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In brief

The State Bank of Vietnam (SBV) released a draft circular on conditions for enterprises’ offshore loans without government guarantee (“Draft Circular“), which aims to replace Circular No. 12/2014/TT-NHNN dated 31 March 2014 (“Circular 12“). The Draft Circular tightens the control on offshore loans to tackle the risk of excess national foreign debt quota and to promote the onshore loan market. Borrowers are now expected to meet additional conditions to borrow offshore loans without government guarantee.

Notable points of the general and specific conditions applicable to borrowers under the Draft Circular are as follows:

  1. General conditions:
    • Appointing an onshore enforcement agent with regards to Vietnamese-located collaterals;
    • Imposing  a ceiling on borrowing costs applicable to offshore loans; and
    • Using foreign currency derivatives to hedge exchange rate risk.
  2. Particular conditions:
    • Changes to loan purposes;
    • Imposing a borrowing limit applicable to an enterprise; and
    • Imposing a borrowing limit applicable to credit institutions and foreign bank branches.

Further details regarding these are addressed in the client alert here, along with other new additional points of the Draft Circular.

Click here to read the full alert.


Oanh Nguyen is a partner in Baker McKenzie Vietnam and has been practising capital markets, banking and finance, M&A, and commercial law for more than 25 years. Knowledgeable about all aspects of investments, she advises on all types of transactions, ranging from investment structures to project structures and their related financing. She has focused on public M&A matters, including major IPOs and projects finance.

Oanh is a respected presenter in the areas of finance and capital markets. In addition, she has lectured at the Ho Chi Minh City Bar Association. She also serves as a legal advisor to the Capital Market Committee of Ho Chi Minh City American Chamber of Commerce.


Thuy Van Pham is a special counsel at the Firm's Ho Chi Minh City office with more than 10 years of experience advising on investment, banking and finance in Vietnam. She has been involved in many transactions, including cross-border financing deals and M&A transactions in Vietnam across a wide range of industries, including banking and finance, insurance and securities, manufacturing, oil and gas, real estate, telecommunications. Van has also been advising major banks in Vietnam on regulatory issues for their daily operations.


Ngoc Phuong Chi Vo is an Associate in Baker McKenzie, Ho Chi Minh City office.


Thai Ninh (Daniel) Ngo is an Associate in Baker McKenzie, Hanoi office.

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