Apply for a change of foreign loan

Currently, globalization progress is taking place rapidly with an increasingly large scale in the socio-economic field, so more and more business activities, trade, international business, investment,… But there are not only advantages and opportunities but also challenges and difficulties leading to the above activities, economic entities also sometimes need to borrow capital to carry out business activities, including loans from abroad. So what is a foreign loan? How do I apply for a change in a foreign loan?

Learn about foreign loans 

Foreign loans include foreign loans not guaranteed by the Government and foreign loans guaranteed by the Government in any form of borrowing through loan agreements, contracts for import of deferred goods, loan mandate agreements, financial leasing contracts or the issuance of debt instruments on the international market by the borrower

Therefore, we will divide into two cases:

1. Foreign loans not guaranteed by the Government
2. Foreign loans guaranteed by the Government

Registration of changes to foreign loans is not guaranteed by the Government

Apply for a change of foreign loan

Subjects of loan change application

• The borrower enters into a foreign loan agreement with a non-resident lender
• The organization shall be responsible for repaying debts directly to the mandator in case the credit institution or a branch of a foreign bank signs a contract for receiving a re-loan mandate with the mandatory being a non-resident
• The obligor shall repay debts under debt instruments issued outside the territory of Vietnam to non-residents
• The lessee in the financial leasing agreement with the lessor is a non-resident
• The successor to the foreign debt repayment obligation is subject to change registration as prescribed in Circular 12/2022/TT-NHNN in case the borrower is performing a foreign loan, it shall divide, separate, consolidate or merge.

In case of applying for a loan change

Any contents related to the loan mentioned in the written confirmation of registration of change of foreign loans of the State Bank, the borrower shall register the loan change with the State Bank. Registration is not required if it falls into the following cases:

• Change the time for capital withdrawal and principal repayment within 10 working days compared to the plan confirmed by the State Bank;
• Change the address of the borrower but do not change the province or city where the borrower’s head office is located, the borrower shall send a notice of the change of address to the competent authority confirming the registration or registration of change of the borrower’s foreign loan;
• Change of lender, relevant information about the lender in a syndicated loan with the appointment of representatives of lenders, unless the lender is also the representative of the lenders in the syndicated loan and the change of lender changes the role of the lenders’ representatives;
• Change the name of commercial transactions of banks providing account services or banks serving secured transactions;
• Change the plan to pay interest and fees of the foreign loan compared to the plan confirmed by the State Bank in the written confirmation of registration and confirmation of registration of change of foreign loan, but do not change the way of determining interest and fees specified in the foreign loan agreement. The borrower is responsible for making a table of interest and fees payable so that the bank providing account services has a basis for checking and monitoring when making the money transfer;
• Change (increase or decrease) the amount of capital withdrawal, repayment of principal, interest and fees within 100 units of the currency of the foreign loan compared to the amount stated in the written confirmation of registration, the written confirmation of registration of change of foreign loan;
• Change the amount of capital withdrawal, actual principal repayment of a specific period is less than the amount stated in the capital withdrawal plan, debt repayment on the written confirmation of registration or the written confirmation of registration of change of foreign loan.

Loan change application documents

• Loan change application.

• If you have declared in advance on the Website before submitting the application, the borrower prints the Application from the Website, signs and stamps it
• If not declared in advance, the application form for change of foreign loan according to Appendix 04 of Circular 12/2022/TT-NHNN

• Copies and Vietnamese translations of the change agreements related to the content of the borrower’s registration of changes.
• A copy of a document issued by a competent authority in accordance with the law on assignment and decentralization of the exercise of rights, responsibilities and obligations of state owners with respect to state-owned enterprises and state capital invested in enterprises on the approval of changes in foreign loan plans of borrowers being state-owned enterprises in case of change increase the loan amount or extend the loan term (not applicable to loans of commercial banks where the State Bank is the owner’s representative agency and has been approved and approved by the State Bank in accordance with regulations on management and use of state capital at enterprises).
• The composition of the dossier specified in Clause 3, Article 16 of Circular 12/2022/TT-NHNN in case of change in increase in loan amount, change of loan use purpose for unrealized loan amount.
• The composition of the dossier specified in Clause 7, Article 16 of Circular 12/2022/TT-NHNN in case the borrower being a credit institution or a branch of a foreign bank increases the foreign loan amount.
• Written confirmation of the bank providing account services on the situation of capital withdrawal and repayment (principal and interest) up to the time of registration of loan change, in case of registration of change in loan amount, capital withdrawal plan, debt repayment plan or change of commercial bank providing account service.
• In case the borrower is unable to provide the confirmation of the bank providing the account service as stipulated in this paragraph because the bank providing the account service has closed or suspended operations before the borrower changes to another bank providing account services and/or withdraws funds, repayment of foreign loans in cases of capital withdrawal, debt repayment not required to be made through foreign loan accounts or debt repayment as prescribed in Article 34 of Circular 12/2022/TT-NHH, the borrower chooses to provide other documents as specified at Point d, Clause 8, Article 16 of Circular 12/2022/TT-NHH.

Order and procedures for applying for loan changes

Prepare Loan Change Application:

• If you have declared in advance on the Website before submitting the application, the borrower prints the Application from the Website, signs and stamps it
• If not declared in advance, the application form for change of foreign loan according to Appendix 04 of Circular 12/2022/TT-NHNN

Time limit for submitting application for change of foreign loan:

Within 30 working days from the date:

– The parties sign the change agreement; or in case the changed content does not need to sign an agreement, just before the time of implementing the changed content but still ensure compliance with the foreign loan agreement;

– The organization that inherits the obligation to repay foreign loans shall be granted business registration certificates; or the date on which the parties sign an agreement on the change of borrower in case the original borrower is divided, separated, consolidated or merged (whichever comes later) and before continuing to withdraw or repay the foreign loan;

– The borrower completes updating information on name change and/or address change to transfer head office to another province or city on the National Business Registration Database;

– The lender (or the organization representing the lender in the syndicated loan – if any), the guarantor, the guarantor or other related parties mentioned in the written confirmation of registration, the written confirmation of registration of the change shall send written notice to the borrower of the name change and before making money transfer transactions involving the parties this.

The State Bank shall issue a written confirmation or refusal to confirm the loan change registration (clearly stating the reason) within the time limit:

– In case the borrower has declared loan change information on the Website before submitting the change application dossier: 12 working days from the date of receipt of the complete and valid application of the borrower

– In case the borrower fails to declare loan change information on the Website before submitting the change registration dossier: 15 working days from the date of receipt of the complete and valid application of the borrower

The State Bank (Foreign Exchange Management Department) or the State Bank’s branch of the province or city where the borrower’s head office is located shall:

• Check the consistency and accuracy of the loan change application with the information declared on the Website; update the application processing status on the Website so that the borrower can promptly monitor in case the borrower has declared loan change information on the Website before submitting the change application;
• The organization enters relevant information of the loan on the Website to store information in the database of foreign loans and repayment of enterprises not guaranteed by the Government in case the borrower fails to declare loan change information on the Website before submitting the change registration dossier; update the application processing status on the Website for timely monitoring by borrowers.

Registration of changes to a government-guaranteed loan

Conditions for being guaranteed by the Government

• Have legal status, legally established in Vietnam
• Operate continuously for at least 03 years before the date of submission of the dossier of application for approval of the policy on grant of guarantee or application for grant of guarantee;
• No losses in the last 03 consecutive years according to the audit report, except for losses caused by the implementation of State policies approved by competent agencies;
• There are no overdue debts at the time of applying for guarantee, including overdue debts with sub-lending agencies specified in Clause 2, Article 33 of the Law on Management of Public Debts, overdue debts with the Debt Repayment Accumulation Fund, overdue debts with lenders for loans guaranteed by the Government, overdue debts with other credit institutions.
• Having a feasible project financial plan appraised by the Ministry of Finance and reported to the Prime Minister for approval as prescribed in Clause 1, Article 15 and Clause 1, Article 20 of Decree 91/2018/ND-CP
• Having an equity capital ratio of at least 20% of the total investment amount of the project approved by a competent agency together with a specific equity allocation plan according to the project implementation schedule;
• In case of bond issuance, enterprises must satisfy the conditions for issuing securities to the public in accordance with the law on securities and securities market.
• The State Bank of Vietnam shall confirm the registration of change of foreign loans guaranteed by the Government to the guarantors after the Ministry of Finance issues a letter of guarantee
• Enterprises that are guaranteed shall register loan changes with the State Bank

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