THE STATE BANK
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SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
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No: 05/2006/TT-NHNN
Hanoi, July 25, 2006
 
CIRCULAR
GUIDING SOME PROVISIONS OF THE GOVERNMENT'S DECREE NO. 16/2001/ND-CP OF MAY 2, 2001, AND DECREE NO. 65/2005/ND-CP OF MAY 19, 2005, ON FINANCIAL LEASING ACTIVITIES AND FINANCIAL-LEASING ENTRUSTMENT SERVICES
Pursuant to Article 42 of the Government's Decree No. 16/2001/ND-CP of May 2, 2001, on organization and operation of financial leasing companies and Article 3 of the Government's Decree No. 65/2005/ND-CP of May 19, 2005, amending and supplementing a number of articles of the Government's Decree No. 16/2001/ND-CP of May 2, 2001, the State Bank of Vietnam hereby guides a number of provisions of these Decrees on financial leasing activities and financial-leasing entrustment services as follows:
I. FINANCIAL LEASING ACTIVITIES
1. Financial leasing companies shall provide financial leasing to financial lessees being organizations and individuals operating in Vietnam (hereinafter referred to as lessees) that wish to hire machines, equipment, means of transport and other movables for the execution of investment projects on production, business or service provision or investment projects in service of daily life in the country.
This Circular does not provide guidance on financial leasing companies that conduct offshore financial leasing activities.
2. Financial leasing conditions
2.1. Financial leasing companies must be established and conduct financial leasing activities under the Law on Credit Institutions.
2.2. The lessees shall fully satisfy the following conditions:
a/ Having civil legal capacity and civil act capacity according to the provisions of law:
- For lessees being Vietnamese organizations and individuals: Organizations shall have civil legal capacity; individuals, owners of private enterprises, representatives of households or cooperative groups shall have civil legal capacity and civil act capacity.
- For lessees being foreign organizations and individuals: Organizations shall have civil legal capacity according to the law of the Socialist Republic of Vietnam; individuals shall have civil legal capacity and civil act capacity according to the law of the Socialist Republic of Vietnam, unless otherwise provided for by the law of the Socialist Republic of Vietnam. Bases for the application of laws to these organizations and individuals shall comply with legal provisions on civil relations involving foreign elements.
b/ Having investment projects on production, business or service provision or investment projects in service of daily life which are feasible, efficient and compliant with the provisions of law and using hired assets for the execution of such projects.
c/ Having financial capability to pay rents within the committed lease terms.
2.3. Financial-leasing transactions shall satisfy the conditions specified in Clause 1, Article 1 of the Government's Decree No. 65/2005/ND-CP of May 19, 2005, and relevant legal documents.
3. Currencies used in financial-leasing transactions
Financial leasing companies shall conduct financial-leasing transactions in Vietnam dong. Where financial-leasing transactions are conducted in foreign currencies, financial leasing companies and the lessees shall comply with the provisions of law on foreign exchange and the guidance in this Circular.
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