|Nguyen Hoang Ly
On December 31 2015, the State Bank of Vietnam issued
Circular 40, which regulates the opening and use of capital
accounts denominated in Vietnamese Dong (VND) for the offshore
issuance of securities in Vietnam.
Circular 40 implements article 11 of government decree
70/2014/ND-CP. This provides that offshore issuers are only
allowed to issue securities in VND in Vietnam. Furthermore, all
proceeds must be remitted into a securities issuance capital
account (SICA) denominated in VND and opened at an authorised
credit institution in Vietnam.
Under Circular 40, an offshore issuer must open a SICA for
each of its investment projects in Vietnam. All of the proceeds
from the issuance must be blocked until the authorised credit
- a request from the offshore issuer to release the account
- confirmation from the State Securities Commission of the
result of the securities issuance.
Circular 40 specifies certain transactions that must be
carried out using the SICA of the offshore issuer. These
- receiving proceeds from a securities
issuance in Vietnam;
- receiving remittances from the VND payment
account of an offshore issuer to pay out dividends, bond
interest and to discharge other obligations in respect of a
securities issuance in Vietnam;
- remitting dividends, bond interest and
discharging other obligations that the offshore issuer owes
- making remittances into the VND payment
account of an offshore issuer opened with an authorised
credit institution in Vietnam to implement an investment
project in Vietnam;
- redeeming securities issued in Vietnam by
an offshore issuer; and,
- other payment transactions relating to the
issuance of securities in Vietnam by an offshore issuer.
Circular 40 took effect on March 1 2016.
Nguyen Hoang Ly