Bản dịch văn bản 02/TT-NH7
Circular 02/TT-NH7
Cơ quan ban hành: Ngân hàng Nhà nước Việt Nam
Ngày ban hành: 1997-06-28

THE STATE BANK OF VIETNAM CIRCULAR No. 02/TT-NH7 OF JUNE 28, 1997 GUIDING THE MANAGEMENT OF FOREIGN EXCHANGE AT FOREIGN INVESTED ENTERPRISES AND FOREIGN PARTIES TO BUSINESS COOPERATION CONTRACTS On February 18, 1997, the Government issued Decree No. 12-CP detailing the implementation of the Law on Foreign Investment in Vietnam, the State Bank of Vietnam hereby provides the following guidance on the management of foreign exchange at foreign invested enterprises and foreign parties to business cooperation contracts: 1. GENERAL PROVISIONS 1. This Circular shall apply to: Foreign organizations and individuals licensed for production and business activities in Vietnam under the Law on Foreign Investment in Vietnam, including: - Enterprises with 100 per cent foreign invested capital and joint ventures with foreign partners; hereafter referred to as foreign invested enterprises; - Foreign parties to business cooperation contracts (BCC), hereafter referred to as foreign business cooperation parties; - Foreigners working for foreign invested enterprises and BCC projects. International credit activities, activities of Vietnam-based branches of foreign companies, other indirect investment and commercial organizations related to foreign exchange shall not come under the scope of regulation of this Circular. 2. Foreign invested enterprises, foreign business cooperation parties and foreigners working for foreign invested enterprises and BCC projects, when carrying out transactions relating to foreign exchange at the banks operating and licensed to trade in foreign currencies in Vietnam, including State-owned commercial banks, investment and development banks, branches of foreign banks, joint venture banks with foreign partners and stock commercial banks, shall have to abide by the provisions of this Circular and other Vietnam’s current regulations on foreign exchange management. II. OPENING AND USING ACCOUNTS AT THE BANKS OPERATING IN VIETNAM 3. A foreign invested enterprise shall have to open a special account for foreign currency(ies) at a bank licensed to trade in foreign currencies in the locality where the enterprise has its head office. This account shall be used for the following capital transfer transactions: - The foreign investor’s investment capital brought into and out of Vietnam; - Principal of foreign loans brought into and out of Vietnam; - Interests and fees of foreign loans brought out of Vietnam for the payment of foreign debts; - Profits and other lawful incomes of the foreign investor transferred out of Vietnam; - The enterprise’s capital amounts in foreign currency(ies) withdrawn from this account and put into a deposit account (for definite or indefinite terms); - The enterprise’s various capital amounts in foreign currency(ies) withdrawn from a deposit account and put into this account Within 10 (ten) days from the date the special account for foreign currency(ies) is opened, the foreign invested enterprise shall have to register it with the State Bank’s provincial/municipal branch of the same locality. If the banks licensed to trade in foreign currencies in a locality cannot meet the banking service requirements of clients, the enterprise may open the special account for foreign currencies at a bank in another locality if it is so approved by the State Bank’s provincial/municipal branch in the locality where the enterprise has its head office and the enterprise shall have to register such account with the State Bank’s provincial/municipal branch in the locality where the enterprise opens such account. 4. Apart from the special account for foreign currency(ies), a foreign invested enterprise may open accounts for foreign currencies and for Vietnam Dong at various banks licensed to operate in Vietnam. 5. For foreign business cooperation parties directly engaged in production and business activities in Vietnam, the opening and use of accounts at the banks licensed to operate in Vietnam shall comply with Points 3 and 4 of this Circular. 6. All revenues and expenditures in foreign currencies and Vietnam Dong of foreign invested enterprises and foreign business cooperation parties shall be effected through their bank accounts and comply with Vietnam’s current regulations on the management of non-cash payment in foreign exchange and Vietnam Dong. III. OPENING AND USE OF FOREIGN CURRENCY ACCOUNTS ABROAD 7. When the need arises to open a foreign currency account overseas, the State Bank of Vietnam may consider and allow a foreign invested enterprise to open an account to provide loans in foreign currencies on the basis of the following conditions: - The foreign lender’s request to open an account abroad for loan receiving and debt payment; - Each capital borrowing contract shall have a minimum value of 3,000,000 USD (three million US dollars) or the equivalent in other foreign currencies; - The enterprise borrows mid-term and long-term foreign loans for capital construction investment, in-depth investment or expansion of production; - The contract for borrowing foreign loans has been approved by the State Bank of Vietnam. 8. Depending on the nature of its operation, an account opened abroad may be used for one or a number of the following transactions: - Receiving loans in foreign currency(ies) from foreign lenders; - Remitting part of the enterprise’ turnover which does not exceed the total amount of the principals of due loans and interests and fees thereon; - Paying the principals of due loans, interests and fees thereon to foreign lenders; - Paying foreign goods suppliers and service providers; 9. A foreign invested enterprise that wishes to open an overseas loan account shall send to the State Bank of Vietnam a set of dossier including: - An application for opening an overseas loan account; - A paper introducing the full name, title and signature of the account holder or the authorized person. For a joint venture enterprise, a copy of its Managing Board’s written approval of the account holder or the authorized person is required; - The capital borrowing contracts already signed with the lender. Within 15 (fifteen) days from the date of receipt of the full and valid dossier, the State Bank of Vietnam shall notify the enterprise of its decision on whether the opening of such account is approved or not. 10. The loan account opened abroad shall terminate when the contract for borrowing foreign loans expires. Upon the termination of the loan account, if the enterprise has not paid up its debts and wishes to maintain the operation of this account; prior approval of the State Bank of Vietnam is required. 11. The State Bank of Vietnam shall withdraw the permit already granted and suspend the operation of a loan account in the following cases: - The enterprise seriously violates the provisions of the Vietnam State Bank’s permit to open the account; - Within six months after the enterprise is granted such permit by the State Bank of Vietnam it fails to open the account or the account does yet not operate. 12. If foreign invested enterprises that carry out business activities in the aviation, maritime, post, insurance and tourist services or are permitted to open representative offices abroad need to open foreign currency accounts abroad for clearing payment according to international practices, on-the-spot revenues and expenditures or operating expenses of their representative offices, the State Bank of Vietnam shall consider such need on the basis of Vietnam’s current regulations on foreign exchange management. IV. BALANCING OF FOREIGN CURRENCIES 13. Foreign invested enterprises and foreign business cooperation parties shall have to meet their own needs in foreign currencies for their operations, except for the cases specified in Point 14 of this Circular. Within 12 months from the date a foreign invested enterprise or a foreign business cooperation party sells foreign currency(ies) to the banks licensed to trade in foreign currencies, if it has a legitimate need, the State Bank of Vietnam shall permit it to buy back all the amount of foreign currency(ies) it sold to such banks. 14. The State Bank of Vietnam shall guarantee that foreign invested enterprises and foreign business cooperation parties that manufacture essential import substitutes and implement projects in building infrastructure works (on the list announced by the Ministry of Planning and Investment) and a number of especially important projects can convert Vietnamese currency into foreign currency(ies) to meet their justified needs. The above-said objects are allowed to directly contact the banks licensed to trade in foreign currencies to buy the necessary amounts of foreign currencies under Vietnam’s current regulations on foreign exchange management 15. Depending on the concrete situation of the international payment balance in each period, the objectives of reducing the deficit of current account payment and increasing the national foreign currency reserves, on the foreign exchange rate policy and priority needs of foreign currencies... the State Bank of Vietnam may consider meeting part of the need of foreign currencies of foreign invested enterprises and foreign business cooperation parties which do not fall under the category stated in Point 14 of this Circular but face difficulties in balancing their foreign currencies. When considering whether to allow or not a foreign invested enterprise or a foreign business cooperation party to buy foreign currency(ies) at banks licensed to trade in foreign currencies, the State Bank of Vietnam shall base itself on: - The provisions of the investment license on the product consumption market and the task of balancing foreign currencies; - The actual situation of business activities of the enterprise or foreign business cooperation party, i.e. duration of production and business activities in Vietnam; possibility of balancing the need in foreign currencies; source of revenues in Vietnam Dong; - The enterprise’s or foreign business cooperation party’s actual need in foreign currencies; - The Bank’s ability of meeting the need in foreign currencies; - The fields and localities where investment is encouraged by the State of Vietnam. The dossier of purchase of foreign currency(ies) submitted to the State Bank of Vietnam includes: - The application for purchase of foreign currency(ies); - A notarized copy of the investment license; - A report on revenues and expenditures in foreign currency(ies) in the plan year; - A notarized copy of the import-export permit issued by the Ministry of Trade (if the enterprise applies for the purchase of foreign currency(ies) in service of import); - A copy of the schedule on payment of principal, interest and fee set in the foreign currency borrowing contracts (if the enterprise or foreign business cooperation buys foreign currency(ies) to pay domestic and foreign debts); - A copy of the annual financial statement certified by an audit agency and a copy of the record of the annual profit distribution with the certification by the tax office that all the financial obligations have been fulfilled (if the enterprise or foreign business cooperation party buys foreign currencies to remit profits abroad); - A copy of the report on the liquidation of the enterprise or foreign business cooperation party (if the enterprise or foreign business cooperation buys foreign currency(ies) to transfer abroad the prescribed capital or the foreign investor’s capital for the performance of the business cooperation contract); - A copy of the service contract signed with a foreign partner (if the enterprise or foreign business cooperation party buys foreign currencies to pay service charges to the foreign partner); Within 10 (ten) days from the receipt of the full and valid dossier, the State Bank of Vietnam shall notify the foreign invested enterprise or foreign business cooperation party of its decision to permit or not to permit the purchase of foreign currency(ies). V. BRINGING capital INTO AND OUT OF VIETNAM, REMITTING PROFITS ABROAD 16. A foreign invested enterprise or a foreign business cooperation party shall contribute investment capital according to the capital contribution timetable written in the joint venture contract or the enterprise’s statute or the business cooperation contract already approved by the competent agency and suitable to the economic-technical report. 17. The transfer of foreign currencies into or out of Vietnam: The transfer of prescribed capital, reinvested capital, profits of the foreign investor, principals, interests and fees of foreign loans shall be effected through the special account for foreign currency(ies) already registered by the foreign invested enterprise or foreign business cooperation party with a provincial/municipal branch of the State Bank. 17.1. Remitting profits abroad: Upon the end of each fiscal year, the foreign investor investing in Vietnam may remit abroad his/her profits. The bank shall base itself on the following papers: - The financial statement certified by an audit agency; - The record of the Managing Board on the profit distribution (for joint venture enterprises) - The certification by a competent tax office that the foreign invested enterprise or the foreign business cooperation party has fulfilled all the financial obligations toward the State; - The report on the liquidation of the enterprise or the business cooperation contract (BCC) approved by the investment license granting agency (if the foreign investor remits profits abroad after the enterprise is dissolved or the contract terminates). When a foreign invested enterprise or a business cooperation contract ceases its operation, the foreign investor shall be entitled to transfer abroad his/her profits after completing the liquidation procedure without having to wait until the end of the fiscal year. 17.2. Transferring abroad the prescribed capital and the reinvested capital: When a foreign invested enterprise or the foreign business cooperation party ceases its operation, the foreign party shall be entitled to transfer abroad the prescribed capital and the reinvested capital after paying all debts and fulfilling all the financial obligations toward the State of Vietnam, and the bank shall base itself on the following papers: - The liquidation record already approved by the investment license granting agency; - The report on the fulfillment of all financial obligations toward the State of Vietnam (certified by a competent tax office); In cases where the amount of money transferred abroad exceeds the initial prescribed capital brought into Vietnam plus the reinvested capital, the excess amount can be transferred abroad only when there is a certification by the investment license granting agency and in accordance with Point 17.1 of this Circular. 17.3. The transfer of principals, interests and fees of foreign loans by a foreign invested enterprise shall be effected under Vietnam’s current regulations on the management of foreign borrowings and debt payment by enterprises 18. Foreigners working for foreign invested enterprises and business cooperation contracts (BCC) are entitled to remit abroad their wages and other lawful incomes in foreign currency(ies) after they have paid fully the income tax and subtracted reasonable expenses in Vietnam. VI. EXCHANGE RATE 19. The conversion of foreign currencies and Vietnam Dong for capital contribution shall be made at the exchange rate announced by the State Bank of Vietnam at the time of conversion. The foreign currency purchase and sale relating to the business activities of foreign invested enterprises and foreign business cooperation parties shall be effected at the trading exchange rate at the bank licensed to trade in foreign currencies at the time of transaction. VII. OTHER PROVISIONS 20. The performance of a contract to borrow foreign capital and the assurance of foreign loans for foreign invested enterprises shall comply with Vietnam’s current regulations on management of foreign borrowings and debt payment by enterprises. 21. The payment of wages, bonuses and allowances, the opening and use of foreign currency accounts of foreigners working for foreign invested enterprises and business cooperation contracts (BCC) shall comply with Vietnam’s current regulations on foreign exchange management. VIII. INFORMATION AND REPORTING REGIME AND HANDLING OF VIOLATIONS 22. Annually, on the fifth day of the first month of the following year at the latest, a foreign invested enterprise or a foreign business cooperation party shall have to report on the situation of the implementation of the investment capital to the State Bank’s provincial/municipal branch in the same locality 23. Every six months, on the fifth day of the seven month at the latest, a foreign invested enterprise permitted to open abroad a loan account shall have to report on the situation of the operation of the account to the State Bank of Vietnam, the Department for Foreign Exchange Management. 24. Every quarter, on the fifth day of the first month of the following quarter at the latest, the banks licensed to trade in foreign currencies shall have to report to the State Bank’s provincial/municipal branch of the same locality: - The situation of the operation of the special accounts for foreign currencies opened at these banks by the foreign invested enterprises and foreign business cooperation parties; - The situation of the sale of foreign currencies to the foreign invested enterprises and the foreign business cooperation parties. 25. Reporting by the State Bank’s provincial/municipal branches to the State Bank of Vietnam (the Department for Foreign Exchange Management) - Every quarter, on the tenth day of the first month of the following quarter at the latest, each provincial/municipal branch of the State Bank shall report the list of registered special accounts for foreign currencies and the situation of their operation, which have been registered by the foreign invested enterprises and are currently open in its locality; - Every quarter, on the tenth day of the first month of the following quarter at the latest, each provincial/municipal branch of the State Bank shall report on the situation of the sale of foreign currencies by the banks licensed to trade in foreign currencies in its locality to the foreign invested enterprises and foreign business cooperation parties. - Annually, on the tenth day of the first month of the following year at the latest, each provincial/municipal branch of the State Bank shall report on the situation of the execution of investment capital by foreign invested enterprises and foreign business cooperation parties. 26. Foreign invested enterprises, foreign business cooperation parties and foreigners working for foreign invested enterprises and business cooperation contracts (BCC) that violate the provisions of this Circular may, depending on the seriousness of the violation, be subject to administrative sanctions in accordance with Decree No. 18-CP of February 24, 1997 of the Government on handling administrative violations in the banking business and be sanctioned in accordance with other provisions of law. IX. IMPLEMENTATION PROVISIONS 27. The Heads of the Departments, the Head of the Governor’s Office, the Director of the Inspectorate of the State Bank of Vietnam, the Directors of the provincial and municipal branches of the State Bank, the General Directors (Directors) of the banks licensed to operate in Vietnam, the General Directors (Directors) of the foreign invested enterprises and representatives of the foreign business cooperation parties shall, within the scope of their functions, have to organize the guidance and implementation of this Circular. 28. The Ministries, the agencies attached to the Government, the People’s Committees of the provinces and cities shall, according to their functions and tasks, coordinate their activities in implementing this Circular. 29. This Circular replaces Circular No. 06-TT/NN7 of September 18, 1993 of the State Bank of Vietnam and takes effect 15 days after its signing. For the Governor of the State Bank Deputy Governor LE DUC THUY