Guidance on foreign loans
Foreign loans required to be registered with SBV. — Photo soha.vn
The State Bank of Viet Nam (SBV) issued Circular 25/2014/TT-NHNN on 15 September 2014 to guide registration of foreign loans not guaranteed by the Government (“foreign loans”) and changes made to their terms and conditions.
The Circular applies to resident enterprises, co-operatives, co-operative alliances, and credit institutions except State-owned commercial banks, and foreign bank branches established and operating in Viet Nam as borrowers (“Borrower”), and organizations and individuals borrowing foreign loans.
Foreign loans required to be registered with SBV:
1. Medium and long-term foreign loans;
2. Short-term foreign loans extended to terms of more than one year;
3. Short-term foreign loans not extended but still having balances after one year of initial capital withdrawal, except for those that the Borrower has repaid in full within 10 days after one year.
Entities required to register foreign loans and changes thereof:
1. Borrower entering into a foreign loan agreement for direct disbursement from non-resident lender;
2. Credit institution or foreign bank branch providing loans authorized by non-resident principal of loan entrustment;
3. Party having repayment obligations under a debt instrument issued to a non-resident;
4. Lessee in a financial leasing contract signed with a non-resident;
5. Importer of goods having deferred payment options.
SBV authority
SBV (Foreign Exchange Management Department) has the authority to certify registration of foreign loans (and changes thereof) above US$10 million as well as foreign loans denominated in VND. SBV branches in provinces and cities (“SBV branch”) have the authority to certify registration of foreign loans and changes thereof when their value does not exceed $10 million.
Procedures for registration of foreign loans
1. The Borrower must prepare and submit request for foreign loan registration personally or by post to either SBV or an SBV branch within 30 days after:
(1) the date of signing the medium or long-term foreign loan agreement, or the date of signing a guarantee letter applicable to the guaranteed loan, or the date of signing the agreement for capital withdrawal based on a signed framework agreement, prior to actual capital withdrawal;
(2) the date of signing the agreement on extending a short-term foreign loan to become a medium or long-term loan;
(3) a full year has passed after the initial withdrawal.
2. SBV must provide written certification of foreign loan registration within 20-60 days after the date of receipt of the Borrower’s eligible application. In case of foreign loans denominated in VND that require the SBV Governor’s approval, procedures for foreign loan registration are concurrent with those needed to request the approval. The registration of the foreign loan also has to be concurrent with its approval.
Registration of changes to foreign loans:
1. If changes are made to the content of any foreign loan certified by the SBV, the Borrower must register such changes with the SBV, except in the following instance:
If the plan on capital withdrawal, loan repayment or expenses remittance is changed within 10 days of registration being certified by the SBV, the Borrower must notify the change to the commercial bank or foreign bank branch where the loan account has been opened and need not register the change with SBV.
Procedures for registration of changes to foreign loans:
1. Registration of changes to foreign loans should be done within 30 days after the date of signing of the agreement on the changes and prior to the effective date of the changes; or prior to the time the changes occur to changes that do not require signed agreements under terms of the foreign loan agreement).
The Borrower must submit request for registering the changes personally or by post with either the SBV or the SBV branch that has certified registration of the foreign loan or the most recent change to the foreign loan.
BIZ CONSULT