Ordinance Amending and Supplementing a Number of Articles of the Ordinance on Foreign Exchange
(No. 06/2013/UBTVQH13)
Pursuant to the 1992 Constitution of the Socialist Republic of Vietnam, which was amended and supplemented under Resolution No. 51/2001/QH10;
Pursuant to the National Assembly’s Resolution No. 07/2011/QH13, on the 2012 law- and ordinance-making program and adjustment of the 2011 law- and ordinance-making program;
The National Assembly Standing Committee promulgates the Ordinance Amending and Supplementing a Number of Articles of Ordinance No. 28/2005/PL-UBTVQH11 on Foreign Exchange.
Article 1.
To amend and supplement a number of articles of the Ordinance on Foreign Exchange:
1. To amend and supplement Clauses 2, 4, 6, 7, 11, 12 and 13, Article 4; to add Clause 20 to Article 4 as follows:
“2. Residents means organizations or individuals that are:
a/ Credit institutions or foreign bank branches established and operating in Vietnam in accordance with the Law on Credit Institutions;
b/ Economic organizations other than credit institutions established and conducting business operations in Vietnam (below referred to as economic organizations);
c/ Vietnamese state agencies, armed forces units, political organizations, socio-political organizations, socio-political-professional organizations, social organizations, socio-professional organizations, social funds and charity funds operating in Vietnam;
d/ Foreign-based representative offices of organizations defined at Points a, b and c of this Clause;
dd/ Foreign-based Vietnamese diplomatic missions, consular offices and representative offices at international organizations;
e/ Vietnamese citizens residing in Vietnam; Vietnamese citizens residing overseas for less than 12 months; Vietnamese citizens working for organizations defined at Points d and dd of this Clause and their accompanying individuals;
g/ Vietnamese citizens going abroad for tourism, study, medical treatment or visit;
h/ Foreigners allowed to reside in Vietnam for 12 months or more. Those who come to Vietnam for study, medical treatment, tourism or work for Vietnam-based foreign diplomatic missions, consular offices or representative offices of international organizations or foreign organizations for any terms are regarded as non-residents.
i/ Vietnam-based branches of foreign economic organizations and forms of presence in Vietnam of foreign parties involved in investment activities in accordance with the investment law, and Vietnam-based executive offices of foreign contractors.”
“4. Capital transactions means capital transfer transactions between residents and non-residents in the following activities:
a/ Direct investment;
b/ Indirect investment;
c/ Borrowing of foreign loans and payment of foreign debts;
d/ Provision and recovery of overseas loans;
dd/ Other activities in accordance with Vietnamese law.”
“6. Payment and money transfer for current transactions include:
a/ Payments and money transfers related to import or export of goods or services;
b/ Payments and money transfers related to short-term commercial credit loans and bank loans;
c/ Payments and money transfers related to incomes generated from direct or indirect investments;
d/ Money transfers when the decrease of direct investment capital is allowed;
dd/ Payments of interests on, and installment payments of principals of, foreign borrowings;
e/ One-way money transfers;
g/ Other payments and money transfers as prescribed by the State Bank of Vietnam.”
“7. One-way money transfer means transactions of money transfer from overseas into Vietnam or from Vietnam to overseas, via bank or through a public postal network of a public-utility postal service provider, as financial support, aid or assistance to one’s relatives or for personal spending purposes, and not related to payment for import or export of goods and services.”
“11. Licensed credit institutions means banks, non-bank credit institutions and foreign bank branches licensed to conduct foreign exchange activities and provide foreign exchange services in accordance with this Ordinance.”
“12. Foreign direct investment in Vietnam means that foreign investors invest their capital and participate in the management of investment activities in Vietnam.”
“13. Foreign indirect investment in Vietnam means that foreign investors make investments in Vietnam through purchasing and selling securities and other valuable papers, contributing capital or buying shares, or through securities investment funds or other intermediary financial institutions as defined by law without directly participating in the management of investment activities.”
“20. Foreign exchange business means foreign exchange activities of licensed credit institutions for the purposes of making profits, preventing risks and assuring safety and liquidity for operations of such credit institutions.”
2. To add Clause 5 to Article 8 as follows:
“5. Residents and non-residents may not send foreign currency amounts in postal articles.”
3. To amend and supplement Article 9 as follows:
“Article 9. Carrying of foreign currency cash, Vietnam dong cash and gold on entry or exit; import and export of foreign currencies
1. Individual residents and non-residents on entry who carry foreign currency cash, Vietnam dong cash and gold in excess of the limits set by the State Bank of Vietnam shall declare them to border-gate customs offices.
2. Individual residents and non-residents on exit who carry foreign currency cash, Vietnam dong cash and gold in excess of the limits set by the State Bank of Vietnam shall declare them to border-gate customs offices and produce relevant papers as prescribed by the State Bank of Vietnam.
3. Residents that are licensed credit institutions may import or export foreign currency cash after obtaining written approval of the State Bank of Vietnam. The State Bank of Vietnam shall prescribe dossiers, order and procedures for approving the import or export of foreign currency cash by licensed credit institutions.”
4. To amend and supplement Article 11 as follows:
“Article 11. Foreign direct investment in Vietnam
1. Foreign-invested enterprises and foreign investors that are parties to business cooperation contracts shall open direct investment capital accounts at licensed credit institutions. The contribution of investment capital, transfer of principal investment capital, profits, and lawful revenues abroad must be effected via such accounts.
2. Lawful revenue sources of foreign investors from foreign direct investment in Vietnam may be used for reinvestment or transfer abroad. In case foreign investors have revenues in Vietnam dong and wish to transfer them abroad, they may use these revenues to buy foreign currencies from licensed credit institutions.
3. Other lawful capital transfers related to direct investment activities comply with relevant laws and guidance of the State Bank of Vietnam.”
5. To amend and supplement Article 12 as follows:
“Article 12. Foreign indirect investment in Vietnam
1. Foreign investors that are non-residents shall open Vietnam-dong indirect investment accounts for making indirect investment in Vietnam. Foreign-currency indirect investment capital must be converted into Vietnam dong for investment via such accounts.
2. Lawful revenues of foreign investors that are non-residents from their indirect investment in Vietnam may be used for reinvestment or purchase of foreign currency from licensed credit institutions for transfer abroad.
3. The State Bank of Vietnam shall prescribe the opening and use of Vietnam-dong accounts for making indirect investment and other lawful capital transfers related to indirect investment in Vietnam.”
6. To amend and supplement Article 13 as follows:
“Article 13. Sources of capital for offshore direct investment
Residents that are licensed to make offshore direct investment may use the following foreign-currency capital sources for investment:
1. Foreign currencies on accounts opened at licensed credit institutions;
2. Foreign currencies purchased from licensed credit institutions;
3. Foreign currencies from other lawful capital sources as defined by law.”
7. To amend and supplement Article 14 as follows:
“Article 14. Transfer of capital for offshore direct investment
Residents that are licensed to make offshore direct investment shall open foreign-currency accounts at licensed credit institutions and register the transfer of foreign currencies abroad for investment via such accounts under regulations of the State Bank of Vietnam.”
8. To amend and supplement Article 15 as follows:
“Article 15. Transfer of capital and profits from offshore direct investment back to Vietnam
Capital, profits and lawful revenues from offshore direct investment in accordance with the investment law and relevant laws must be transferred to Vietnam via foreign-currency accounts opened at licensed credit institutions.”
9. To add the following Article 15a after Article 15:
“Article 15a. Offshore indirect investment
1. Licensed credit institutions may make offshore indirect investment in accordance with the investment law and regulations of the State Bank of Vietnam.
2. When licensed to make offshore indirect investment, residents other than credit institutions mentioned in Clause 1 of this Article shall open and use accounts, transfer investment capital abroad, transfer capital, profits and other lawful revenues earned from offshore indirect investment activities back to Vietnam under regulations of the State Bank of Vietnam.”
10. To amend and supplement Article 16 as follows:
“Article 16. Borrowing and repayment of foreign loans by the Government
The Government and other organizations authorized by the Government shall borrow and repay foreign loans and guarantee foreign loans in accordance with the law on public debt management and other relevant laws.”
11. To amend and supplement Article 17 as follows:
“Article 17. Borrowing and repayment of foreign loans by residents
1. Residents that are enterprises, cooperatives, cooperative unions, credit institutions and foreign bank branches may borrow and repay foreign loans on the principle of self-borrowing and self-payment in accordance with law.
2. Individual residents may borrow and repay foreign loans on the principle of self-borrowing and self-payment in accordance with regulations of the Government.
3. When borrowing and repaying foreign loans, residents must satisfy the conditions for borrowing and repayment of foreign loans; register such loans, open and use accounts, withdraw capital and transfer money to repay loans, and report on the use of loans under regulations of the State Bank of Vietnam. The State Bank of Vietnam shall certify the registration of loans within the foreign commercial loan limit annually approved by the Prime Minister.
4. Residents may purchase foreign currencies from licensed credit institutions upon producing valid documents for repayment of principals and interests of and charges related to foreign loans.
5. Other lawful capital transfers related to the borrowing and repayment of foreign loans comply with regulations of the State Bank of Vietnam and relevant laws.”
12. To amend and supplement Article 19 as follows:
“Article 19. Provision and recovery of offshore loans by residents being credit institutions and economic organizations
1. Licensed credit institutions may provide and recover offshore loans and provide guarantees for such loans to non-residents under regulations of the State Bank of Vietnam.
2. Economic organizations may provide offshore loans, except export of goods and services on deferred payment; and provide guarantees for such loans to non-residents after obtaining permission of the Prime Minister.
The State Bank of Vietnam shall guide the opening and use of accounts, transfer of capital abroad and recovery of offshore debts, registration of provision and recovery of offshore loans and other capital transfers related to the provision and recovery of offshore loans by economic organizations.”
13. To amend and supplement Article 22 as follows:
“Article 22. Provisions on restricted use of foreign exchange
In the Vietnamese territory, all transactions, payments, listings, advertisements, price advices, pricing and price quotations in contracts, agreements and other similar transactions of residents and non-residents may not be made in foreign exchange, except those permitted by the State Bank of Vietnam.”
14. To amend and supplement Article 23 as follows:
“Article 23. Opening and use of accounts
1. Residents and non-residents may open foreign-currency accounts at licensed credit institutions. The State Bank of Vietnam shall stipulate the use of foreign-currency accounts of the subjects defined in this Clause.
2. Residents that are licensed credit institutions may open and use foreign-currency accounts overseas to conduct foreign exchange activities overseas under regulations of the State Bank of Vietnam.
3. Residents that are organizations may be considered and licensed for opening foreign-currency accounts overseas in the following cases:
a/ They are economic organizations having overseas branches and representative offices or wishing to open foreign-currency accounts overseas to receive loans, realize commitments or perform contracts with foreign parties;
b/ They are Vietnamese state agencies, armed forces units, political organizations, socio-political organizations, socio-political-professional organizations, social organizations, socio-professional organizations, social funds and charity funds operating in Vietnam and wish to open foreign-currency accounts overseas to receive foreign aid or financial assistance or other cases permitted by competent Vietnamese agencies.”
15. To amend and supplement Article 25 as follows:
“Article 25. Use of Vietnam dong by non-residents
Non-residents that are organizations or individuals that earn Vietnam dong revenues from lawful sources may open accounts at licensed credit institutions. The State Bank of Vietnam shall stipulate the use of Vietnam-dong accounts by the subjects defined in this Article.”
16. To add the following Article 25a after Article 25:
“Article 25a. Use of Vietnam dong by residents being foreign individuals
Residents that are foreign individuals may open and use Vietnam-dong accounts at licensed credit institutions under regulations of the State Bank of Vietnam.”
17. To amend and supplement Article 26 as follows:
“Article 26. Use of currencies of countries bordering on Vietnam
The use of currencies of countries bordering on Vietnam must comply with treaties to which the Socialist Republic of Vietnam is a contracting party and regulations of the State Bank of Vietnam.”
18. To change the title of Chapter V as follows:
“Chapter V. Foreign currency market, exchange rate mechanism and management of gold being foreign exchange”
19. To amend and supplement Clause 2, Article 28 as follows:
“2. Members of the foreign-currency market between licensed credit institutions and their customers include licensed credit institutions and customers being residents and non-residents in Vietnam.”
20. To amend and supplement Clause 2, Article 30 as follows:
“2. The State Bank of Vietnam shall announce exchange rates and decide on the exchange rate regime and exchange rate management mechanism.”
21. To amend and supplement Article 31 as follows:
“Article 31. Management of gold being foreign exchange
The State Bank of Vietnam shall manage gold belonging to the state foreign exchange reserves; manage and organize the import and export of gold in bullions, bars, granules and pieces; and manage gold on overseas accounts of residents in accordance with law.”
22. To amend and supplement Clauses 4 and 5, Article 32 as follows:
“4. Gold managed by the State Bank of Vietnam”
“5. Other types of foreign exchange of the State.”
23. To amend and supplement Article 34 as follows:
“Article 34. Management of the state foreign exchange reserves
1. The State Bank of Vietnam shall manage the state foreign exchange reserves under regulations of the Government in order to realize the national monetary policy, assure international payment capability and preserve the state foreign exchange reserves.
2. The Ministry of Finance shall inspect the management of the state foreign exchange reserves by the State Bank of Vietnam under regulations of the Government.
3. The State Bank of Vietnam shall regularly and irregularly report to the Prime Minister on the management of the state foreign exchange reserves.
4. The Government shall report to the National Assembly Standing Committee on changes in the state foreign exchange reserves.
24. To amend and supplement Article 35 as follows:
“Article 35. The state budget’s foreign currencies
1. The Ministry of Finance shall deposit the whole foreign-currency amount of the State Treasury at the State Bank of Vietnam.
2. The Prime Minister shall stipulate the foreign-currency limit which the Ministry of Finance may retain from state budget revenues to pay the state budget’s regular foreign exchange expenditures. The remaining foreign-currency amount may be sold by the Ministry of Finance to the centralized state foreign exchange reserves at the State Bank of Vietnam.”
25. To add the following Article 35a after Article 35:
“Article 35a. Use of the state foreign exchange reserves
The Prime Minister shall decide on the use of the state foreign exchange reserves for extraordinary or urgent needs of the State. In case the use of the state foreign exchange reserves leads to a change in the state budget estimate, this use must comply with the Law on the State Budget.”
26. To change the title of Chapter VII as follows:
“Chapter VII. Provision of foreign exchange services by credit institutions, foreign bank branches and other organizations”
27. To amend and supplement Article 36 as follows:
“Article 36. Principles of provision of foreign exchange services
1. Credit institutions, foreign bank branches and other organizations may provide foreign exchange services at home and overseas after obtaining written approval of the State Bank of Vietnam.
2. The State Bank of Vietnam shall prescribe the scope of provision of foreign exchange services at home and overseas, and the conditions, order and procedures for approving the provision of foreign exchange services by credit institutions, foreign bank branches and other organizations.”
Article 2.
To annul Article 38 of Ordinance No. 28/2005/PL-UBTVQH11 on Foreign Exchange.
Article 3.
1. This Ordinance takes effect on January 1, 2014.
2. The Government, the Prime Minister and the State Bank of Vietnam shall detail the articles and clauses of this Ordinance as assigned to them.-
On behalf of the National Assembly Standing Committee
Chairman of the National Assembly
NGUYEN SINH HUNG
Vietnamese
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