To implement investment projects in a stable and effective manner, thereby contributing to the state budget and promoting socio-economic development, fully mobilizing investment capital is extremely necessary. In the case of having to borrow capital from organizations and individuals abroad in the form of self-borrowing and self-payment to ensure financial potential for the project, the investor will have to register for a foreign loan. out there with the competent authority.

1. Conditions for foreign loans

However, first of all, from August 15, 2023, foreign loans in the form of self-borrowing and self-payment will have to comply with a number of conditions specified in Circular No. 08/2023/TT-NHNN as follows :

(i) Foreign loan agreement (Article 9)

– Must be made in writing;

– Must be signed before or on the date of withdrawal of foreign loan capital.

(ii) Foreign loan currency (Article 10)

– Foreign loan currency is foreign currency;

– Foreign loans in Vietnamese Dong in cases where: (a) The borrower is a microfinance institution; (b) The borrower is an FDI enterprise borrowing from profits from direct investment activities in the Vietnamese territory of the lender being a foreign investor contributing capital to the borrower; (c) The borrower withdraws capital and repays the debt in foreign currency and the debt obligation of the loan is determined in Vietnamese Dong.

2. Authority to confirm foreign loan registration

Once the above conditions have been fully met, depending on the loan amount, the borrower is obliged to register the foreign loan with the competent state agency as prescribed in Clause 1, Article 20 of Circular No. 12/2022/TT-NHNN, specifically:

– For loans worth over 10 million USD: register with the Foreign Exchange Management Department (State Bank of Vietnam).

– For loans worth up to 10 million USD: register with the State Bank branch in the province or city where the borrower is headquartered.

(State Bank of Vietnam)

3. Order and procedures for registering foreign loans to implement investment projects

After determining the loan amount and the competent authority confirming the foreign loan registration, the borrower or investor will have to carry out registration procedures according to Articles 15 and 16 of Circular No. 12. /2022/TT-NHNN, summarized through steps:

Step 1: The borrower prepares loan registration documents according to Article 16, including:

• Loan application;
• Copy of the borrower’s legal documents (Establishment license, Business registration certificate or other equivalent documents);
• Foreign language copy and Vietnamese translation of foreign loan agreement and agreement to extend short-term loan to medium or long-term (if any);
• Foreign language copy and Vietnamese translation of the guarantee commitment document in case the loan is guaranteed.
• Documents proving legally distributed profits in Vietnamese Dong from direct investment activities of the lender being a foreign investor contributing capital to the borrower, and confirmation from the supplying bank Account services on the situation of division and repatriation of profits to the lender’s country to prove loan disbursement (in case of foreign loans in Vietnamese Dong).

Step 2: The borrower sends 01 set of documents to the competent authority to confirm loan registration

Within the time limit prescribed in Clause 2, Article 15 of Circular No. 12/2022/TT-NHNN, the borrower is responsible for submitting documents to the competent authority to confirm loan registration, specifically:

– 30 working days from the date of signing the medium and long-term foreign loan agreement; Agreement to extend short-term foreign loans into medium and long-term.

Step 3: The State Bank issues a written confirmation or refusal to confirm the loan registration

After receiving all valid documents from the borrower, the State Bank shall issue a document confirming or refusing to confirm the loan registration (with reasons clearly stated) within the time limit specified in Clause 3, Article 15 Circular No. 12/2022/TT-NHNN:

– 12 working days in case the borrower has declared loan information on the website;

– 15 working days in case the borrower does not declare loan information on the website;

Above are some instructions on procedures for registering medium- and long-term foreign self-borrowing and self-payment loans for foreign investors. For details, please contact contact@trustconsulting.vn or a lawyer at Inco Minh Anh Law Firm for advice.