Limitation of foreign currency transferring abroad in Vietnam

Currently, the need to transfer and bring foreign currency abroad is a huge demand, stemming from many different reasons. Transferring foreign currency is when residents who are organizations or individuals transfer foreign currency abroad through licensed banks. Carrying foreign currency is when residents who are Vietnamese citizens or individuals representing residents who are organizations bring foreign currency cash abroad when leaving the country. Below, Viet An Law will advise on the limitation of foreign currency transferring abroad in Vietnam.

When are residents allowed to transfer or carry foreign currency abroad?

Residents are organizations

Residents are organizations that are allowed to make one-way money transfers abroad for financing, aid, or other purposes as prescribed by the State Bank of Vietnam (Clause 1, Article 7, Decree 70/2014/ND-CP). This regulation is specifically guided in Article 4 of Circular 20/2022/TT-NHNN. Specifically:

Cases of transferring or carrying foreign currency abroad to serve the purposes of funding and aid organizations include:

• Transferring and carrying foreign currency abroad for sponsorship and aid according to commitments and agreements: between the State, Government, local authorities, and foreign countries. The source of sponsorship and aid is the budget or the funding source of the sponsoring and aid organization itself;
• Transferring foreign currency abroad to finance and provide aid to overcome the consequences of natural disasters, epidemics, and wars: Funding and aid sources are voluntary contributions from domestic organizations and individuals and/or funds from the sponsoring and aid organizations themselves;
• Transferring foreign currency abroad to finance programs, funds, and projects established by domestic and/or foreign organizations: to support and encourage development in the fields of culture, education (scholarship funding), and health. The funding source is the funding source of the sponsoring organization itself.

Cases of purchasing and transferring money one-way abroad by organizations for other purposes include:

• Paying rewards to non-residents who are organizations or individuals abroad participating in programs and competitions held in Vietnam by relevant laws. The source of prize money is from non-residents who are organizations or individuals abroad or residents who are organizations;
• One-way remittance abroad for the following purposes from funding sources received by non-resident organizations and individuals abroad:
  • Allocate funding to overseas members to participate in implementing projects and scientific research topics in Vietnam and abroad;
  • Refund funding to implement projects in Vietnam according to commitments and agreements with foreign parties.

Residents are Vietnamese citizens

Under Clause 1, Article 7 of Decree 70/2014/ND-CP, residents who are Vietnamese citizens are allowed to transfer and carry foreign currency abroad for the following purposes:

• Studying, and receiving medical treatment abroad;
• Business trips, tourism, and visits abroad;
• Paying state fees to foreign countries;
• Providing allowances for relatives living abroad;
• Transferring inheritance money to beneficiaries living abroad;
• Transferring money in case of settling abroad;
• One-way transfer of money for other legitimate needs.

This regulation helps prevent illegal foreign exchange transactions and ensures that foreign currency is used for its intended purpose.

Note: Foreign currency sources transferred and brought abroad in this case include:

• Foreign currency owned by individuals (foreign currency in payment accounts, term deposits in foreign currency, savings deposits in foreign currency, foreign currency kept by themselves).
• Foreign currency purchased from authorized banks.

Non-residents and residents are foreigners

Pursuant to Clause 3, Article 7 of Decree 70/2014/ND-CP, non-residents and residents who are foreigners with foreign currency in their accounts or legal sources of foreign currency income may transfer or bring it abroad; in case of legal sources of income in VND, they may buy foreign currency to transfer or bring it abroad.

Regulations on limitation of foreign currency transferring abroad in Vietnam for institutional residents

The amount of foreign currency purchased, transferred, or carried abroad by a resident organization is based on the amount stated on relevant documents and vouchers, except for the following case in Clause 2, Article 8 of Circular 20/2022/TT-NHNN:

The amount of foreign currency purchased and transferred abroad in case of transferring foreign currency abroad to finance programs, funds, and projects established by domestic and/or foreign organizations to support and encourage development in the fields of culture, education (scholarship funding), and health:

• Based on the amount recorded on relevant documents and papers; and
• Not exceeding 50,000 USD (Fifty thousand US dollars) or other foreign currencies with equivalent value in one remittance.

The regulation limiting the maximum foreign currency amount of 50,000 USD (or equivalent) in a single remittance to finance humanitarian or development programs, funds, and projects demonstrates the balance between foreign exchange management and promoting support and development activities.

Regulations on limitation of foreign currency transferring abroad in Vietnam for Vietnamese citizens

Under Article 13 of Circular 20/2022/TT-NHNN, the amount of foreign currency transferred or carried abroad by residents who are Vietnamese citizens is as follows:

Foreign currency transferred and carried abroad for study and medical purposes

• The foreign currency limit in this case is based on the costs in the foreign party’s notification. This ensures transparency and specificity in determining the required foreign currency level, avoiding the situation of purchasing foreign currency exceeding actual needs.
• In case there is no foreign notification on living expenses and other related expenses to study and medical treatment, in addition to tuition fees, hospital fees, and other expenses notified by the foreign side, banks are allowed to decide on the level of transfer and carry additional foreign currency for the above purposes according to the regulations on the limit to provide allowances to relatives living abroad.

Foreign currency is transferred and carried abroad for business trips, tourism, and visits

This limitation is determined by the bank based on the reasonable needs of the individual. Allowing the bank to assess the reasonable needs of the individual to decide on the appropriate foreign currency level helps ensure flexibility while minimizing the risks of foreign currency abuse.

Foreign currency is transferred abroad to pay state fees to foreign countries.

Based on the costs at the foreign party’s notification.

Foreign currency is transferred abroad to provide allowances to relatives living abroad.

• Banks are allowed to decide on the amount of foreign currency to be purchased and transferred based on the reasonable needs of individuals and under the purpose of supporting living expenses and stabilizing the lives of beneficiaries abroad.
• The amount of foreign currency purchased or transferred to a beneficiary abroad in a year must not exceed the average income per capita at current prices of the country where the beneficiary is living.
• Annually, the bank is allowed to update data on average income per capita at current prices of countries published at the most recent time on the World Bank’s website to serve as a basis for determining the level of foreign currency purchased and transferred to provide allowances to relatives abroad;

Note: Buying and transferring foreign currency abroad for the purpose of providing allowances to relatives does not apply to cases where relatives are studying, receiving medical treatment, working, traveling, or visiting abroad. This is to ensure that inappropriate “purpose conversion” is avoided.

Foreign currency is purchased and transferred abroad to transfer inheritance money to beneficiaries abroad

Based on the value of the assets that the heir is entitled to under the provisions of the law on inheritance.

Foreign currency purchased and transferred abroad for remittance purposes in case of settlement.

• Based on the value of the immigrant’s assets formed in Vietnam before obtaining foreign nationality or before being allowed to reside abroad for settlement purposes under the regulations of the host country.
• In case of transferring money to pay for expenses related to procedures for applying for settlement abroad (excluding investment value to be allowed to have nationality or settlement abroad), the amount of foreign currency purchased and transferred abroad is based on the expenses in the foreign side’s notice.

The limitation of foreign currency transferring abroad in Vietnam reflects the balance between foreign exchange management requirements and the legitimate needs of individuals and organizations. If you have any related questions or need legal advice, please contact Viet An Law for the best advice and support!