This is the contents prescribed in Circular No. 08/2023/TT-NHNN dated June 30, 2023, of the State Bank of Vietnam.
A foreign loan agreement means one or a collection of several documents recording an agreement between the parties, whereby the lender delivers or commits to hand over to the borrower a sum of money or property to be used for a specified purpose within a certain period of time with the principle of repayment of both principal and interest.
The foreign loan agreement must be made in writing. In case of an agreement in the form of an electronic data message, it must comply with the law on e-transactions.
The foreign loan agreement must be signed before or on the date of withdrawal of the foreign loan. A foreign loan agreement shall only be signed on the date of withdrawal of a foreign loan in the following cases:
- Short-term foreign loans provided that the loan disbursement is made after the parties sign the loan agreement;
- Foreign loans arising from the transfer of money for investment preparation of projects that have been granted investment registration certificates into foreign loans in accordance with the law on foreign exchange management for foreign debt repayment activities and foreign direct investment activities in Vietnam.
A foreign loan shall be borrowed in a foreign currency. A foreign loan may be borrowed in Vietnam dong only in the following cases:
- The borrower is a micro-finance institution;
- The borrower is a foreign-invested enterprise that takes out the loan from profits from direct investment activities in Vietnam of the lender being a foreign investor contributing capital to the borrower;
- The borrower withdraws capital and repays the debt in foreign currency, and debt obligations of the loan are determined in Vietnam dong.
The borrower and related parties are solely responsible for complying with the current law on secured transactions and other relevant laws when signing and performing security transactions for foreign loans.The Circular No. 08/2023/TT-NHNN takes effect on August 15, 2023.