The time limit for registration of foreign loans is a critical aspect of the country’s financial regulations. By delving into this crucial aspect of foreign borrowing in Vietnam, readers will gain valuable insights into the country’s financial landscape and the importance of adhering to legal procedures. Viet An Law hereby presents the regulatory framework surrounding the time limit for registration of foreign loans in Vietnam.
Application dossier for registration of foreign loans in Vietnam
Except for loans arising from goods import contract with deferred payment, the application file for foreign loan normally includes the following specific documents:
- Application for registration of foreign loans (made according to the form in Appendix 01 attached to Circular 03/2016/TT-NHNN);
- A copy (certified by the Borrower) of the Borrower and the Borrower’s legal documents in case the Borrower is not the Borrower;
- A copy (certified by the Borrower) or the original document proving the loan purpose;
- A copy and Vietnamese translation (certified by the Borrower) of the foreign loan contract or foreign loan agreement and the agreement to extend the short-term loan to medium or long-term (if any); or capital withdrawal document enclosed with the framework agreement;
- Copy and Vietnamese translation (certified by the Borrower) of the guarantee commitment (letter of guarantee, guarantee contract or other form of guarantee commitment) in case the loan is guaranteed;
- A copy (certified by the borrower) of the competent authority’s document approving the foreign loan in accordance with the law on assignment and decentralization of the rights, responsibilities and obligations of the owner State-owned enterprises (SOEs) and state capital invested in enterprises (SOEs) for borrowers being state-owned enterprises, unless the borrower is a commercial bank in which 100% of charter capital is held by the State.
- Report on compliance with regulations of the State Bank on credit extension limits and prudential ratios in operations of credit institutions, foreign bank branches at the end of the latest month before the date of signing the foreign loan agreement and the document proving the non-compliance with the provisions of law on credit limit and safety ratios approved by the Prime Minister or the Governor of the State Bank approve in accordance with the provisions of law (if any) for the borrower being a credit institution or foreign bank branch;
- Certification of the account service provider (in some cases specified in Clause 8 Article 14 of Circular 03/2016/TT-NHNN);
- Documents and documents proving that profits are legally distributed in Vietnam dong from direct investment by the lender being a foreign investor contributing capital to the Borrower and certification of the service-providing bank account on the distribution and repatriation of profits of the lender to prove the loan disbursement in case of foreign loans in Vietnam dong according to current regulations on conditions for foreign loans in Vietnam dong;
- A written explanation of the need for a foreign loan in Vietnam dong for the case of a foreign loan in Vietnam dong must be permitted by the Governor of the State Bank in accordance with the State Bank’s current regulations on conditions for foreign loans in Vietnamese Dong.
Time limit for registration of foreign loans in Vietnam
After preparing the above dossier, borrowers must send dossiers within 30 (thirty) days from:
- The date of signing the medium and long-term foreign loan agreement or the date of signing the guarantee written in case 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 signed framework agreement and before the capital withdrawal;
For example: If a foreign long-term capital loan contract was signed on April 1st 2021, the deadline for submitting a foreign loan registration dossier is within 30 days from April 1st 2021.
- The date of signing the agreement to extend short-term foreign loans into medium and long-term for short-term loans with extended principal repayment period whose total term is over 01 (one) year;
For example: a 07-month short-term capital loan contract was signed on April 1st 2021, and then parties were signed an agreement to extend the loan period for another 11 months on September 1st 2021, the deadline for submitting a foreign loan registration dossier is within 30 days from September 1st 2021.
- The date the borrower is granted the Certificate of Business Registration, the License for establishment and operation in accordance with specialized laws, the date of signing the investment contract under the mode of public-private partnership (PPP contract), the date the parties sign a foreign loan agreement to convert the pre-investment amount into a loan (whichever is later), applies to foreign loans arising from the conversion of the amount of the foreign investment preparation capital that has been granted with the investment certificate
Borrowers must send documents within 60 (sixty) days from the full day of 01 (one) year from the date of first capital withdrawal for:
- Short-term loans are extended the principal repayment period, the total term of which is over 01 year, and the date of signing the extension agreement is 01 year from the date of first capital withdrawal.
- Short-term loans without an extension agreement but with outstanding principal balance (including principally entered) at the full date of 01 year from the date of first capital withdrawal, unless the borrower completes payment of the above-said principal balance within 30 working days from the date of first capital withdrawal.
For example: a 12-month short-term loan contract was signed on January 1st 2021, the loan is received in account on January 1st 2021, parties do not have an agreement to extend the loan, and from January 1st 2021 to January 10th 2021, the borrower has not completed the loan repayment, the deadline for submitting a foreign loan registration dossier is within 60 days from January 1st 2022.
Time limit for processing dossiers of the State Bank
The State Bank shall issue a written confirmation or refusal to confirm the loan registration (clearly stating the reason) within the time limit:
- 12 working days from the date of receiving the borrower’s complete and valid dossier in case the borrower has declared loan information on the Website;
- 15 working days from the date of receipt of the borrower’s complete and valid dossier in case the borrower fails to declare loan information on the Website.
Clients wishing to consult on foreign loan contracts, register for foreign loans with the State Bank, please contact Viet An Law Firm for the best support!