WHICH FOREIGN LOANS MUST BE REGISTERED AT THE STATE BANK OF VIETNAM?

Enterprises that want to borrow foreign capital to carry out business operations and investment must comprehend the legal regulations on the registration of foreign loans with State Bank of Viet Nam (“SBV”).

1.    Loans that must be registered with the SBV:

Not every foreign loan has to be registered with the SBV. Enterprises only need to carry out registration procedures for loans specified in Article 9, Article 10 of Circular 03/2016/TT-NHNN of the SBV, namely:

–    Foreign medium and long-term loans.

Medium and long-term loans are loans with a loan term of more than 1 year. The term of this loan is determined from the expected date of first capital withdrawal to the expected final repayment date on the basis of the provisions of the foreign loan agreement.

–    Short-term loans are extended for which the total term of the loan is over 01 (one) year.

Short-term loans are loans with a loan term of less than 1 year. The term of this loan is determined from the date of first withdrawal to the expected date of final repayment on the basis of the provisions of the foreign loan agreement, the foreign loan extension agreement.

–    A short-term loan without an extension contract but with outstanding principal balance at the time of full 01 (one) year from the date of the first capital withdrawal, unless the Borrower completes the loan repayment within 10 days (ten) days from the time of round 01 (one) year from the date of first capital withdrawal.

The loan term is determined from the date of first withdrawal to the expected date of final repayment.

The capital withdrawal date specified above is the loan disbursement date for loans disbursed in cash, the date of goods clearance for loans in the form of foreign financial lease in accordance with the relevant provisions of laws.

2.    Borrower registers for loan including:

Subjects must register for loans with the SBV according to Article 12 of Circular 03/2016/TT-NHNN of the SBV include:

–    Borrower signs a foreign loan agreement to disburse directly in cash with the non-resident lender.

–    Credit institutions, foreign bank branches that receive loan entrustment from the entrusting party are non-residents.

–    The party is obligated to repay the debt under the debt instrument issued to the non-resident.

–    The lessee in the financial leasing contract with the lessor is a non-resident.

3.    Which agency must enterprises register for foreign loans?

Article 18 of Circular 03/2016/TT-NHNN of the SBV stipulates the authority to confirm the registration of foreign loans of enterprises or in other words, enterprises must register loans with the following competent authorities:

–    The State Bank (Foreign Exchange Management Department) shall confirm the registration for loans with a loan turnover of over 10 (ten) million USD (or other foreign currencies of equivalent value) and Loans with a loan turnover of more than 10 (ten) million USD and foreign loans in Vietnam dong.

–    The State Bank branch in the province or centrally city where the borrower’s head office is located shall confirm the registration for Loans with a loan turnover of up to 10 (ten) million USD (or other foreign currency of equivalent value).

–    In case the change of increase or decrease in loan turnover, change of loan currency, change of the head office of the borrower, change of the borrower to an enterprise whose head office is located in another area, change the agency. Having the authority to confirm registration for changes of the loan, the agency confirming the registration and registration for change of the original loan shall have the following responsibilities:

•    Act as the focal point to receive the borrower’s application for loan change;

•    Within 07 (seven) working days from the date of receipt of the Borrower’s application for change registration, transfer all original documents of application for registration of loan changes and copies of registration documents and dossiers. Application for registration of changes made of the loan (if any) to the competent authority for further processing.

–    In case a loan in VND must be considered and approved by the Governor of the State Bank, the Foreign Exchange Management Department shall act as the focal point and coordinate with relevant units of the State Bank to report to the Governor. The State Bank shall consider and decide according to its competence.

4.    Procedures for loan registration with the SBV: 

According to Article 13 of Circular 03/2016/TT-NHNN of the SBV, the procedure for loan registration is as follows

–    Prepare Application for Foreign Loans Not Guaranteed by the Government:

•    In case the borrower chooses the online method: The borrower declares the Application for Foreign Loan Not Guaranteed by the Government on the Website to receive the Loan code, prints the Application from the Website, signed and stamped;

•    In case the Borrower chooses the traditional method: The borrower completes the application form according to Appendix 01 attached to Circular 03/2016/TT-NHNN of the SBV.

–    Send records:

Borrowers send loan registration documents as prescribed in this Circular by post or directly at the loan registration confirmation agency according to the authority specified in Article 18 of Circular 03/2016/TT- NHNN of the SBV;

Borrowers who choose to go online can choose to submit additional documents online according to the instructions on the Website.

Deadline for submission: Borrowers must send documents within 30 (thirty) days from:

•    The date of signing the medium- and long-term foreign loan agreement or the date of signing the guarantee document in the case of a guaranteed loan or the date of signing the written capital withdrawal agreement in case the parties agree on capital withdrawal on the basis of the framework agreement signed and before capital withdrawal;

•    The date of signing the agreement to extend short-term foreign loans into medium and long-term for self-paying loans specified in Clause 2, Article 9 of Circular 03/2016/TT-NHNN of the SBV;

•    One (one) year full day from the date of first withdrawal for self-paying loans specified in clause 3 Article 9 of Circular 03/2016/TT-NHNN of the SBV.

–    The State Bank has a written confirmation or refusal to confirm the loan registration within the time limit:

•    12 (twelve) working days from the date of receipt of the complete and valid dossier of the Borrower in case the borrower chooses the online method;

•    15 (fifteen) working days from the date of receipt of the complete and valid dossier of the borrower in case the borrower chooses the traditional method; or

•    45 (forty-five) working days from the date of receipt of the complete and valid dossier of the borrower in the case of a loan in Vietnam dong which must be reviewed and approved by the Governor of the State Bank in accordance with the provisions of current legal regulations on conditions for foreign loans of enterprises not guaranteed by the Government;

•    In case of refusal to confirm loan registration, the State Bank shall send a written explanation clearly stating the reasons therefore.

–    For loans in Vietnam dong, which must be permitted by the Governor of the State Bank in accordance with the current law on foreign loan conditions, the loan registration procedure is also the procedure for requesting the Governor. The State Bank considers approving the Loan; the written confirmation of loan registration is concurrently the loan approval document of the Governor of the State Bank.

–    Above competent agencies shall be responsible for:

•    Check the consistency and accuracy of the loan application file and the information declared on the Website; update the application processing status on the Website for timely follow-up by the Borrower in case the Borrower chooses the online method;

•    The organization enters relevant information of the Loan on the Website to generate the Loan code and store the information in the database of foreign loans and repayments of enterprises that are not guaranteed by the Government in case the Party Borrowing chooses the traditional method.

5.    Online loan declaration

In order to help businesses easily apply for loans, Chapter II of Circular 03/2016/TT-NHNN of the SBV has regulations on a new online form. Borrowers can declare loan registration information as well as report on loan performance at the website: https://sbv.gov.vn or https://qlnh-sbv.cic.org.vn./qlnh/.

ADK & Co Vietnam Lawyers Law Firm