Viet Nam

Viet Nam

New regulations on foreign exchange took effect

06 Sep 2019

On 26 June 2019, the State Bank of Vietnam issued Circular 06/2019/TT-NHNN on foreign exchange control of foreign direct investment (FDI) activities in Vietnam. It replaces Circular 19/2014/TT-NHNN (Circular 19) and amends certain articles in Circular 05/2014/TT-NHNN on the opening and use of foreign indirect investment capital accounts, and in Circular 16/2014/TT-NHNN on the use of foreign currency and Vietnamese Dong (VND) accounts for residents and non-residents.

Circular 19 required foreign invested enterprises (FIE) to open a direct investment capital account (DICA), but the definition of an FIE was not entirely clear. Articles 3.2 and 5 of Circular 06 clarifies the definition as follows: - Enterprises newly established by foreign investors and required by Vietnamese law to obtain an investment registration certificate; - Enterprises having 51% or more foreign ownership; and, - Project companies established by foreign investors to implement public-private partnership projects.

In addition to an FIE, Circular 06 requires the following investors to open a DICA: - Foreign investors entering into business co-operation contracts (BBC Investors); and - Foreign investors directly entering into PPP projects without setting up a project company.

Also, Circular 09 previously required unused pre-establishment costs to be remitted withing 30 days from the date that these costs were converted from VND to foreign currency. This timeline has been abolished under Circular 06.

Nature of measure:
  • Treatment and operation
Type:
  • Treatment and operation (Capital transfer and FOREX)
Inward FDI:
No
Outward FDI:
No
Sources: