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TYPE OF BUSINESSES NEED TO REGISTER FOR FOREIGN LOAN
Foreign loan registration is a mandatory procedure for businesses that borrow medium, long-term or short-term foreign loans that are extended for a total term of over 1 year at the State Bank. In order to support customers and simplify the foreign loan registration process, Siglaw Law Firm has compiled legal regulations related to the subjects performing this procedure and provides foreign loan registration services. for businesses with nationwide needs.
- Legal basis for foreign loan registration
The legal basis of foreign loan registration includes:
- Circular 12/2014/TT-NHNN of the State Bank stipulates conditions for enterprises not guaranteed by the Government to borrow foreign capital;
- Circular 12/2022/TT-NHNN dated September 30, 2022 of the State Bank guiding regulations on foreign exchange management in foreign borrowing and debt repayment activities of enterprises
Thus, the main legal basis for foreign loan registration is the above two Circulars of the State Bank
- Foreign loans must be registered
Foreign loans required to be registered with the State Bank include:
- Medium and long-term loans from abroad;
- Short-term loans have their principal repayment period extended, if the total loan term exceeds 1 year;
- Short-term loans do not have an extension agreement but still have outstanding principal balance after 1 year from the first capital withdrawal, unless the enterprise pays off the principal balance within 30 working days from the date of completion of 1 year. .
Thus, foreign loans with a loan term exceeding 1 year must be registered with the management agency
- Subjects must register for foreign loans
Subjects registering foreign loans include:
- The party with the obligation to repay debt under debt instruments issued abroad;
- The borrower signs a loan agreement from a foreign organization or individual;
- The lessee of the asset under a financial lease contract with the lessor is a foreign organization or individual;
- The organization inherits the obligation to repay foreign loans when the borrower carries out division, separation, consolidation or merger
- The organization is responsible for repaying the debt directly to the entrusting party in case the entrusted bank relents from a foreign entity.
- Deadline for submitting foreign loan registration documents
The deadline for submitting foreign loan registration documents is specifically regulated. The borrower sends 01 set of foreign loan registration documents to the competent authority to confirm registration according to the provisions of Article 20 of Circular 12/2022/TT-NHNN within the time limit:
- Within 30 working days from the date of signing the medium and long-term loan contract;
- Within 30 working days from the date of signing the agreement to extend the short-term loan to medium or long-term if the extension agreement is within 1 year from the first capital withdrawal;
- Within 30 working days from the date of issuance of investment license and business registration certificate for loans converted from capital prepared for investment;
- Within 60 working days from 1 year from the first capital withdrawal for short-term loans that are overdue for 1 year but have not been renewed or extended after 1 year.
- Time to confirm foreign loan registration
The time for confirmation of foreign loan registration by the State Bank is:
- Within 12 working days from receipt of the borrower’s valid documents if the borrower has declared loan information on the State Bank’s website;
- Within 15 working days from receipt of the borrower’s valid documents if the borrower has not declared on the State Bank’s website.
After review, the State Bank will issue a written confirmation or refusal to register the loan with clear reasons.
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