Legal basic

• Law No. 46/2010/QH12 of June 16, 2010, on the State Bank of Vietnam
• Circular No. 03/2016/TT-NHNN dated February 26, 2016, providing several instructions on foreign exchange administration in respect of enterprise’s foreign borrowing and foreign debt repayment of enterprises
• Circular No. 05/2017/TT-NHNN dated June 30, 2017 amendments to Circular 03/2016/TT-NHNN providing several instructions on foreign exchange administration in respect of enterprises’ foreign borrowing and foreign debt repayment

Loans subject to registration

Loans subject to registration with the State Bank include:

• Mid-term and long-term foreign loans.
• Renewed short-term loans which have more than 01 (one) year of maturity term.
• Short-term loans which are not covered by any loan renewal contract but remain the outstanding principal owed on the anniversary of the date of first fund withdrawal in a full 01 (one) calendar year, except to the extent that borrowers have already fulfilled their debt obligations within a permitted duration of 10 (ten) days after the anniversary of the date of first fund withdrawal in a full 01 (one) year.

Loan registration dossier

• Loan registration form stipulated in the Circular No. 03/2016/TT-NHNN
• 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, including
  • establishment permit, business registration certificate, 
  • enterprise registration certificate, 
  • investment certificate or other equivalents, 
  • cooperative or cooperative federation registration certificate in accordance with laws and amendment or supplementation documents (if applicable).

• Copy (countersigned by the borrower) or original of written proof of borrowing purposes, including:
• In respect of loans stipulated in paragraph 1 Article 9 the Circular No. 03/2016/TT-NHNN

• • Production and business plans, investment projects using foreign loans which are approved by competent authorities in accordance with the Investment Law, Enterprise Law and Statute, Cooperative Law and Statute as well as other relevant legislative documents in respect of loans used for executing these production and business plans or investment projects, except to the extent of investment projects in which certificates of investment are issued by competent authorities with clear determination of investment fund volume;
  • Foreign debt restructuring plans of the borrower approved by competent authorities in accordance with the Enterprise Law and Statute, Cooperative Law and Statute as well as other relevant legislative documents in respect of loans used for restructuring foreign debts of the borrower;

• In respect of loans stipulated in paragraph 2 and 3 Article 9 the Circular No. 03/2016/TT-NHNN

• • Report stating that use of short-term loans conforms to regulations on eligibility conditions for short-term foreign borrowing (documentary evidence attached hereto) and debt repayment plans in respect of foreign loans of which confirmation of registration by the State Bank is requested.
•  Types of documents prescribed in Point a and Point b of this Clause shall not apply to the registration dossier for a foreign loan which is applied by a commercial bank of which more than 50% of the charter capital is held by the State, reported by direct representative of the owner or representative for state capital at this commercial bank and approved or commented by the representative agency of the owner before voted at the General Meeting of Shareholders, or the Meeting of the Management Board or of the Member Board.”. 
• 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.
• 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.
• The copy (countersigned by the borrower) of the competent authority’s written approval for 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, except for the cases where the borrower is a commercial bank of which 100% charter capital is held by the State.
• 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 effecting 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.

An account service provider’s confirmation required in the following cases:

• If foreign borrowing is to serve the purpose of restructuring foreign debts, a statement given by the borrower’s account service provider on fund withdrawal and repayment of debts incurred from foreign loans to be restructured by other foreign loans is required;
• If foreign investors’ disbursed fund transmitted to Vietnam which have already been used for meeting pre-investment expenses are converted into mid-term or long-term foreign loans of directly foreign-invested enterprises in accordance with prevailing relevant laws on foreign direct investment in Vietnam, a confirmation of collection and spending transactions relating to loan origination given by the creditor’s account service provider is required;
• If a foreign loan is covered by paragraph 2 and 3 Article 9 hereof, a statement given by the borrower’s account service provider on fund withdrawal and repayment of an initial short-term foreign loan is required.
• 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.
• 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.

Above is our consultancy about this issue. If you need more detailed advice and answers as well as how to access this service, please contact directly the Deputy Director of Sales: Lawyer Nhat Nam via hotline: 0912.35.65.75, 0912.35.53.53 or call the free legal consultation hotline 1900.6575 or send a service request via email: lienheluathongbang@gmail.com

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