Vietnam: New forex regulations

Author: | Published: 20 May 2016
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Tran Quoc Dat Vu Le Bang

On February 26 2016, the State Bank of Vietnam (SBV) issued Circular 03/2016/TT-NHNN, which provides guidance to enterprises on foreign exchange management for borrowing and repaying foreign loans (Circular 03). Then, on April 15 2016, the SBV issued Circular 05/2016/TT-NHNN, which amends several provisions of Circular 03. These are collectively referred to as Circular 05; they have been effective since April 15 2016. Circular 05 introduces a comprehensive regulation regarding the registration, drawdown and repayment of foreign loans by companies. Notably, Circular 05 also contains a number of new regulations on foreign loans in an attempt to simplify administrative procedures.

Registration requirements

Foreign loans which must be registered include: (i) medium- and long-term loans; (ii) short-term loans which are renewed and whose total loan term exceeds one year; and, (iii) short-term loans which are not contractually renewed but still have an outstanding loan balance on the full one-year period from the first disbursement date, except where the borrowers already fulfilled their debt obligations within 10 days from the date of the one-year period. Although registration was required in all previous regulations, it should be noted that a foreign loan in the form of import of goods on deferred payment terms no longer has to be registered under Circular 05.

Accounts for drawdown and repayment

Circular 05 states that a borrower that is a direct foreign-invested enterprise (FDI enterprise) must draw down and repay medium- and long-term foreign loans through its direct investment capital account (DICA). A short-term foreign loan can be made through DICA or another account for the borrowing and repayment of foreign loans opened at one authorised bank. For a borrower that is not an FDI enterprise, drawdown and repayment must be made through its bank account for the borrowing and repayment of foreign loans opened at one authorised bank.

Online system

Circular 05 regulates the SBV's management of data and information on enterprises' borrowing and repayment of foreign loans via the websites: or Accordingly, the borrower can submit reports relating to foreign loans by the online reporting method or through the conventional reporting method (submitting printed reports to the SBV).

Vu Le Bang and Tran Quoc Dat