THE STATE BANK OF VIETNAM
Circular No. 12/2014/TT-NHNN dated March 31, 2014 of the Vietnam State Bank regulating on conditions for foreign loans of enterprises without government guarantee
Pursuant to the Law No. 46/2010/QH12 dated June 16, 2010 on the State Bank of Vietnam;
Pursuant to the Law No. 47/2010/QH12 dated June 16, 2010 on Credit Institutions;
Pursuant to the Ordinance No. 28/2005/PL-UBTVQH11 dated December 13, 2005 on Foreign Exchange;
Pursuant to the Decree No. 156/2013/ND-CP dated November 11, 2013 of the Government defining the functions, tasks, powers and organizational structure of the State Bank of Vietnam;
Pursuant to the Ordinance No. 219/2013/ND-CP dated December 25, 2013 on management of enterprises’ borrowing of foreign loans and payment of foreign debts without government guarantee;
At the proposal of the Director of the Foreign Exchange Department;
The Governor of the Vietnam State Bank promulgates the Circular regulating on conditions for foreign loans of enterprises without government guarantee
Chapter I
GENERAL PROVISIONS
Article 1. Scope of regulation and subject of application
1. This Circular prescribes on conditions for foreign loans of residents being enterprises, cooperatives and unions of cooperatives credit institutions (except for commercial banks being state enterprises), foreign bank branches established and operating in Vietnam without government guarantee (below referred to as borrowers), except the cases as stipulated under Clause 2 and Clause 3 of this Article.
2. Conditions for issuing international bonds of enterprises without government guarantee shall be implemented according to the Government’s regulations on the issuance of corporate bond.
3. Conditions for foreign loans of commercial banks being the state enterprises shall be implemented according to the regulations of the Vietnam State Bank (below referred to as the State Bank).
Article 2. Interpretation of terms
In this Circular, the terms and phrases below are construed as follows:
1. The short-term foreign loan borrowed by the modes of self-borrowing and self-payment (hereinafter referred to as short-term foreign loan) is foreign loan in a year without government guarantee.
2. The medium and long-term foreign loan borrowed by the modes of self-borrowing and self-payment (hereinafter referred to as medium and long-term foreign loan is foreign loan longer than one year without government guarantee.
3. Production and business schemes using foreign loan is production and business plan in which it must prove purpose, legal and reasonable demand of borrowing and capacity of borrowers).
4. Investment project is the allocation of medium and long-term fund to carry investment idea in a specific area and in a determined period.
5. Foreign loan expense is the total expense exchanged by the annual percentage rate of the loan rate, including the interest rate of foreign loan and other expenses related to the foreign loan that the borrower must pay for the lender, guaranteeing parties, insurance parties, agents and other related parties.
