Foreign Debt Registration for companies in Viet Nam
The companies in Viet Nam must register the loans when borrowing funds from outside Viet Nam. According to the Article No. 9 of Circular No. 03/2016/TT-NHNN dated February 26, 2016, Loans subject to registration with the State Bank include:
Table of contents:
1. Mid-term and long-term foreign loans.
2. Renewed short-term loans with more than 01 (one) year of maturity term.
3. Short-term loans which are not covered by any loan renewal contract but remain the outstanding principal owed on the anniversary of the date of first fund withdrawal in a full 01 (one) calendar year, except to the extent that borrowers have already fulfilled their debt obligations within a permitted duration of 10 (ten) days after the anniversary of the date of first fund withdrawal in a full 01 (one) year.
- Circular No. 03/2016/TT-NHNN dated February 26, 2016;
- Circular No. 05/2016/TT-NHNN dated April 15, 2016;
- Circular No. 12/2014/TT-NHNN dated March 31, 2012
Loan term as the basis for determination of registration obligations
For Mid-term and long-term foreign loans, loan terms shall be determined from the scheduled date of first fund withdrawal to the planned date of final debt repayment under the terms and conditions of foreign loan agreements.
Relating to the renewed short-term loans which have more than 01 (one) year of maturity term, the loan term shall be determined from the date of first fund withdrawal to the scheduled date of final debt repayment under terms and conditions of foreign loan and foreign loan renewal agreements.
In respect of loans referred to in paragraph 3 Article 9 of Circular No. 03/2016/TT-NHNN dated February 26, 2016, the loan term shall be determined from the date of first fund withdrawal to the scheduled date of final debt repayment.
The fund withdrawal is the loan disbursement date in respect of those that require cash disbursement or the date of customs clearance of goods in respect of those arranged in the form of a foreign finance lease consistent with relevant laws and regulations.
Authority over the confirmation of registration or registration for changes in loans
The State Bank (Foreign Exchange Administration) shall carry out confirmation of registration or registration for changes in respect of a loan for which quota is more than USD (or other equivalents) 10 (ten) million and other foreign loans denominated in Vietnam dong.
The State Bank branches of centrally-affiliated cities and provinces where borrowers' head offices are located shall confirm registration or registration for changes in respect of a loan for which quota is more than USD (or other equivalents) 10 (ten) million.
Where there is any increase or reduction in loan quota, or any change to the currency unit of a loan or the borrower's head office, or the borrower is requested to contact an enterprise whose head office is located within another area, which entails changes to the authority in charge of confirmation of registration for changes of loans, the authority in order of confirmation of registration or registration for changes of initial loans shall assume the following responsibilities:
a) Act as the contact point to receive applications for registration for changes of loans from the borrower;
b) Within a maximum period of 07 (seven) working days of receipt of the application for registration for changes from the borrower, deliver all of the original applications submitted to request registration of changes of loans and a copy of the application for registration or registration for changes that have already been made to loans (if any) to competent authorities for further processing activities.
The time limit for sending or submission of dossiers:
Borrowers must send their dossiers within a maximum duration of 30 (thirty) days starting after the following:
a) the date on which the mid-term or long-term agreement is concluded, or the written guarantee is signed in respect of secured loans, or the date on which written fund withdrawal arrangements are concluded if contracting parties have agreed upon such fund withdrawal under the signed framework agreements and before such fund withdrawal takes place;
b) the date on which the agreement on the renewal of a short-term foreign loan into a mid-term or long-term loan is effected in respect of conventional loans referred to in paragraph 2 Article 9 hereof;
c) the anniversary of the date of the first fund withdrawal in total 01 (one) year in respect of conventional loans provided for in paragraph 3 Article 9 hereof.
The State Bank shall send approval or rejection of confirmation of loan registration within the following permitted periods:
a) 12 working days of receipt of valid and sufficient dossiers from borrowers if borrowers choose to apply for such registration online;
b) 15 working days of receipt of valid and sufficient dossiers from borrowers if borrowers choose the conventional registration; or
c) 45 working days of receipt of valid and sufficient dossiers from borrowers if loans denominated in Vietnam dong are subject to consideration and consent of the Governor of the State Bank following prevailing laws and regulations on enterprises’ eligibility conditions for foreign borrowing of enterprises that the Government does not guarantee;
d) If rejecting confirmation of loan registration, the State Bank must give a written explanation for such rejection.
According to Vietnamese Law, foreign loans not guaranteed by the Government must be registered with the State Bank. If the enterprise does not report to the competent agency, it will be administratively sanctioned from 30.000.000 VND to 50.000.000 VND.
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