Regulations on loan amounts for direct outbound investment
VGP – The Governor of the State Bank of Viet Nam on December 25 issued Circular No. 36/2018/TT-NHNN (“Circular 36”) on lending activities by credit institutions and foreign bank branches for outbound investment.
Question: What are new regulations on loan amounts, loan terms and the currency for loan and debt payment?
Answer:
Loan amounts are agreed by credit institutions and their customers, but not exceeding 70% of customer’s capital in the outbound investment.
Loan terms are subject to the agreement between the parties but must be consistent with the customer's repayment capacity, the capability of credit institutions in providing medium and long-term capital, the term of the investment project, the remaining time of the Investment License, the Outbound Investment Registration Certificate or other equivalent documents;
The loan currency is subject to the agreement between credit institutions and their customers but must be in accordance with applicable laws. The currency for debt payment must be that of the loan.
In case of debt payment by other currencies, it is required to be agreed by the credit institutions and their customers in accordance with relevant laws.
Circular 36 shall come into force from February 15, 2019./.
