Registration of non-government guaranteed foreign loans is an administrative procedure that enterprises borrowing foreign capital in the form of self-borrowing and self-repaying must carry out at the State Bank to be granted a Notice of Loan Registration Confirmation for medium and long-term loans.
1. Foreign loans that must be registered with the State Bank
Foreign loans subject to registration with the State Bank include:
- Medium and long-term foreign loans (loans for more than 01 year).
- Short-term loans that are extended such that the total loan term exceeds 01 (one) year.
- Short-term loans without an extension agreement but with outstanding principal balance at the time of 01 (one) year from the first disbursement date, except where the borrower completes repayment of the loan within 10 (ten) days from the 01 (one) year mark from the first disbursement date (i.e., completes repayment within 01 year and 10 days from the first disbursement date).
2. How to determine the loan term for registration obligations
2.1. For medium and long-term foreign loans
The loan term is determined from the expected first disbursement date to the expected final repayment date based on the provisions of the foreign loan agreement.
2.2. For short-term foreign loans
For loans where the loan term is determined from the first disbursement date to the expected final repayment date based on the provisions of the foreign loan agreement and foreign loan extension agreement.
2.3. For short-term foreign loans without an extension agreement but with an outstanding principal balance at the 01 (one) year mark from the first disbursement date
The loan term is determined from the first disbursement date to the expected final repayment date.
2.4. Regulations on disbursement date
The disbursement date is the date of loan disbursement for cash disbursements, or the date of customs clearance for goods in the case of foreign financial lease loans, in accordance with relevant legal provisions.
3. Purpose of using foreign loan capital
The borrower is allowed to borrow foreign capital for the following purposes:
- To implement the borrower’s production and business plans or investment projects using foreign loan capital.
- To implement production and business plans or investment projects using foreign loan capital by enterprises in which the borrower participates in direct capital contribution (only applicable to medium and long-term foreign loans). In this case, the borrower’s loan limit on the total loan amount for that production and business plan or investment project shall not exceed the borrower’s capital contribution ratio in the enterprise in which the borrower participates in direct capital contribution.
- The production and business plans and investment projects using foreign loan capital specified in this clause must be approved by competent authorities in accordance with relevant Vietnamese laws and be consistent with the scope of the establishment license, enterprise registration certificate, business registration certificate, investment registration certificate, cooperative registration certificate, or cooperative union registration certificate of the borrower or the enterprise in which the borrower participates in direct capital contribution.
- To restructure the borrower’s foreign debts without increasing borrowing costs.
4. Conditions for enterprises to borrow foreign capital
4.1. Conditions for short-term foreign loans
- The borrower is not allowed to use short-term loans for medium or long-term purposes;
- For state-owned enterprises, short-term foreign loans of state-owned enterprises must be approved in principle, appraised, and accepted by competent authorities in accordance with legal provisions on the assignment and decentralization of rights, responsibilities, and obligations of the state owner towards state-owned enterprises and state capital invested in enterprises.
4.2. Conditions for medium and long-term foreign loans
4.2.1. For state-owned enterprises
Medium and long-term foreign loans of state-owned enterprises must be approved in principle, appraised, and accepted by competent authorities in accordance with legal provisions on the assignment and decentralization of rights, responsibilities, and obligations of the state owner towards state-owned enterprises and state capital invested in enterprises.
4.2.2. For non-state-owned enterprises
- If the borrower has an investment project using foreign loan capital that has been granted an investment certificate, the outstanding balance of medium and long-term loans (including domestic loans) of the borrower for that project shall not exceed the difference between the total investment capital and the contributed capital recorded in the investment certificate;
- If the borrower takes out a foreign loan to implement production and business plans or investment projects that are not granted an investment certificate, the outstanding balance of medium and long-term loans (including domestic loans) of the borrower shall not exceed the total capital demand in the production and business plan or investment project approved by competent authorities in accordance with legal provisions.
5. Dossier for registration of non-government guaranteed foreign loans
– Application for foreign loan registration (as per form in Appendix 01 attached to Circular 03/2016/TT-NHNN);
– A copy (certified by the borrower) of the legal documents of the borrower and the capital user in cases where the borrower is not the capital user, including: Establishment license, Business registration certificate, Enterprise registration certificate, Investment certificate or other equivalent documents, Cooperative registration certificate, Cooperative Union registration certificate in accordance with law and amending, supplementing documents (if any).
– A copy (certified by the borrower) or original of the document proving the loan purpose;
For medium and long-term loans
- Production and business plan, investment project using foreign loan capital approved by competent authorities in accordance with the Investment Law, Enterprise Law and enterprise charter, Cooperative Law and cooperative charter and other relevant legal documents for loans to implement production and business plans, investment projects, except for investment projects for which competent authorities have issued investment certificates clearly specifying the scale of investment capital;
- Plan for restructuring the borrower’s foreign debts approved by competent authorities in accordance with the Enterprise Law and enterprise charter, Cooperative Law and cooperative charter and other relevant legal documents for loans to restructure the borrower’s foreign debts;
For short-term loans
- Report on the use of initial short-term foreign loans meeting the regulations on short-term foreign loan conditions (with supporting documents) and the repayment plan for the foreign loan proposed for registration confirmation by the State Bank.
- A copy and Vietnamese translation (certified by the borrower) of the foreign loan agreement and the agreement to extend a short-term loan into a medium or long-term loan (if any); or disbursement document accompanied by a framework agreement;
- A copy and Vietnamese translation (certified by the borrower) of the guarantee commitment document (guarantee letter, guarantee contract, or other forms of guarantee commitment) in case the loan is guaranteed;
- A copy (certified by the borrower) of the document from the competent authority approving the foreign loan in accordance with legal provisions on the assignment and decentralization of rights, responsibilities, and obligations of the state owner towards state-owned enterprises and state capital invested in enterprises for state-owned enterprise borrowers, except for borrowers that are commercial banks with 100% state-owned charter capital.
- Report on compliance with the State Bank’s regulations on credit limits and safety ratios in the operation of credit institutions and foreign bank branches at the end of the latest month prior to the signing date of the foreign loan agreement and documents proving non-compliance with legal provisions on credit limits and safety ratios have been approved by the Prime Minister or the Governor of the State Bank (if any) for borrowers that are credit institutions or foreign bank branches;
- Confirmation from the account service providing bank (in some cases):
- For foreign loans to restructure foreign debts: Document from the account service providing bank of the borrower regarding the disbursement and repayment status for the foreign loan to be restructured from foreign loan capital;
- For foreign investor’s capital transferred to Vietnam that has been used to meet investment preparation costs and is converted into a medium and long-term foreign loan of a foreign-invested enterprise in accordance with current laws on direct foreign investment in Vietnam: Document from the lender’s account service providing bank confirming transactions related to the formation of the loan;
- For short-term loans: Document from the account service providing bank of the borrower regarding the disbursement and repayment status of the initial short-term foreign loan.
- Documents and vouchers proving legally distributed profits in Vietnamese Dong from direct investment activities of the lender (a foreign investor contributing capital to the borrower) and confirmation from the account service providing bank regarding the distribution and repatriation of profits by the lender to prove loan disbursement for Vietnamese Dong foreign loans in accordance with current regulations on Vietnamese Dong foreign loan conditions;
- Written explanation of the need for foreign loans in Vietnamese Dong in cases where foreign loans in Vietnamese Dong must be approved by the Governor of the State Bank in accordance with current regulations of the State Bank on conditions for foreign loans in Vietnamese Dong.
6. Procedure for registering a non-government guaranteed foreign loan for enterprises
Step 1: Submit the application for registration of a non-government guaranteed foreign loan
If the borrower chooses the online form:
The borrower declares the application for registration of a non-government guaranteed foreign loan on the Website to receive a loan code, prints the application from the Website, signs and stamps it;
If the borrower chooses to submit the application directly:
The borrower prints the application form, completes it according to regulations, and prepares the loan registration dossier.
Step 2: Submit the loan registration dossier
Dossier submission methods:
- The borrower sends the loan registration dossier by post;
- Submits the dossier online on the website;
- Submits directly at the State Bank;
Deadline for foreign loan registration:
The borrower must submit the dossier within 30 (thirty) days from:
- The signing date of the medium or long-term foreign loan agreement or the signing date of the guarantee document in case the loan is guaranteed, or the signing date of the written disbursement agreement in case the parties agree on disbursement based on a signed framework agreement and before actual disbursement;
- The signing date of the agreement to extend a short-term foreign loan into a medium or long-term loan for self-borrowed, self-repaid loans;
- The date marking 01 (one) year from the first disbursement date for self-borrowed, self-repaid loans after a delay of 10 days from the date marking 01 year from the first disbursement.
Step 3: The State Bank issues a document confirming or refusing to confirm loan registration
The State Bank issues a document confirming or refusing to confirm loan registration within:
- 12 (twelve) working days from the date of receipt of a complete and valid dossier from the borrower if the borrower chooses the online method;
- 15 (fifteen) working days from the date of receipt of a complete and valid dossier from the borrower if the borrower chooses the direct submission method; or
- 45 (forty-five) working days from the date of receipt of a complete and valid dossier from the borrower for loans in Vietnamese Dong that must be reviewed and approved by the Governor of the State Bank in accordance with current laws on conditions for foreign loans of non-government guaranteed enterprises;
In case of refusal to confirm loan registration, the State Bank shall issue a written document clearly stating the reason.
7. Authority to confirm registration, confirm changes in loan registration
7.1. State Bank (Foreign Exchange Management Department)
Carries out the confirmation of registration and changes in registration for loans with a loan amount exceeding 10 (ten) million USD (or other equivalent foreign currency) and foreign loans in Vietnamese Dong.
7.2. State Bank branch in the province or centrally-run city where the borrower is headquartered
Carries out the confirmation of registration and changes in registration for loans with a loan amount up to 10 (ten) million USD (or other equivalent foreign currency).
8. Regulations on foreign loan currency
8.1. Foreign loan currency is foreign currency
All foreign loans in general must be denominated in foreign currency.
8.2. Foreign loan currency is Vietnamese Dong
Foreign loans in Vietnamese Dong are only allowed in the following cases:
- The borrower is a microfinance institution;
- The borrower is a foreign-invested enterprise borrowing from profits distributed in Vietnamese Dong from direct investment activities of the lender (a foreign investor contributing capital to the borrower);
- Other cases when approved by the Governor of the State Bank based on actual circumstances and the necessity of each case.
9. Procedures for modifying foreign loan registration
9.1. Cases requiring loan modification registration
When the borrower changes any content related to the loan specified in the State Bank’s foreign loan registration confirmation document, the borrower is responsible for carrying out the foreign loan modification registration with the State Bank.
9.2. Cases requiring written notification to the State Bank
- The borrower only needs to provide written notification to the State Bank, and not carry out loan modification registration for the following contents:
- If the actual disbursement, repayment, and fee transfer schedule changes within 10 (ten) days compared to the previously confirmed schedule by the State Bank, the borrower is responsible for notifying the account service providing bank in writing to carry out disbursement and repayment according to the revised schedule; loan modification registration with the State Bank is not required.
- Change of borrower’s address within the province or city where the borrower’s head office is located;
- Change of lender, and related information about the lender in a syndicated loan with a designated representative for the lenders, except when the lender is also the representative for the lenders in the syndicated loan and the change of lender alters the role of the lenders’ representative;
- Change of the trade name of the account service providing bank.
Within 30 (thirty) days from the date of change or receipt of notification of change regarding the above contents, the borrower shall send a written notice by post or submit it directly to the loan registration confirmation authority.
9.3. Dossier for loan modification registration
- Application for loan modification registration.
- A copy and Vietnamese translation of the signed loan modification agreements (certified by the borrower) in cases where the modified contents need to be agreed upon by the parties.
- A copy (certified by the borrower) of the guarantor’s approval of the loan modification content in case the borrower’s loan is guaranteed.
- A copy (certified by the borrower) of the document from the competent authority in accordance with legal provisions on the assignment and decentralization of rights, responsibilities, and obligations of the state owner towards state-owned enterprises and state capital invested in enterprises regarding the approval of changes to the foreign loan plan for state-owned enterprise borrowers in cases of increasing the loan amount or extending the loan term.
- Dossier for increasing the loan amount.
- Confirmation from the account service providing bank regarding the disbursement and repayment status (principal and interest) up to the time of loan modification registration for cases of registering changes in the loan amount, disbursement plan, repayment plan, or the commercial bank providing account services.
10. Reporting regime for foreign loans
10.1. Reporting regime for borrowers choosing the online method
- Quarterly, no later than the 5th day of the month immediately following the reporting period, the borrower must report online the status of short, medium, and long-term loans on the Website.
- Within 10 (ten) working days from the date of receiving the borrower’s report on the Website, the Branch reviews the report on the Website to save the information into the database. If the reported information is accurate, the borrower will be notified via email that the reporting has been completed as regulated. If there is inaccurate or unclear information, the Branch will notify the borrower via email to adjust the data.
10.2. Reporting regime for borrowers choosing the direct submission method
- Quarterly, no later than the 5th day of the month immediately following the reporting period, the borrower must send a written report to the branch on the status of short, medium, and long-term loans.
- Within 10 (ten) working days from the date of receiving the borrower’s report, the branch organizes the entry of the borrower’s report into the form on the Website to save the information into the database.
10.3. Ad-hoc reporting
In ad-hoc cases or when necessary, the borrower and the account service providing bank shall report as requested by the State Bank.
11. Regulations on the rights and obligations of the borrower
11.1. Rights of the Borrower
- To decide on the form of foreign loan appropriate to the needs and purpose of use, in compliance with relevant legal provisions.
- To choose an authorized credit institution to carry out the foreign loan in accordance with legal provisions.
- To request the opening of a foreign currency account abroad to receive loan capital and fulfill commitments as per the loan agreement with the foreign lender in accordance with State Bank regulations.
- To purchase foreign currency from authorized credit institutions when fulfilling foreign debt repayment obligations as committed and agreed upon in loan agreements.
11.2. Responsibilities of the Borrower
- To use foreign loan capital for the correct purpose, in accordance with the borrower’s scope of operations, and in compliance with legal provisions.
- To be responsible for the legal capacity, financial capacity, and ability of the foreign lender to perform the loan.
- To be responsible for signing and implementing foreign loan agreements and other related agreements. Not to sign agreements with contents contrary to Vietnamese law.
- To be solely responsible for repaying self-borrowed, self-repaid foreign debts and to bear all risks when undertaking self-borrowed, self-repaid foreign loans.
- To comply with the State Bank of Vietnam’s regulations on foreign borrowing and repayment conditions; to register and register changes to foreign loans; to open and use accounts, disburse and transfer funds for foreign loan repayment.
- To comply with the provisions of this Decree, foreign exchange management regulations, other relevant Vietnamese legal provisions, and international practices in self-borrowed, self-repaid foreign borrowing and repayment activities.
- To comply with the reporting regime as stipulated by law on self-borrowed, self-repaid foreign borrowing and repayment.
- To be responsible for the accuracy and validity of dossiers, documents, and vouchers submitted to authorized credit institutions, foreign credit institutions (if allowed to open and use foreign currency accounts abroad) when carrying out transactions related to foreign loans.
- To comply with the requests of competent authorities during inspection, examination, and supervision of foreign borrowing and repayment activities as prescribed by law.
