Registration Of Cross-Border Loans To Vietnam Borrowers

13/10/2022

CONTENT

Registration of cross-border loans to Vietnam borrowers

When a Vietnamese enterprise borrows capital from a foreign bank or borrows capital from a credit institution outside Vietnam, the enterprise must follow the procedure for applying for a permit with the State Bank of Vietnam.

Normally, permission is required for two procedures:

1. Registration of a loan with SBV (State Bank)

2. Register for a change loan at SBV (State Bank).

THE LOAN REGISTRATION PROCESS IN A STATE BANK

Foreign loans not guaranteed by the Vietnamese government

· Conventional loans

Registration of a foreign loan at the State Bank (SBV)

Foreign loans that must be registered with SBV include:

· Medium and long-term external loans

· Short-term loans without renewal contract and outstanding balance within one year from the first disbursement

Extension of short-term loans for more than 1 year

Register for a change loan at SBV (State Bank)

Changes and adjustments to foreign loans must be registered with SBV by the Borrower. However, the borrower only needs to write an application and notify SBV if there are certain changes:

· Creditor information

· Name of the commercial transaction of the invoice service provider

· Borrower's head office address

· Changes have been made within 10 days of SBV since they were approved by the State Bank for repayment, disbursements, withdrawal and actual payment.

Preparation of documents, application and documentation, and the result of the application are the three basic stages of applying for a foreign loan.

Registration may have an impact on the loan application's outcome, and foreigners may be subject to fines if they fail to register on time. To avoid negative results and unnecessary penalties, borrowers must submit the required documents within 30 days. The 30-day start date varies and depends on the type of foreign loan.

How to apply for loans?

There are two ways to register:

· Register online

· Register directly

Documents required to apply for a loan

· Foreign loan application form

· Specific objectives of the loan in writing

· Business registration certificates or investment registration certification

· Foreign loan agreement

· Letter of guarantee for a loan, document or agreement

· Written permission from authoritative agencies

· State Bank of Vietnam Regulatory Compliance Report

· Service Provider Verification Account

· Interest bills in Vietnamese Dongs (VND)

· Explanation of the demand for foreign capital in VND

Loan application process

After receiving all valid documents, the State Bank will notify borrowers if their registration was successful or unsuccessful in the following terms:

· 12 working days to register online

· 15 working days to register directly

· 45 working days for foreign loans in VND

The process for these two procedures is described in detail following.

1. REGISTRATION OF NEW FOREIGN CAPITAL IN THE STATE BANK

The system of regulatory documents

· Pursuant to Decree No. 219/2013/ ND-CP of the Government dated December 26, 2013, on Supervise the foreign borrowing and debt payment of enterprises not guaranteed by the Government

· Pursuant to Circular No. 12/2014 / TT-NHNN of the State Bank of Vietnam dated March 31, 2014, setting out the conditions for foreign loans of enterprises not guaranteed by the government;

· Pursuant to Circular No. 03/2016/TT-NHNN of the State Bank of Vietnam dated February 26, 2016 containing a number of provisions on the management of foreign exchange for external borrowing and repayment of loans to enterprises; Circular 05/2017 / TT-NHNN, amending and supplementing a number of articles of Circular No. 03/2016 / TT-NHNN of February 26, 2016 of the Governor of the State Bank of Vietnam, which contains a number of articles on foreign exchange management for external borrowing and repayment of enterprises

The processes and procedures for registering foreign loans of enterprises not guaranteed by the state are as follows:

1. Registration-required loans (Article 9 of Circular No. 03/2016 / TT-NHNN)

· Long-term and medium-term external loans

· Short-term loans are provided for a period of more than 01 (one) year.

· Short-term loans without an extension agreement, but with the principal amount outstanding at the time of the full 01 (one) year from the date of the first withdrawal of capital, if the Borrower does not complete the loan repayment within 10 (one) years. 10 (ten) days from the date of round 01 (one) year from the date of the first withdrawal of capital.

2. Loan Registration Agreement for Foreign Loans (Article 11 of Circular No. 03/2016 / TT-NHNN)

· Existing withdrawal agreements entered into between the Borrower and the Lender who are non-residents, resulting in the Borrower's obligation to repay debt or debt instruments issued by residents to non-residents.

· In case, the Borrower's mid-term and long-term stand-alone loan is founded on a written capital withdrawal arrangement based on a framework agreement

3. Loan registration procedure (article 13 of circular 03/2016 / TT-NHNN)

Step 1: Complete your application and submit it to the Loan Registration Confirmation Agency, either online or in-person, as directed.

Step 2: The State Bank has a written confirmation or refusal to confirm the registration of the loan. In case of refusal to confirm the registration of the loan, the State Bank sends a written explanation, which clearly indicates the reason.

Step 3: State Bank/Branch of State Bank verifies documents, updates processing status on the website, or generates a loan code and saves the information in the loan and repayment database. Foreign enterprises have no guarantee from the government.

4. Application for foreign loan registration (article 14 of circular 03/2016 / TT-NHNN)

· Loan application form

· Copy of the Borrower's or Borrower's legal documents

· Copy or original of a document confirming the purpose of the loan, including:

+ Production, business and investment projects using foreign loans approved by the competent authorities and the Borrower's external debt restructuring plan approved by the competent authorities (for loans in paragraph 1 of Article 9 of Circular 03/2016 / TT-NHNN)

+ Report on the initial use of short-term foreign loans to meet the requirements of the terms of short-term foreign loans (attached with supporting documents) and the foreign loan repayment plan requested by the State Bank of the Country of confirmation of registration. (For loans in accordance with paragraphs 2 and 3 of Article 9 of Circular 03/2016 / TT-NHNN)

· A copy and Vietnamese translation of the foreign loan agreement, as well as any agreements for the issuance of a short-term, medium-term, or long-term loan (if any), or a revocation document attached to the framework agreement.

· The copy and Vietnamese translation (certified by the Borrower) of the guarantee commitment.

· Bank certification of the account service provider (in some cases referred to in clause 8 of article 14 of circular 03/2016 / TT-NHNN);

· Text and document confirming the legal distribution of profits in Vietnamese Dongs from direct investment of the Lender, which is a foreign investor contributing capital with the Borrower, and confirmation of the bank account of the provider of distribution and repatriation of the lender's profits to confirm the payment of the loan in the case of foreign loans in VND in accordance with the current provisions on the terms of foreign loans in VND;

· Written explanation of the need for a foreign loan in Vietnamese Dongs for a foreign loan in Vietnamese Dong must be authorized by the Governor of the State Bank in accordance with the current provisions of the State Bank on the terms of foreign loans in Vietnamese Dongs.

Note: All copies must be certified by the Borrower.

5. Term

· Application deadline: 30 (thirty) days.

· The State Bank issues a written confirmation or refusal to confirm the registration of a loan in time:

· 12 (twelve) working days online;

· 15 (fifteen) working days in the traditional form;

· Forty-five (45) business days in case the Vietnamese Dong loan is to be reviewed and approved by the Governor of the State Bank in accordance with the current provisions on the terms of external loans of enterprises not guaranteed by the government.

· The above period only applies if the application is completed and valid.

6. Fees: No

2. PROCEDURE FOR REGISTRATION FOR CHANGE OF A FOREIGN LOAN IN THE STATE BANK

The procedure for registering changes in foreign loans of enterprises not guaranteed by the state, in accordance with the instructions of the State Bank of Vietnam (latest version)

DETAILED INSTRUCTION

- Order of execution:

+ Step 1: Businesses must submit their dossiers on time:

30 (thirty) days from the date of signing the amendment agreement or until the moment when the content change occurs (in the case when the changed content does not require the signing of the amendment agreement, but still ensures compliance with the Loan Agreement Overseas), the Borrower submits the loan change registration application by mail or directly to the loan registration confirmation agency or the school loan change registration last confirmation agency. If a loan change has been registered, the loan change is registered in accordance with the authority specified in Article 18 of Circular No. 03/2016 / TT-NHNN.

Borrowers who choose the online option can submit additional documents online in accordance with the instructions on the website.

+ Step 2: Competent authority has written confirmation or refusal to confirm registration of loan changes in time:

a) 12 (twelve) business days from the date of receipt of the Borrower's complete and valid dossier (if the Borrower uses the online form), or;

b) 15 (fifteen) business days from the date of receipt of the complete and valid dossier of the Borrower (if the Borrower chooses the traditional method);

If the responsible authority refuses to confirm registration for a credit change, the competent authority must provide a written explanation that clearly states the reason.

- How to do:

+ Directly submit to the competent authorities

+ Use the postal service.

- Profile composition:

1. A loan application form

2. A copy and Vietnamese translation of the signed loan amendment agreement (with confirmation from the Borrower) in case the amendments need to be agreed between the parties.

3. A copy (with the Borrower's confirmation) of the guarantor's consent to amend the loan in case of collateral for the Borrower's loan.

4. A copy (with the Borrower's confirmation) of the document of the competent authority in accordance with the law on the transfer and decentralization of the exercise of the rights, duties and obligations of the state owner in relation to property. Invested state-owned enterprises and state capital in enterprises on the approval of changes to the external lending plan of the borrower, which is a state-owned enterprise, in case of changes in order to boost loan turnover or extend the loan term.

5. In the event of a change in the increased loan turnover:

A copy (with the Borrower's confirmation) or original document confirming the purpose of the loan includes:

a) For medium and long-term external loans

(i) Production and business plans, investment projects using foreign loans, approved by the competent authorities in accordance with the provisions of the Investment Law, the Enterprise Law and the Enterprise Charter, the Cooperative Law and the Cooperative Law. the cooperative's charter and other relevant legal documents applicable to loans for the implementation of production and business plans and investment projects, if the investment project has not already been approved by the competent authority. The right to issue an investment certificate indicating the amount of investment capital;

(ii) The borrower's foreign debt restructuring plan is approved by the competent authority in accordance with the provisions of the Enterprises Law and the Enterprise Charter, the Cooperative Law and the Cooperative Charter and other legal documents relating to the Borrower's External Debt Restructuring Loan;

b) In the case of loans:

(i) Extended short-term loan for more than 01 (one) year.

(ii) A short-term loan without an extension agreement, but with an outstanding principal balance for a full date of 01 (one) years from the date of the first withdrawal of capital, except that the Borrower does not complete repayment of the loan within a short period of time. 10 (ten) days from the date of full 01 (one) year from the date of the first withdrawal of capital.

Report on the initial use of short-term foreign loans to meet short-term foreign borrowing requirements (attached with supporting documents) and foreign loan repayment plan requested by the State Bank of the Country of registration confirmation.

6) If the borrower is a credit institution, a branch of a foreign bank increases external credit turnover:

Report on compliance with the State Bank's requirements on credit limits and prudential standards in the activities of credit institutions and foreign bank branches at the end of the previous month prior to the date of signing the external loan agreement, and a document confirming non-compliance with the provisions of the law on credit limits and safety standards, approved by the Prime Minister or the Governor of the State Bank in accordance with the law (if any) for a borrower who is a credit institution or a branch of a foreign bank.

7) Written evidence of the account provision of services about the situation of withdrawal and repayment of capital (principal and interest) prior to registration for a loan change, in case of registration for a change in loan turnover, an accounting plan for capital withdrawal, debt repayment plan or a commercial bank providing account services.

- Number of documents: 01 set.

- Settlement period:

a) 12 (twelve) business days from the date of receipt of the Borrower's complete and valid dossier (if the Borrower chooses the online form);

b) 15 (fifteen) business days (if the Borrower chooses the traditional procedure) from the date of receipt of the Borrower's complete and legal dossier;

- Entities performing administrative procedures: Foreign borrowers in accordance with the provisions of Circular No. 03/2016 / TT-NHNN.

- Authorities in charge of administrative procedures:

+ State Bank of Vietnam (Foreign Exchange Office): for loans with a loan turnover of more than 10 (ten) million USD (or other equivalent foreign currency) and foreign loans in Vietnamese Dong.

+ Branches of the State Bank in provinces and cities with central administration: for loans with a credit turnover of up to 10 (ten) million US dollars (or in another foreign currency of equivalent value).

- Administrative procedures' results: Written confirmation of registration of changes in foreign loans or written refusal to confirm registration of changes in foreign loans.

- Fees: no

- Name of the application form and declaration form:

a) Statement printed from the website www.sbv.gov.vn or www.qlnh-sbv.cic.org.vn, signed and stamped (in case the Borrower chooses the online form)

b) Application form according to the form in Appendix 03 to Circular No. 03/2016 / TT-NHNN (in case the borrower chooses the traditional form).

- Requirements and conditions for carrying out administrative procedures: comply with and fully comply with the provisions on the conditions of external borrowing, foreign exchange management for external borrowing and debt repayment activities in accordance with the law.

- Legal basis for administrative procedures:

+ Circular No. 12/2014 / TT-NHNN of 03/31/2014 governing the conditions for non-government-guaranteed foreign loans;

+ Circular No. 03/2016 / TT-NHNN dated February 26, 2016, containing a number of provisions on currency management for the repayment of external debt of enterprises. Effective date 04/15/2016.

+ Circular No. 05/2016 / TT-NHNN of April 15, 2016, amending and supplementing Circular No. 03/2016 / TT-NHNN of February 26, 2014, which contains a number of foreign exchange management provisions for foreign lending by enterprises. Effective date 04/15/2016.

NOTES DURING REGISTRATION OF FOREIGN LOANS WITH THE STATE BANK

External Loan Implementation and Repayment Reporting Guidelines

1. This includes non-bank credit institutions.

2. In the event that enterprises with 10% to less than 51% of foreign investment capital, but at the same time have 50% or more of state capital, they should be classified in the S50 group, not in the F10.

For example: Company A: The government owns 60% of the stock and a foreign investor owns 40% of the stock, so tick just box S50 and not box F10.

3. Enterprises report all of their legal documents, such as investment certificates, business registration certificates.

4. Businesses report the total outstanding loans converted into US dollars as medium- and long-term loans in the form of deferred merchandise imports, without separate reporting of loans

5. In the case of loans with several lenders, but without using the structure of the lender's / agent's representative bank, the company informs

6. For selected items (check the box), if Enterprise uses the word version downloaded from qlnh-snv.cic.org.vn:

+ The enterprise double-clicks the left mouse button in the square selection box to check the box, then selects "Checked" in the "Default value" section.

+ The enterprise double-clicks on the square to be selected, then selects "Not checked" in the "Default value" section to deselect an empty field.

7. In the same format as the first loan, businesses supply information on other medium- and long-term loans.