On 30/9/2022, the State Bank of Vietnam (“SBV”) issued Circular No. 12/2022/TT-NHNN (“Circular 12”) guiding foreign exchange administration for foreign borrowing and foreign debt repayment of enterprises, replacing Circulars No. 03/2016/TT-NHNN dated February 26, 2016 (amended and supplemented by: Circular 05/2016/TT-NHNN dated April 15, 2016 and Circular 05/2017/TT-NHNN dated June 30, 2017 (hereinafter generally referred to as “Circular 03”).
Basically, Circular 12 inherits the provisions of Circular 03 related to the procedures for registration and registration for changes of enterprises’ foreign loans which are not guaranteed by the Government; the opening and use of foreign borrowing and foreign debt repayment accounts at authorized credit institutions located within the territory of Vietnam; the fund withdrawal, debt repayment and other fund transfer transactions in relation to arrangement of foreign loans; the foreign exchange administration in respect of transactions relating to guarantee for foreign loans; the provision, use and administration of information posted on the website for administration of foreign borrowing and repayment of foreign loans which are not guaranteed by the Government (hereinafter referred to as website); and the mechanism for making statistical reports on enterprises’ foreign borrowing and repayment of foreign loans which are not guaranteed by the Government.
However, Circular 12 has several notable changes compared to Circular 03 specifically as follows:
- For short-term loans which are not covered by any loan renewal contract but remain the outstanding principal (including interest compounded into principal) owed on the anniversary of the date of first fund withdrawal in a full 01 (one) calendar year, unless the case that borrowers have already fulfilled their debt obligations within 30 (thirty) days (it was 10 days under Circular 03) after the anniversary of the date of first fund withdrawal in a full 01 (one) year.
- Supplement cases not subject to loan change registration
Article 17.2 of Circular 12 stipulates that borrowers are only required to notify loan changes on website without having to carry out loan change registration procedures in the following cases:
- Change the plan for capital withdrawal, debt repayment and fee transfer within 10 (ten) working days compared to the plan approved by the SBV (that was 10 (ten) calendar days under Circular 03).
- Change the interest and fee payment plan of the foreign loan compared to the plan approved by the SBV in the written confirmation of registration/change registration of the foreign loan without changing the determination of interest and fees in the foreign loan agreement;
- Change the amount of capital withdrawal, principal repayment, interest and fees within 100 currency units of the foreign loan currency compared to the amount stated in the written confirmation of registration/change registration of foreign loan;
- Change the actual amount of withdrawal or principal repayment of a particular period less than the amount stated in the plan of capital withdrawal and repayment on the written confirmation of registration /change registration of foreign loan. Enterprises shall register to change the amount of capital withdrawal and remaining debt repayment before making this withdrawal and repayment.
- Besides remaining to allow borrowers to use direct investment capital accounts to carry out collection and spending transactions related to foreign loans, Circular 12 allowed borrowers who are foreign direct investment enterprises to open other accounts to make foreign loans at the bank where the borrowers open a direct investment capital account if the borrowed currency is not the currency of the direct investment capital account.
Circular 12 shall take effect from 15/11/2022.
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