Procedures and procedures for foreign currency exchange by Vietnamese law

Issues related to foreign currency always considered important, as the premise for the development of a country in general, as well as the process of foreign currency exchange in particular, which always strictly controlled and managed in the territory of Vietnam. The following article by Lawyer X will help you better understand “Procedures and procedures for foreign currency exchange”. We invite you to follow and read right away!

Legal grounds

• Ordinance on Foreign Exchange 2005 (amended and supplemented in 2013)
• Circular 11/2016/TT-NHNN

What is foreign currency?

Foreign currency means the currency of another country or territory or the common currency of the European Union and other common currency used in international and regional payments (Clause 1, Article 2 of Circular 07/2012/TT-NHNN).

Trade often attaches importance to strong foreign currencies, which are widely used in international transactions, have high conversion value, and are less affected by the exchange rate of other currencies. Some of the world’s most commonly recognized hard currencies for a long time are USD (US Dollar), EURO (European Currency), GBP (British Pound), CAD (Canadian Dollar), CHF ( Swiss franc), YJP (Japanese Yen).

By 2019, there are 26 countries with a currency called the dollar, in which the USD is the most popular.

The foreign exchange market is where the trading of foreign currencies takes place. The foreign currency market of Vietnam includes the interbank foreign currency market and the foreign currency market between banks and customers. (Clause 18, Article 4 of the Ordinance on Foreign Exchange 2005, amended and supplemented in 2013)

Residents may purchase foreign currencies at credit institutions to pay for imported goods and services; transfer and bring foreign currency abroad to serve lawful needs; to pay the principal, interest, and related fees of foreign loans: (Clause 1, Article 7, Clause 3, Article 8, Article 17 of the 2005 Ordinance on Foreign Exchange, as amended and supplemented in 2013).

Conditions for organizations to be considered and licensed to operate

Conditions of business location

The location of a foreign currency exchange business agent must satisfy the following conditions:

– The tourist accommodation establishment has been rated 3 stars or more by the state management agency in charge of tourism;

– International border gates (land, air, waterway);

– A licensed amusement park for foreigners;

– Ticketing offices of foreign airlines, maritime, tourism, and international ticket offices of Vietnamese airlines;

– Tourist areas, commercial centers, and supermarkets with foreign visitors to visit and shop.

Conditions of facilities and equipment

– There is a process of foreign currency exchange

– Take measures to ensure security and safety during foreign currency exchange;

– At the transaction place, there must be a public exchange rate notice board;

– A signboard showing the name of the authorized credit institution and the name of the foreign currency exchange agent.

Eligibility and role conditions

– To be authorized by an authorized credit institution to act as a foreign currency exchange agent.

– Such an organization may only represent one credit institution.

Procedures for applying for a foreign currency exchange agent registration certificate

Application for foreign currency trading

a. An application form for approval of registration of a foreign currency exchange agent (under the form Appendix 1 to Circular 11/2016/TT-NHNN);

b. A written commitment of the economic organization, together with a copy of the proof (if any) of the establishment of a foreign currency exchange agent at the prescribed location; The economic organization’s commitment to act only as a foreign currency exchange agent for an authorized credit institution;

c. Copies of papers proving that the organization is legally established and operating: Certificate of business registration or Certificate of investment registration or other equivalent papers;

d. Report on the situation of equipment and facilities in service of foreign currency exchange;

e. A certificate issued by an authorized credit institution to employees directly working at a foreign currency exchange agent, which confirms that the employee has trained in skills to recognize real and fake foreign currency;

f. The foreign currency exchange process includes the following main contents: taking measures to ensure security and safety in the process of foreign currency exchange; recording, issuing invoices to customers, keeping documents, invoices, and books; accounting regime, accounting; report mode;

g. A copy of the foreign currency exchange agency contract signed with an authorized credit institution.

Profile composition

• An application form for approval of registration of a foreign currency exchange agent (made according to the form in Appendix 01 of Circular No. 11/2016/TT-NHNN);
• A written commitment of the economic organization, together with a copy of the evidencing paper (if any) on the establishment of a foreign currency exchange agent at the location prescribed by the Government on the conditions for the economic organization to carry out its activities. foreign currency exchange agency; the economic organization’s commitment to act only as a foreign currency exchange agent for an authorized credit institution;
• Copies of papers proving that the organization is legally established and operating: Certificate of business registration, Certificate of investment registration or other equivalent papers as prescribed by law;
• Report on the situation of equipment and facilities in service of foreign currency exchange;
• A certificate issued by an authorized credit institution to employees directly working at a foreign currency exchange agent, which confirms that the employee has been trained in skills to recognize real and fake foreign currencies;
• The foreign currency exchange process includes the following main contents: taking measures to ensure security and safety in the process of foreign currency exchange; recording, issuing invoices to customers, keeping documents, invoices and books; accounting and bookkeeping regimes; report mode;
• A copy of the foreign currency exchange agency contract signed with an authorized credit institution, including the following main contents:

(i) Name, head office address, contact phone number of the contracting parties;

(ii) Names and addresses of foreign currency exchange agents;

(iii) Regulations that foreign currency exchange agents can only buy foreign currencies in cash (except for agents located in isolated areas at international border gates) and resell foreign currencies in cash (in addition to foreign currencies). remaining funds) to an authorized credit institution;

(iv) Regulations on the principle of determining the buying and selling exchange rates (for agents located in isolated areas at international border gates) for customers and the cash resale rates for foreign currencies to credit institutions. use authorization in accordance with regulations on foreign exchange management; stipulate the agency commission fees (if any);

(v) Rights and obligations of the parties to the contract, which clearly stipulates that the foreign currency exchange agent must strictly comply with the foreign currency exchange process; stipulate that the authorized credit institution must periodically inspect the activities of the agents to ensure the correct implementation of the contract and the provisions of the law;

(vi) Agreement on the amount of the remaining fund and the time limit for selling the purchased foreign currency in cash to an authorized credit institution.

Where to apply

State Bank branches in provinces and cities in localities where economic organizations set up foreign currency exchange agents.

The time limit for settlement

– Within 30 (thirty) working days from the date of receipt of complete and valid dossiers.

– In case the dossier is incomplete or invalid, within 10 (ten) working days from the date of receipt of the dossier, the State Bank branch of the province or city in the locality shall send a written request to the organization. additional profile.

– In case of refusal, the State Bank branch of the province or city shall send a written notice clearly stating the reason.

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