation of registration for change of account. foreign loan
Note: Before withdrawing and repaying the remaining amount of that period, the Borrower is responsible for registering a change in the plan for capital withdrawal and debt repayment for the remaining unrealized amount.
6. Opening and using the Lender's Vietnam dong account to make foreign loans #
The lender opens and uses a Vietnamese dong payment account of a non-resident at 01 credit institution, foreign bank branch in Vietnam to perform the purposes listed below. This account is only used for purposes related to the implementation of foreign loans.
Loans in Vietnam Dong:
The following conditions must be fully met:
- Lender is a foreign investor contributing capital to the Borrower
- Borrower is a foreign direct investment enterprise
- The source of the loan is the profit from foreign direct investment activities in the territory of Vietnam
Other foreign currency loans:
Applies to one of the following cases:
- Debt recovery of short-term loans subject to registration but not eligible for registration confirmation, including short-term loans with extension of principal repayment period whose total term is over 01 year or Short-term loan without extension agreement but with outstanding principal balance at the time of full 01 year from the date of first capital withdrawal
- Debt recovery of outstanding foreign loans but written confirmation of registration or change registration is terminated due to fraudulent information or forged documents in dossiers.
7. Opening and using the Borrower's foreign loan and repayment account #
Borrowers open and use accounts to borrow and repay foreign loans in the following cases:
Type | Loan type | Loan term | Account Type |
Foreign-invested enterprises | Foreign loans in the form of goods import deferred payment | Short/medium/long term | Payment account |
Other types of loans | Short-term | Direct investment capital account or foreign loan repayment account | |
Medium and long term | Direct Investment Capital Account | ||
Enterprises without foreign investment | Foreign loans in the form of goods import deferred payment | Short/medium/long term | Payment account |
Other types of loans | Short-term | Account for borrowing and repaying foreign loans | |
Medium and long term | Account for borrowing and repaying foreign loans |
The above is a guide that summarizes some of the important points of Circular 12 / 2022 / TT-NHNN by Expertis. If you need advice on borrowing and repaying foreign loans, please contact us.
