New regulations on foreign exchange management
VGP – The State Bank of Viet Nam has issued Circular No. 06/2019/TT-NHNN on foreign exchange management for foreign direct investment activities in Viet Nam.
The Circular, scheduled to take effect since September 6, 2019, regulates such activities like capital contribution, opening and use of foreign currency and Viet Nam Dong direct investment capital accounts, transfer of capital, profits and lawful incomes abroad, and transfer of investment capital, and transfer of investment projects.
Applicable subjects include: (i) foreign-invested enterprises as specificed in clause 2, article 3 of the Circular, (ii) local and foreign investors in foreign-invested enterprises, (iii) foreign investors that are parties to business cooperation contracts, (iv) foreign investors that are parties to public-private partnership, and (v) organizations and individuals involving in foreign direct investment in Viet Nam.
Foreign invested enterprises are defined as: (i) the enterprises being established in the investment form of of economic organizations, in which foreign investors are members or shareholders and must carry out the procedures to obtain investment registration certificates in accordance with legal regulations on investment, (ii) enterprises with 51% or more of the charter capital of the enterprises owned by foreign investors.
Local and foreign investors shall be allowed to contribute the amounts of capital in local and foreign currencies as specified in their investment registration certificates.
The contributed capital shall be carried out through transfer to direct investment capital accounts, reads the Circular.
The transfer of capital, profits and lawful incomes abroad by foreign investors shall also be carried out through the direct investment capital accounts.
The Circular also stipulates the responsibilities of the licensed credit institutions in order to create a legal basis and enhance the responsibilities of the relevant institutions and individuals for complying with the regulations on forex management related to foreign direct investment operations in Viet Nam.
By Quang Minh