On May 17, 2017, the State Bank of Vietnam issued the Circular No. 02/2017/TT-NHNN stipulating on factoring activity of credit institutions, foreign banks’ branches.
The Circular prescribing that for customers being residents, factoring unit shall consider and decide on factoring when customers being legal status that has legal personality of a natural person; being individuals from 18 years old or more that has legal capacity of a natural person in accordance with the law or from 15 years old to 18 years old that are not lost or limited legal capacity of a natural person; demand on factoring to use advanced amounts for legal purposes and serve for business production; having financial capacity to pay for debts and having feasible plans to pay for debts.
Particularly, for customers being non-residents, factoring unit shall consider and decide on factoring when customers being organizations; if customers are the importing party that meets conditions: customers being enterprises established and operated overseas that capital is contributed by Vietnamese enterprises under the foreign direct investment; 100% value of receivables that is guaranteed for payment by the third party and deposited by customers, guaranteed by customers’ deposit at the factoring unit.
On interests and fees in the factoring activity, interests and fees in the factoring activity shall be decided by the factoring unit and customers. When it is due, debts and interests are not paid yet or not fully paid as agreed; customers shall pay interests as interests based on factoring interest rate as agreed equivalent to the time of factoring that is not paid yet; if customers fail to pay interests on time as stipulated under Point a of this Clause, customers shall pay for late payment according to interest rate that the factoring unit and customers have agreed but it should not exceed 10%/year on amount of interests that payment is late equivalent to late period; if factoring debts are transferred into overdue debts, customers shall have to pay interests over overdue factoring debts equivalent to late period of payment, interest rate applied should not exceed 150% of factoring interest at the time of transferring overdue debt.
This Circular takes effect on September 30, 2017.
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