Legal Document Updates in English (41/2014)

EXEMPTING THE IMPORT TAX FOR 5 YEARS FOR MEDICAL EQUIPMENTS
 

This is the content prescribed at the Decision No. 54/2014/QD-TTg dated September 19, 2014 of the Prime Minister on exempting the import tax for devices for manufacturing and assembling the medical equipments with high priority.

In particular, the Prime Minister agrees to exempt from import tax for devices which are imported serving the execution of investment projects to manufacture/assemble medical equipments with high priority shall be exempt from import tax for five (05) years from the commencement of their manufacture/assembly.

BANKS MUST AGREE WITH VDB BEFORE ENTERPRISES BORROWING CAPITAL
 

On October 09, 2014, the State Bank of Vietnam issued the Circular No. 29/2014/TT-NHNN dated guiding commercial banks to coordinate with Vietnam Development Bank in the implementation of guarantee mechanism for small- and medium-sized enterprises borrowing capital as stipulated under the guarantee regulation promulgated together with the Decision No. 03/2011/QD-TTg dated January 10, 2011 of the Prime Minister.

In accordance with this Circular, the lender and Development Bank shall make a written agreement on the coordination for loans with guarantee of Development Bank (hereinafter referred to as agreements on coordination before signing the credit contract, including the following contents: orders of coordination among parties in receiving and handling with borrowing demands with guarantee of the customers; provision of disbursement documents; examination of use of the borrowing capital, assets originating from the borrowing capital (called examination of the borrowing capital); adjustment of debt term, extension of debt; performance of guarantee obligations.

Within 07 working days since the full receipt of the original guarantee document issued by Development Bank, the lender shall consider to sign the credit contract with the customer if the contents of the guarantee document are in

FOREIGN LOANS OVER 10 MILLION USD ARE SUBJECT TO REGISTRATION
WITH THE STATE BANK
 

On September 15, 2014, the State Bank of Vietnam issued the Circular No. 25/2014/TT-NHNN guiding the procedure on registering and registering for changes of foreign loan of businesses not guaranteed by the Government; within that foreign loans not guaranteed by the Government are subject to registration with the State Bank, including medium and long-term foreign loans; short-term foreign loans are extended but the total duration of the loans is over 01 (one) year and short-term foreign loans without extension contract but with outstanding debt at the time of 01 (one) round year from the date of first withdrawal of capital, except when the Borrower finishes its repayment of loan within 10 (ten) days from the time of 01 (one) round year from the date of first withdrawal of capital.

Foreign Exchange Management Department will conduct the registration’s certification, registration’s certification for change in foreign loans with loan turnover of over ten (10) million USD and foreign loans in Vietnam dong. The State Bank branches in provinces and centrally run cities where

FROM OCTOBER 15, TRANSFER THE PERMIT FOR FOREIGN EXCHANGE TRANSACTIONS
 

The State Bank of Vietnam issued the Circular No. 21/2014/TT-NHNN dated August 14, 2014 guiding the foreign exchange transactions, conditions, process and procedures for accepting the foreign exchange transactions of credit institutions and branches of foreign banks, within that the most important contents are changes on conditions for domestic exchange transactions and foreign exchange transactions.

In particular, commercial banks’ elementary foreign exchange transactions in the domestic market shall conduct foreign exchange spot transactions; conduct foreign exchange forward, foreign exchange swap, foreign exchange options, and interest rate swap; receive deposits from, grant loans in foreign currencies to clients other than credit institutions; factor and issue guarantee in foreign currencies; issue international payment cards, act as an agent issuing international payment cards, pay international payment cards, and accept international payment cards; provide the wire transfer or payment services in foreign currencies within Vietnam’s territory; provide foreign currencies payment services; purchase, sell, discount and rediscount negotiable instruments and other valuable papers in foreign currencies….Especially, appoint only staff members who have at least a bachelor's degree in economics, banking, or finance; or those who have bachelor’s degrees in other fields and at least 3 years’ experience of finance and banking sector to hold the positions of department managers or banking officers; all of them must obtain at least C level Degree in English or the equivalent.

Other foreign exchange transactions particularly in the domestic and international market such as outward indirect investments; other derivative foreign exchange transactions on the domestic market except from foreign exchange

CREDIT INSTITUTION MUST HAVE ADVANCES FROM VAMC FOR THE BAD DEBTS
 

In accordance with the Circular No. 20/2014/TT-NHNN dated August 12, 2014 of the State Bank of Vietnam on receipts and advances from Vietnam Asset Management Company (VAMC) for the bad debts bought by special bonds, an advance is an amount paid in advance by debt-selling credit institutions in order for VAMC to cover the expenditures on bad debt settlement.

Within the first 15 working days of January every year, debt-selling credit institutions must transfer the advances paid in the preceding year, which is in proportion to the actual annual average outstanding principal of bad debts bought with special bonds of the preceding year, to VAMC. The Governor of the State Bank of Vietnam shall decide the proportions after reaching an agreement with the Minister of Finance when VAMC can adequately cover its operating cost; the bad debt settlements are expedited; risks and