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Reporting foreign loans to the State Bank
The investor must have a certain amount of capital to implement the investment project. However, in most cases, investors will not be able to have large enough capital available for the project, and they may choose to borrow capital to implement the project. Therefore, when borrowing capital, they will have to report to the State Bank. So what are the specific regulations on the issue of “reporting foreign loans to the State Bank“, let’s find out in the article below.
The concept of a foreign loan
According to the provisions of Article 3, Clause 1 of Circular 12/2022/TT-NHNN, the term “foreign loan” is used to describe a set:
- Foreign loans not guaranteed by the Government (called self-borrowing, self-paying loans),
- It also includes foreign loans guaranteed by the Government in the form of loan contracts, deferred import contracts, loan trust agreements, financial leasing agreements or the issuance of debt instruments on the international market by borrowers.
What foreign loans must be registered with the State Bank?
Article 11 of Circular 12/2022/TT-NHNN, the registration of foreign loans with the State Bank includes:
(i) Medium and long-term loans from abroad.
(ii) The short-term loan has extended the principal repayment period, but the total term of the loan still does not exceed 1 year.
(iii) The short-term loan does not have an extension agreement, but still has principal debt (including interest debt entered into principal) at the full time of 1 year from the date of the first withdrawal. This is unless the borrower has paid the entire principal debt mentioned above within 30 working days, counting from the full date of 1 year from the date of the first withdrawal.
Who is the entity registering a foreign loan with the State Bank?
Persons or organizations may apply for foreign loans with the State Bank, and these include:
- The borrower concludes a foreign loan agreement with the lender, in case the borrower is not resident.
- The organization is directly responsible for repaying debts to the principal, especially in situations where credit institutions or foreign bank branches sign contracts for receiving loan trustees with non-resident principals.
- Persons obliged to pay debts through debt instruments issued outside the territory of Vietnam to non-residents.
- The tenant in the financial leasing agreement with the lessor does not have a residence.
- Organizations inherit debt repayment obligations for foreign loans, and they need to carry out registration and related procedures as prescribed in Circular 12/2022/TT-NHNN. In case borrowers are making foreign loans, they must also make divisions, separations, consolidations or mergers as prescribed in Article 14 of the above Circular.
Process and procedures for reporting foreign loans to the State Bank
Reporting foreign loans to the State Bank
According to the provisions of Article 41 of Circular 12/2022/TT-NHNN, the process of reporting the performance of foreign loans by borrowers is described as follows:
- Every month, before the 5th day of the month following the reporting period, the borrower must make an online report on the performance of short-, medium-term and long-term loans on the Website.
- If the Website encounters technical problems and is unable to submit a report, the borrower must submit a written report, following the form in Appendix 05, published together with Circular 12/2022/TT-NHNN.
- Within about 10 working days after receiving the report from the borrower on the Website, the branch of the State Bank of Vietnam will approve the report on the Website (or enter information from the written report in case the Website encounters technical problems) to store the information in the database system.
- If the reporting information is correct, the borrower will receive an email notification of the completion of the prescribed report. In case there is inaccurate information or need clarification, the SBV branch will notify via email to the borrower to make data adjustments.
- Within 03 working days after detecting errors in the report on foreign loans and repayments, the borrower is responsible for making an online report on the Website (or in writing if the Website has technical problems) on the status of short-term loan performance, medium and long term, accompanied by corrected figures.
- At the same time, the borrower must also notify the branch of the State Bank via email for the branch to conduct inspection as prescribed in the Circular.
Penalties for failure to submit foreign loan reports to the State Bank
Based on the provisions on sending reports that do not comply with the time limit prescribed by law, except for the cases specified at Points a, a and c of Clause 5 of this Article and Clause 1, Article 44 of this Decree, violations may be sanctioned from VND 5,000,000 to VND 10,000,000.
In addition, the breaching party must also return the full report as prescribed at Point a of Clause 7, Article 47 of Decree 88/2019/ND-CP.
Phone: (+84) 961 366 238
Email:
Headquarters: No.44/A32-NV13, Gleximco A, Le Trong Tan street, An Khanh, Hoai Duc, Ha Noi, Vietnam.
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