Foreign loan registration
Currently, for short-term loans, the law only requires the Vietnamese party and foreign lender to enter into a loan agreement and fulfill reporting obligations. However, for medium-term and long-term loans, the Vietnamese party must carry out procedures for loan registration with the State Bank.
Enterprise’s compliance with loan registration requirements will facilitate the enterprise’s transfer of loans and interest to a foreign party or the conversion of loans and interest into contributed capital, and avoid penalties for administrative violations.
Loans must be registered with the State Bank in the following cases:
- Medium-term and long-term foreign loans.
- Short-term loans whose principle repayment period is extended, resulting in a total loan term of more than 01 year.
- Short-term loans with no extension agreement but with an outstanding principal balance (including interest in the principal) at the time of 01 year from the first day of capital withdrawal, unless the borrower has paid the outstanding principal balance within 30 working days from the date of 01 year from the first day of capital withdrawal.
Procedure for loan registration
| Process | Detailled description |
|
Step 1 |
Preparation
Enterprises need to prepare all documents listed above and pay attention to the time recorded on the documents to meet time-limit conditions of loan registration; For application for foreign loans registration which are not guaranteed by the Government: If the borrower has declared loan information on the website before submitting foreign loan registration dossiers: the borrower prints out form from the website, signs and stamps. If the borrower does not declare loan information on the website before submitting dossiers: the borrower completes foreign loan registration form and submits it to the State Bank. For second loan conversion or loan registration, enterprises need to review all loan reporting obligations that enterprises have responsibility to fulfill in the previous time to ensure timely progress of new loan registration. |
| Step 2 | Application submission
Borrowers send 01 dossier for foreign loan registration to competent authority to confirm registration within the time-limit: 30 working days from the date of signing the medium-term or long-term foreign loan agreement. 30 working days from the date of signing the agreement to extend short-term foreign loans to medium-term and long-term for loans that the date of signing the extension agreement within 01 year from the first day of capital withdrawal. 30 working days from the date that the borrower is granted Enterprise registration certificate, License for establishment and operation in accordance with specialized laws, the date of signing the public-private partnership investment contract (PPP contract), the date on which the parties sign the foreign loan agreement to convert the investment preparation amount into loan capital (depending on which day is later), applicable to the foreign loans arising from the conversion of investment preparation amount of the projects that have been granted Investment Registration Certificate into foreign loan capital. 60 working days from the date of 01 year from the first day of capital withdrawal for: Short-term foreign loans converted into medium-term and long-term loans with the date of signing extension agreement after 01 year from the first day of capital withdrawal; and Short-term foreign loans which do not have extension agreement but still have outstanding principal balance at the time of 01 year from the first day of capital withdrawal. |
| Step 3 | Get results
The State Bank shall send written approval or rejection of confirmation of loan registration (clearly state the reason) within the time-limit: 12 working days from the date of receiving all valid dossiers from borrower if the borrower has declared loan information on the website; 15 working days from the date of receiving all valid dossiers from borrower if the borrower does not declared loan information on the website. |
LIST OF DOCUMENTS
To register a foreign loan, enterprises need to prepare the following documents:
- Loan registration form in accordance with regulations.
- Copy of the legal dossiers of the borrower: Establishment permit, Enterprise registration certificate, Cooperative or cooperative federation registration certificate, amended or supplemented documents (if any), or other equivalent documents.
- Copy or original document proving the loan purpose, including one of the following documents depending on the loan purpose to choose the appropriate document: Investment Certificate, Investment Registration Certificate or Approval Decision for investment policy in accordance with investment law; The plan to use foreign loans approved by competent authorities; The plan to restructure the borrower’s foreign loans approved by competent authorities; Report on the use of the initial short-term foreign loans that meet conditions of short-term foreign loans (enclosed with documents such as the plan to use foreign loans of the borrower, the plan to restructure foreign loans)
- Copy of the foreign loan agreement and agreement to extend short-term loans to medium-term or long-term loans (if any) in a foreign language and Vietnamese translation.
- Copy of written guarantee commitment in a foreign language and Vietnamese translation (letter of guarantee, contract of guarantee, or other form of guarantee commitment) if the loan is guaranteed.
- Confirmation from the bank providing account services regarding capital withdrawal and loan repayment (principal and interest) until the time of loan registration. This requirement applies to borrowers who open loan accounts and repay foreign loans at banks providing account services. Specific cases include:
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- In case of foreign loan used to restructure foreign loans: Documents from the bank providing account services of the borrower on capital withdrawal and loan repayment for the foreign loan that will be used to restructure the original foreign loans;
- In case the capital which is transferred to Vietnam by foreign investors has been used to meet investment preparation costs is converted into the medium-term or long-term foreign loan of enterprises with foreign direct investment in accordance with regulations on foreign direct investment in Vietnam: Copy in a foreign language or Vietnamese translation of documents from the bank providing account services of the lender on revenue and expenditure transactions related to the formation of the lender’s loan account;
- In case the loan is medium-term and long-term, short-term loan’s pricipal repayment term is extended: Documents from the bank providing account services of the borrower on capital withdrawal and loan repayment for initial short-term foreign loans;
- Or one of other documents proving capital withdrawal and loan repayment as follows: copy of the audited or reviewed financial statement with information proving that the borrower has received the loan and loan balance until the time of requesting the State Bank to confirm foreign loan registration; copy and Vietnamese translation of written confirmation from foreign commercial bank where the borrower opened and used foreign currency account to withdraw capital and repay the loan; copy and Vietnamese translation of foreign bank’s confirmation letter on the amount of money that the lender paid non-resident beneficiary providing goods and services under the buying and selling goods and services contract with the resident who is the borrower.
- Documents proving legally distributed profits in VND from direct investment of the lender who is a foreign investor contributing capital to borrower and confirmation from the bank providing the account service on the division and transfer of profits to the country of the lender to prove loan disbursement if foreign loans are in VND according to regulations on conditions for foreign loans in VND.
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