Decree No. 75/2011/ND-CP dated August 30, 2011 of the Government on state investment credit and export credit

Allowed to lend investment credit at maximum of 70% in investment capital amount

The Government issued the Decree No. 75/2011/ND-CP dated August 30, 2011 on state investment credit and export credit.

According to regulations in this Decree, to lend investment credit, eligible borrowers are investors having investment projects on the list of projects eligible for investment credit attached to this Decree; fully carrying out investment procedures under law; investors have effective production and business projects and plans and prove their debt payment capability; and have financial plans and debt payment plans appraised and loan provision approved by the Vietnam Development Bank; investors have equity capital contributed to projects representing at least 20% and have sufficient capital for project implementation, and satisfy specific financial conditions for the investment capital amount in addition to the state investment credit amount.

A loan amount for each project is 70% at most of the project’s total investment (excluding working capital) while the maximum loan amount for each investor is 15% of the actual charter capital of the Vietnam Development Bank. The loan term shall be determined based on a project’s capital-recovering capacity and its investor’s solvency suitable to the project’s production and business characteristics but must not exceed 12 years.

Conditions for export loans are: exporters having export contracts and overseas importers having contracts on import of goods on the list of those eligible for export credit attached to this Decree; exporters have export contracts. Overseas importers have export contracts already signed with Vietnamese enterprises or economic institutions; exporters and overseas importers have effective production and business plans appraised and loan provision approved by the Vietnam Development Bank; exporters and overseas importers have legal capacity and full civil act capacity and so on.

A loan amount must not exceed 85% of the value of a signed export/import contract or the value of an L/C in case the loan is provided before goods delivery, or the value of a lawful bill of exchange in case the loan is provided after goods delivery; at the same time a loan amount for an exporter or overseas importer must not exceed 15% of the actual charter capital of the Vietnam Development Bank.

The loan term shall be determined based on the capital recovery capacity suitable to characteristics of each export contract and solvency of the exporter or overseas importer but must not exceed 12 months. The maximum loan term for exported seagoing ships is 24 months.