This is the content of the Circular No. 12/2014/TT-NHNN dated March 31, 2014 of the State Bank of Vietnam regulating on conditions for foreign loans of enterprises without government guarantee.
In particular, this Circular stipulates that currency for foreign loan must be in foreign currency. However, it is possible to get the foreign loan in Vietnam dong in the cases that the borrower is macro-financial organizations; the borrowers are foreign invested enterprises borrowing from the profit sources in Vietnam dong from the direct investment activity of the lender being the foreign investors that contribute capital at the borrower; and other cases when being considered and approved by the State Bank Governor based on the current situation and necessity of each case.
Besides, the foreign loan agreement must be signed in writing before the disbursement the loan and be in accordance with the Vietnamese law and if credit institutions, foreign bank branches borrow short-term foreign loan, the agreement for foreign loan must be signed in writing before or at the time of disbursement of the loan.
At the same time, the borrowers use foreign loan to meet the production and business scheme, investment project using foreign loan of the subjects such as the borrower; the enterprises that the borrowers contribute direct investment capital (only applied for cases borrowing medium and long-term foreign loan). In this case, the limit for borrowing rate of the borrower over the total borrowing rate must not exceed the contributed capital rate of the borrower in the enterprise that the borrower contributes capital. And the production and business scheme, investment project using foreign loan as stipulated under this Clause must be approved by competent agencies according to the Vietnamese law; and it must be accordance with the scope of establishment license, enterprise registration certificate, business registration certificate, investment certificate, cooperatives and union cooperatives registration certificate of the borrower or enterprise that the borrower contributes the direct investment capital.
This Circular takes effect on May 15, 2014 and annuls the regulations under Chapter II of the Circular No. 09/2004/TT-NHNN dated December 21, 2004
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