Circular No. 05/TT-NH5 guides the establishment of Representative Offices of Vietnamese credit organizations abroad.

CIRCULAR

OF THE HEAD OF THE STATE BANK NO. 05/TT-NH5 DATED SEPTEMBER 22, 1995 GUIDING THE ESTABLISHMENT OF REPRESENTATIVE OFFICES OF VIETNAMESE CREDIT ORGANIZATIONS ABROAD

Implementing Article 2 of Decree No. 09/CP dated January 21, 1995 of the Government supplementing the Regulation on Establishing Representative Offices of Vietnamese Enterprises Abroad issued together with Decree No. 40/CP dated May 19, 1994; after exchanging opinions with the Ministry of Trade, the State Bank of Vietnam guides specific points in the regulation applicable to Vietnamese credit organizations as follows:

1. Regarding the subjects establishing representative offices: 

Credit organizations eligible for permission to establish representative offices abroad include:

1.1. State-owned commercial banks;

1.2. Joint-stock commercial banks;

1.3. Joint venture banks;

1.4. Financial companies.

2. Regarding conditions for obtaining permission to establish representative offices abroad:

Vietnamese credit organizations (referred to as credit organizations hereinafter) mentioned in Point 1 of this Circular, if they wish to obtain permission to establish representative offices abroad, must meet the following conditions:

2.1. Having been granted a business license by the State Bank of Vietnam and having at least two years of operation since the date of commencement of operations.

2.2. Having a need to establish a representative office for marketing, seeking markets, gathering information, introducing, and advertising their business activities to customers.

2.3. Having been permitted by the Governor of the State Bank of Vietnam to engage in foreign trade activities.

2.4. Having sound financial conditions, with profits in the previous year and at the time of application for establishment of a representative office.

3. Regarding the establishment of a common representative office for multiple credit organizations:

3.1. Credit organizations meeting the conditions set out in Point 2 above may agree to jointly establish a common representative office abroad.

3.2. The application for establishment of a representative office abroad will be processed and submitted to the State Bank of Vietnam by one credit organization for consideration and issuance of a permit according to regulations.

3.3. Credit organizations shall negotiate among themselves regarding funding, organization, and operation of the common representative office.

4. Regarding personnel of the representative office:

4.1. The representative office of a Vietnamese credit organization abroad is a subordinate unit of the credit organization, consisting of a person in charge (Head of the Representative Office) and other staff working at the representative office.

4.1.1. The Head of the Representative Office must be part of the credit organization's staffing plan in the country.

4.1.2. The representative office may hire foreign employees or overseas Vietnamese residents under conditions agreed upon by both parties that comply with Vietnamese law and the laws of the host country.

4.2. Vietnamese credit organizations are not allowed to hire officials or staff from the representative offices of the Socialist Republic of Vietnam or its representative offices abroad to work or perform the duties and powers of a credit organization's representative office abroad.

4.3. The representative office, the person in charge, and the staff of the representative office must abide by Vietnamese law, respect the laws, customs, and traditions of the host country, international laws, and customs.

4.4. The person in charge and the staff of the representative office are subject to administrative state management and political and diplomatic guidance from the representative office of the Socialist Republic of Vietnam in the host country; at the same time, they are subject to human resources management and professional guidance from the General Director (Director) of the domestic credit organization.

5. Regarding the responsibilities and powers of the General Director (Director) of a credit organization with a representative office abroad:

5.1. Managing, directing, and being responsible for all activities of the representative office abroad;

5.2. Deciding on the appointment, dismissal, and recall of the person in charge of the representative office; being responsible for the recruitment and termination of employment of staff at the representative office abroad;

5.3. Directly guiding the professional activities of the representative office of the credit organization abroad.

6. Regarding the application dossier and procedures for obtaining permission to establish a representative office abroad:

6.1. The application dossier for obtaining permission to establish a representative office abroad (referred to as the permit) includes:

6.1.1. The resolution of the Board of Directors on the establishment of a representative office of the credit organization abroad, and the report of the Chairman of the Board of Directors of the credit organization requesting to establish a representative office abroad. The report must clearly state the reasons, name, tasks, location of the representative office, and the ability to establish a representative office based on foreign relations.

6.1.2. The decision of the General Director (Director) appointing the Head of the Representative Office. In cases where the General Director concurrently holds the position of Head of the Representative Office as stipulated in Point 4.1.3 above, a resolution of the Board of Directors of the credit organization approving it must be attached.

6.1.3. A brief curriculum vitae and academic credentials of the Head of the Representative Office.

6.1.4. Copies of the establishment permit, business permit, and registration for business.

6.2. Procedures:

6.2.1. Vietnamese credit organizations wishing to establish a representative office abroad must submit three complete sets of dossiers as specified in Point 6.1 of this Circular to the Governor of the State Bank (through the branch of the State Bank in the province or city where the credit organization is headquartered). For state-owned commercial banks and joint venture banks, the dossier should be sent directly to the Central State Bank.

In cases where a common representative office is established for multiple credit organizations, the dossiers of member credit organizations must also be attached.

6.2.2. Within a maximum period of 15 days from the date of receipt of the complete dossier, the Branch of the State Bank is responsible for reviewing and submitting its opinion along with three sets of dossiers of the credit organization to the Governor of the State Bank.

6.2.3. Within 30 days from the date of receipt of the dossier, the Central State Bank will notify the credit organization of the decision to approve or not approve the establishment of a representative office abroad.

In cases where approval is not granted, the reasons will be clearly stated and notified to the credit organization.

7 ||| REGARDING THE OPENING OF OPERATIONS OF THE REPRESENTATIVE OFFICE:

Trong trường hợp không chấp thuận, sẽ thông báo rõ lý do cho tổ chức tín dụng biết.

7. Về khai trương hoạt động của Văn phòng Đại diện:

7.1. Within six months from the date of receiving the State Bank of Vietnam's approval, the credit institution must complete the establishment of the Representative Office and submit a written report to the State Bank of Vietnam.

7.2. In case the credit institution fails to complete the establishment of the Representative Office within the aforementioned period, the Chairman of the Board of Management of the credit institution must submit a written report to the State Bank of Vietnam detailing the reasons, return the license for establishing the Representative Office, or request an extension.

The Governor of the State Bank of Vietnam will consider extending the license on a case-by-case basis. The extension period shall not exceed six months.

7.3. The credit institution must organize the opening ceremony of the Representative Office in accordance with the regulations of the host country.

8. Regarding reporting requirements:

8.1. Not later than fifteen days after changing its name or address, or changing the Head of the Representative Office abroad, the credit institution must submit a written report to the State Bank of Vietnam.

8.2. Every six months, the credit institution must report on the activities of the Representative Office to the State Bank of Vietnam.

8.3. When unusual issues arise, the credit institution must submit a written report to the State Bank of Vietnam and propose recommendations and solutions.

8.4. Reports by credit institutions as stipulated in Clause 1.2, 1.4 of Point 1 must be sent through the State Bank of Vietnam Branch where the main office is located (accompanied by a report from the Head of the Representative Office submitted to the credit institution).

8.5. Additionally, the credit institution must fulfill other types of reports as required by the State Bank of Vietnam.

9. Regarding the termination of the Representative Office of Vietnamese credit institutions abroad:

9.1. The Governor of the State Bank of Vietnam decides to terminate the Representative Office of a credit institution abroad in the following cases:

9.1.1. At the request of the Chairman of the Board of Management of the credit institution;

9.1.2. The credit institution ceases operations;

9.1.3. Serious violation of the regulations of the State Bank of Vietnam;

9.1.4. The Representative Office has exceeded its operational period without being extended by the competent authority of the host country;

9.1.5. Violation of the Law and being banned from operating by the competent authority of the country where the Representative Office is established;

9.2. Fifteen days prior to making a decision to terminate the Representative Office of a credit institution abroad, the State Bank of Vietnam will notify the credit institution in writing.

9.3. Upon receipt of the notification from the State Bank of Vietnam as stipulated in Clause 9.2, the credit institution is responsible for notifying the competent authority of the host country, and handling any outstanding issues (if any). The credit institution bears full responsibility for the settlement and resolution of any remaining matters of the Representative Office abroad.

10. Regarding implementation provisions:

10.1. Credit institutions that have previously established Representative Offices abroad must reapply for the files according to the guidance provided in Point 6 above, along with a copy of the Representative Office establishment license issued by the foreign side, and submit them to the State Bank of Vietnam within a maximum of six months.

10.2. This Circular takes effect from the date of signature.

10.3. Any amendments or supplements to this Circular shall be decided by the Governor of the State Bank of Vietnam.