On 30 September 2022, the State Bank of Vietnam (SBV) officially issued Circular No. 12/2022/TT-NHNN providing instructions on foreign exchange administration regarding offshore borrowing and offshore debt repayment of enterprises (“Circular 12“).
Circular 12 came into effect on 15 November 2022, replacing Circular No. 03/2016/TT-NHNN and its amending circulars (“Circular 03“).
Circular 12 has provided various significant changes to the regulations under Circular 03, as follows:
- The regulations on the registration of offshore loans with the SBV have been amended and supplemented to be more specific and enable the borrower to flexibly perform the relevant procedures.
- Most references to the term “guarantee” have been replaced with the term “security” so that the scope of security measures relating to offshore loans have been expanded (including both guarantee and other security measures).
- Circular 12 has introduced the new concept of supporting security bank.
- Circular 12 provides a set of detailed requirements on accounts serving overseas remittance in relation to the offshore loans.
- Other issues in respect of interests rate applicable to indebtedness amounts between the borrower and the securing party have also been specified in Circular 12.
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