Can FDI enterprises in Vietnam lend abroad? Is this procedure limited for FDI enterprises? Let’s learn about this with LSX Lawfirm.
Regulations on foreign lending activities of economic organizations
Article 19.2 VBHN 07/VBHN-VPQH Consolidated The Ordinance on Foreign Exchange stipulates that economic organizations may lend abroad , except for the export of goods and services with deferred payment; guarantee for non-residents when permitted by the Prime Minister.
Procedure for registration of offshore loans
Accordingly Article 8 of VBHN 02/VBHN-NHNN, the Circular guides a number of contents on foreign exchange management for offshore lending and guarantee debt recovery for non-residents; Register for an offshore loan as follows:
Firstly, Sign a loan agreement, carry out loan disbursement procedures;
Secondly, Submit application for loan application abroad Within thirty (30) days from the date of signing the loan agreement and before disbursing the loan, the lender sends the application file directly or by post to the State Bank (Department of Foreign Exchange Management). );
Lastly, The State Bank confirms the registration of external loans
Within thirty (30) days from the day on which the complete and valid application is received, the State Bank shall send the lender a written confirmation of the registration of the offshore loan, including the following main contents: Lenders; the borrower; basic conditions of an offshore loan such as loan turnover, purpose of lending abroad; loan interest rate, interest penalty, fee, form of security, disbursement plan, recovery plan debt (principal, interest); credit institutions providing account services and other contents related to offshore loans (if any).
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The maximum short-term lending interest rate in Vietnam dong as prescribed in Clause 2; Article 13 of Circular No. 39/2016/TT-NHNN dated December 30; 2016 is; as follows:
Firstly credit institutions foreign bank branches (except People’s Credit Funds and Microfinance Institutions) shall apply the maximum short-term lending interest rate in VND of 5.5%/year.
Secondly people’s credit funds and microfinance institutions shall apply the maximum short-term lending interest rate in VND of 6.5%/year.
Thus depending on each lending institution; the maximum short-term lending interest rate in VND is 5.5%/year or 6.5%/year.