A guide to cross-border financing in Vietnam

Author: | Published: 8 Jul 2019

Hung Quang Nguyen of law firm VILAF provides a practical guide to cross-border financing in Vietnam, including recent transaction trends, regulatory developments and the latest in offshore financing structures

www.vilaf.com.vn

In Vietnam, cross-border financing normally takes place by way of foreign lenders making loans to onshore borrowers only. It is extremely rare (and relatively difficult due to regulatory reasons) for onshore banks to provide financing to offshore entities or individuals. Such outward loans can largely be ignored as a matter of practice.

In terms of structuring, similar to other jurisdictions, financing into Vietnam takes the form of either APLMA-style syndicated or bilateral loans. The number of bilateral loans seem to far exceed syndicated ones, given that there is still a trend for banks in some jurisdictions to finance the investment of foreign investors from the same jurisdiction in Vietnam.

Not surprisingly, syndicated loans have taken on larger...