ENTERPRISES CAN ONLY TRANSFER MONEY ABROAD FOR THE PURPOSE OF CULTURAL, EDUCATIONAL AND HEALTHCARE FUNDING WITH A MAXIMUM AMOUNT OF 50.000 USD/TIME

On December 30, 2022, the State Bank of Vietnam issued Circular No. 20/2022/TT-NHNN on guidelines for one-way money transfer from vietnam to abroad and payment, money transfer for other current transactions of residents being organizations and individuals ("Circular 20").

Circular 20 clarifies regulations on one-way remittance abroad from Vietnam in Decree 70/2014/ND-CP ("Decree 70") by instructing cases where foreign currency purchase and remittance is allowed; foreign currency sources; foreign currency amount and procedures to buy or transfer it abroad. At the same time, Circular 20 also provided regulations on payment and remittance for other current transactions, in order to facilitate organizations and individuals in transaction performance. Accordingly, Circular 20 has notable new contents as follows:

Cases where foreign currency is allowed to be purchased, transferred or brought abroad

For organization residents, cases of purchasing, transferring or bringing foreign currency abroad shall rely on the purpose of money transfer, specifically:

1. For the purpose of funding and aid: (i) under commitments and agreements between the State, Government, local authorities and foreign countries; or (ii) to provide finance and aids in mitigating the impacts of natural disasters, epidemics and wars; or (iii) to finance programs, funds and projects established by domestic and/or overseas organizations for the purpose of supporting and encouraging development in the fields of: culture, education (scholarship funding) and healthcare.
2. For other purposes: (i) Award prize money to non-residents being overseas organizations and individuals participating in programs and contests held in Vietnam; or (ii) to allocate funding to foreign members to participate in scientific research projects; or (iii) to refund sponsorships for projects in Vietnam according to commitments and agreements with foreign parties.

For residents who are Vietnamese citizens, cases of purchasing, transferring or bringing foreign currency abroad are stipulated in Clause 2, Article 7 of Decree 70.

The amount of foreign currency to be purchased, transferred and brought abroad

For residents which are organizations, the limit amount of foreign currency relies on the amount stated on relevant documents. Particularly in cases of transferring foreign currency abroad to finance programs, funds or projects for the purpose of supporting and encouraging the development in the fields of culture, education and healthcare, Circular 20 specifies that the amount could not exceed 50,000 USD (or other foreign currencies of equivalent value)/transfer.

For residents who are Vietnamese citizens, the limit amount of foreign currency relies on practical and reasonable needs for each spending purpose. Compared to the previous regulations in Circular 20/2011/TT-NHNN ("Circular 20/2011")[1], this regulation is more flexible to meet the needs of individuals in a case-by-case basis.

Regulations on payment and remittance abroad for other current transactions

Given the needs of banks for specific instructions to facilitate overseas payment and remittance activities, Circular 20 specifies that "other current transactions" include:

1. Payments and remittances related to temporary import and re-export; temporary export and re-import; transit; commercial intermediary activities; processing/ordering goods manufactured overseas and other activities related for/to international sale of goods in accordance with the law on trade;
2. Payment and remittance related to insurance;
3. Payment and remittance under a legally enforceable judgment or award of a court or arbitration; or a decision of competent authorities of Vietnam;
4. Payment and remittance related to fines and compensation for property damage or injury that have not been covered by insurance.

Circular 20 shall take effect from February 15, 2023, completely replacing Circular 20/2011. Simultaneously, Circular 20 also amends, supplements and abolishes a number of articles in several circulars issued by the State Bank on foreign currency transactions related to Vietnam's foreign exchange management.

[1] Article 5 of Circular 20/2011/TT-NHNN allows a maximum amount of 100 USD/person/day or other foreign currencies of equivalent value during the oversea residential period of 10 days; In addition, credit institutions may sell foreign currencies exceeding this limit depending on their ability to self-balance the sources of foreign currency in cash.