Decree No. 16/2001/ND-CP dated May 02, 2001 of the Government on the organization and operation of financial leasing companies

THE GOVERNMENT -----	SOCIALIST REPUBLIC OF VIET NAM Independence - Freedom - Happiness -------
No: 16/2001/ND-CP	Hanoi, May 02, 2001

DECREE

ON THE ORGANIZATION AND OPERATION OF FINANCIAL LEASING COMPANIES

THE GOVERNMENT

Pursuant to the Law on Organization of the Government of September 30, 1992;

Pursuant to December 12, 1997 Law No. 01/1997/QH10 on the State Bank of Vietnam;

Pursuant to December 12, 1997 Law No. 02/1997/QH10 on Credit Institutions;

At the proposal of the Governor of the State Bank of Vietnam,

DECREES:

Chapter I

GENERAL PROVISIONS

Article 1.-

1. Financial lease means the medium-term and long-term credit activities through the lease of machinery, equipment and transport means and other movables on the basis of lease contracts between the lessors and the lessees. The lessors undertake to purchase machinery, equipment, transport means and other movables at the requests of the lessees and hold the ownership over the leased assets. The lessees use the leased assets and pay rents therefor during the whole leasing term as agreed upon by the two parties.

2. Upon the expiry of the leasing term, the lessees may opt to purchase the leased assets or continue to lease them under the conditions already agreed upon in the financial leasing contracts. The total rent payable for an asset determined in a financial leasing contract must be at least equal to the value of such asset at the time of signing of the contract.

3. Financial leasing activities on the Vietnamese territory must be conducted through financial leasing companies established and operating in Vietnam and comply with the provisions of this Decree.

4. Financial leasing companies’ financial leasing activities overseas shall comply with the provisions of this Decree and other relevant provisions of Vietnamese law or the involved parties may agree upon the application of international practices if such practices do not run counter to Vietnamese law.

Article 2.- Financial leasing companies are non-bank credit institutions and Vietnamese legal persons. They are established and operate in Vietnam in the following forms:

1. State-run financial leasing companies.

2. Joint-stock financial leasing companies.

3. Affiliate financial leasing companies of credit institutions.

4. Joint-venture financial leasing companies.

5. Financial leasing companies with 100% foreign capital.

Article 3.-

1. Joint-venture financial leasing companies are established with the capital contributed by the Vietnamese party consisting of one or more than one Vietnamese credit institution and/or enterprise and the foreign party consisting of one or more than one foreign credit institution, on the basis of joint-venture contracts.

2. Financial leasing companies with 100% foreign capital are established with the capital contributed by one or more than one foreign credit institution in accordance with the provisions of Vietnamese law.

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