1. Cases of opening and using foreign currency accounts abroad by residents who are economic organizations
According to Article 3 of Circular 20/2015/TT-NHNN, economic organizations are allowed to open and use foreign currency accounts abroad in the following cases:
- Economic organizations open and use foreign currency accounts abroad to meet the conditions for applying for a license to establish and operate a branch or representative office according to the provisions of the laws of the host country.
- Economic organizations open and use foreign currency accounts abroad to serve the operations of branches and representative offices abroad.
- Enterprises, cooperatives and cooperative unions (hereinafter referred to as foreign borrowers) open and use foreign currency accounts abroad to make foreign loans according to agreements with foreign lenders .
- Enterprises subject to particularly important investment under Government programs; enterprises investing in the form of public-private partnerships (PPP) open and use overseas accounts to fulfill commitments with foreign parties .
- Economic organizations open and use foreign currency accounts abroad to implement commitments, agreements, and contracts with foreign parties, including construction contracts abroad; ship purchase and sale contracts with foreign parties; other commitments, agreements, and contracts with foreign parties, excluding the opening and use of foreign currency accounts abroad to implement foreign loans at the request of foreign lenders.
Economic organizations need to be granted a license by the State Bank to open and use foreign currency accounts abroad.
Within the scope of this article, we only mention the procedures for opening and using foreign currency accounts abroad for the case in Article 3.5 of Circular 20/2015/TT-NHNN ” Economic organizations open and use foreign currency accounts abroad to implement commitments, agreements, and contracts with foreign parties, including construction contracts abroad; ship purchase and sale contracts with foreign parties; other commitments, agreements, and contracts with foreign parties, excluding the opening and use of foreign currency accounts abroad to implement foreign loans at the request of foreign lenders”
2. Duration of License to open and use foreign currency accounts abroad
The term of the License to open and use a foreign currency account abroad is also the term of use of the foreign currency account abroad, which will depend on each case of applying for the License. For the case of opening and using a foreign currency account abroad to implement commitments, agreements, and contracts with foreign parties, the term of the License will be considered based on the term of implementation of the commitments, agreements, or the term of validity of the contract with the foreign party.
3. Application for License to open and use foreign currency accounts abroad
According to Article 15 of Circular 20/2015/TT-NHNN, the application for a License to serve the implementation of commitments, agreements, and contracts with foreign parties (excluding the opening and use of foreign currency accounts abroad to make foreign loans at the request of foreign lenders) includes:
a. General documents
- Original Application for License according to Appendix No. 01 attached to Circular 20/2015/TT-NHNN.
- Copy of Business Registration Certificate, Investment Registration Certificate, Establishment and Operation License or other equivalent documents as prescribed by law.
- A copy with Vietnamese translation of the commitment, agreement, or contract signed with a foreign party containing the agreement on opening a foreign currency account abroad, or a copy with Vietnamese translation of the document from the foreign party requesting the opening of a foreign currency account abroad to implement the commitment, agreement, or contract in case this provision is not included in the commitment, agreement, or contract.
- The decision to approve the budget for using foreign currency abroad is signed by the legal representative of the organization.
b. Documents to be provided in case of performing a contract abroad
- Copies with Vietnamese translations of documents and papers related to overseas bidding projects in case of performing overseas bidding contracts: contracts signed between the investor and the main contractor; contracts signed between the main contractor and subcontractors or other related documents.
- Original document explaining expected revenue sources transferred from abroad to the country, along with supporting documents (if any).
c. Documents required to be provided in case of opening a foreign currency account abroad to execute a ship purchase and sale contract with a foreign party
- A copy of the inspection report or valid temporary registration certificate issued by a competent authority in Vietnam or a copy with a Vietnamese translation of the registration certificate issued by a competent authority abroad.
- Original document proving foreign currency source to execute ship purchase contract with foreign party.
4. Procedures for granting a license to open and use foreign currency accounts abroad
According to Article 8 of Circular 20/2015/TT-NHNN, the procedures for granting a License to open and use foreign currency accounts abroad are as follows:
- When an economic organization needs to open a foreign currency account abroad, it will prepare 01 (one) set of documents and send it by post or submit it directly to the State Bank (Foreign Exchange Management Department).
- Within 15 (fifteen) working days from the date of receipt of a complete and valid dossier, the State Bank shall issue a License according to Appendix No. 03 attached to this Circular to the organization. In case the dossier is not complete and valid, within 7 (seven) working days from the date of receipt of the dossier, the State Bank shall issue a written request for the organization to supplement the dossier. In case of refusal to issue a License, the State Bank shall notify the organization in writing stating the reasons.
5. Notable after being granted a License to open and use foreign currency accounts abroad
After being granted a License to open and use a foreign currency account abroad to fulfill commitments, agreements, and contracts with foreign parties, economic organizations need to note the following:
- Performing periodic reporting obligations: Quarterly, before the 10th of the first month of the quarter following the reporting quarter, organizations must send a report on the use of foreign currency accounts abroad (according to the form in Appendix No. 05 issued with Circular 20/2015/TT-NHNN) to the State Bank (Foreign Exchange Management Department) and the State Bank branch in the province or city where the organization is headquartered.
- Open foreign currency accounts abroad on time: If the organization does not open an account within 12 (twelve) months from the date of issuance of the License, the License will automatically expire.
See more:
1/ Why Do A Representative Offices Of Foreign Traders Should Open Bank Accounts?
2/ Vietnamese enterprises obtain short-term foreign loans
Disclaimers:
This article is for general information purposes only and is not intended to provide any legal advice for any particular case. The legal provisions referenced in the content are in effect at the time of publication but may have expired at the time you read the content. We therefore advise that you always consult a professional consultant before applying any content.
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