On October 18th, 2021, the State Bank of Vietnam enacted a Draft Circular guiding several contents on foreign exchange management for foreign borrowing and repayment of enterprises. The main overview of the Draft that amendment towards simplifying administrative procedures, increasing the application timeline, expanding the method of application submission, and cases which not require registration or registration for changes in foreign loans; supplementing instructions on using the lender’s account opened at a commercial bank, guiding the foreign exchange management for foreign loan security measures; modify the frequency of monthly statistical reports,…Some notable contents of the Draft are:
a. Scope of regulation of the Draft Circular
This Draft is expected to be an essential state management instrument to regulate foreign borrowing and debt repayment activities with a wide range of adjustments, including:
- Procedures for registration and registration of changes to foreign loans of enterprises that the Government does not guarantee.
- The opening and use of the Borrower’s foreign loan and repayment account; the beginning and use of the Lender’s payment account at an authorized credit institution in Vietnam to make foreign loans.
- Capital withdrawal, debt repayment and other money transfers related to the performance of foreign loans.
- Managing foreign exchange for payment and money transfer transactions related to the performance of security obligations and repayment of debt receipts between the Borrower and the guarantor related to foreign loans.
- Providing, using and managing information on the website to manage foreign loans and repayments not guaranteed by the Government (hereinafter referred to as the website).
- Statistical reporting regime on foreign borrowing and repayment activities of enterprises that the Government does not guarantee.
b. Documents will be replaced
When this Draft Circular takes effect, a substantial number of documents will be replaced, including:
- Circular No. 03/2016/TT-NHNN dated February 26th, 2016 of the State Bank Governor guiding foreign exchange management for borrowing and paying foreign debts of enterprises.
- Circular No. 05/2016/TT-NHNN dated April 15th, 2016, of the Governor of the State Bank amending and supplementing several articles of Circular 03/2016/TT-NHNN dated February 26th, 2016 of the Governor The State Bank guides on foreign exchange management for borrowing and paying foreign debts of enterprises.
- Circular No. 05/2017/TT-NHNN dated June 30th, 2017 of the Governor of the State Bank amending and supplementing several articles of Circular 03/2016/TT-NHNN dated February 26th, 2016 of the Governor The State Bank guides on foreign exchange management for borrowing and paying foreign debts of enterprises.
With the consolidation and combination of numerous current regulations on foreign borrowing and debt repayment in the Draft Circular, this will be a document that brings a lot of consistency and convenience for corporations to implement.