Circular No. 10/2006/TT-NHNN guides credit institutions in lending to customers for direct investment abroad.

CIRCULAR

Guidelines for credit institutions to provide loans to customers for direct investment abroad borrow to invest directly abroad

Pursuant to Decree No. 78/2006/NĐ-CP dated August 9, 2006 of the Government on direct investment abroad (hereinafter referred to as Decree No. 78/2006/NĐ-CP), the State Bank of Vietnam guides credit institutions to provide loans to customers for direct investment abroad as follows:

a) Cadres, civil servants, public officials, and workers as stipulated in Article 2 of Decree No. 178/2024/NĐ-CP dated December 31, 2024 (amended and supplemented by Decree No. 67/2025/NĐ-CP dated March 15, 2025) of the Government on policies and treatment for cadres, civil servants, public officials, workers, and armed forces personnel in the process of organizational restructuring of the political system, having a total mandatory social insurance contribution period of at least 15 years when working in heavy, hazardous, or dangerous jobs or extremely heavy, hazardous, or dangerous jobs listed by the agency under the Government responsible for labor administration, or working in areas with particularly difficult socio-economic conditions including time worked in places with regional allowances of coefficient 0.7 or higher before January 1, 2021, and reaching the retirement age as specified in Appendix II issued together with Decree No. 135/2020/NĐ-CP, ceasing work immediately due to direct impact from organizational restructuring and implementation of the two-level local government model;

a) Credit institutions that are permitted to conduct foreign exchange operations may provide loans to customers for direct investment abroad.

b) Borrowers are investors as defined in Clauses 1, 2, 3, 4, and 5 of Article 2 of Decree No. 78/2006/NĐ-CP.

2. Responsibilities of credit institutions

Credit institutions providing loans to customers for direct investment abroad shall be responsible for:

a) Adhering to the provisions of Decree No. 78/2006/NĐ-CP, this Circular, and other relevant laws.

b) Balancing their own sources of funds and foreign currencies to meet the borrowing needs of customers.

c) Assessing the investment project, loan conditions, and the borrower's ability to repay to decide on lending and bear responsibility for their decision.

3. Loan Conditions

Credit institutions shall consider and decide to lend when borrowers for direct investment abroad satisfy the following conditions:

a) The investment project does not fall within the list of sectors prohibited or restricted from direct investment abroad issued by the Prime Minister.

b) Meeting all conditions for direct investment abroad and transferring foreign capital as stipulated in Article 4, Clause 1 of Article 23 of Decree No. 78/2006/NĐ-CP.

c) Fulfilling all loan conditions specified in Article 7 of the Regulation on Lending by Credit Institutions to Customers issued pursuant to Decision No. 1627/2001/QĐ-NHNN dated December 31, 2001 of the Governor of the State Bank of Vietnam.

d) Having sufficient equity (including shareholders' equity, reserves, and undistributed profits) participating in the total investment capital of the direct investment abroad project according to the regulations of the credit institution.

4. Loan Requirements

Credit institutions shall provide loans to customers for direct investment abroad in Vietnamese dong and foreign currency for the following purposes:

a) To contribute capital in cash to implement the direct investment abroad project.

b) To cover expenses and purchase assets in Vietnam and abroad serving the direct investment abroad project, including: machinery and equipment; materials, raw materials, fuel, finished goods, semi-finished products; value of industrial property rights, trade secrets, technological processes, technical services, intellectual property rights; other lawful assets.

Credit institutions shall not provide loans for expenses and purchases of assets prohibited or restricted from being transferred abroad under Vietnamese law, or assets prohibited or restricted from transactions under the law of the receiving country.

5. Loan Guarantees

a) Credit institutions shall consider and decide to lend to customers for direct investment abroad based on having guarantees or not having guarantees in accordance with the law and bear responsibility for their decisions.

b) In cases where the loan guarantee is provided by the borrower's or a third party's assets located abroad or by assets of a legal entity formed from the direct investment abroad project, the parties shall comply with the laws of the receiving country if the application or consequences thereof do not contravene the fundamental principles of Vietnamese law: the credit institution accepting guarantees by foreign assets must have the capacity to manage the assets during the lending period and dispose of them to recover the debt if the borrower fails to repay the debt.

6. Loan Application Documents

When there is a need for a loan, the borrower shall submit a loan request letter and necessary documents proving compliance with loan conditions as stipulated in Clause 3 of this Circular to the credit institution. The borrower shall be responsible for the accuracy and legality of the documents submitted to the credit institution. The credit institution shall guide the types of documents in the loan application dossier suitable for the specific characteristics of each type of investment project, form of direct investment abroad, and lending method.

7. Implementation of Foreign Exchange Regulations

Borrowers for direct investment abroad may transfer the loan amount abroad to contribute capital to implement the investment project and repatriate capital, profits, and other income generated from the direct investment abroad project back to Vietnam to repay the loan. During the lending process, using the loan, and repaying the debt, all money transfers related to the direct investment abroad project shall be carried out in accordance with the Foreign Exchange Law, the Government's Decrees guiding the implementation of the Foreign Exchange Law, and other relevant foreign exchange regulatory documents.

8. Monitoring of Loans

Credit institutions shall be responsible and have the right to monitor the loan process, use of loan funds, and repayment by the borrower based on financial reports and other relevant documents of the borrower and legal entities formed from the direct investment abroad project; directly inspect the operation of the direct investment abroad project and collateral (if any). The credit institution and the borrower must agree in the credit contract on inspection and monitoring measures appropriate to actual conditions, characteristics, and nature of the loan to ensure the safety and effectiveness of the loan.

9. Classification of Debts, Provisioning, and Risk Management

Credit institutions shall classify debts, provision, and utilize provisions to handle credit risks for loans for direct investment abroad in accordance with Decision No. 493/2005/QĐ-NHNN dated April 22, 2005 of the Governor of the State Bank of Vietnam on Debt Classification, Provisioning, and Utilization of Provisions to Handle Credit Risks in Banking Operations of Credit Institutions and other relevant regulatory documents.

10. Application of Lending Regulations

Provisions related to lending to customers for direct investment abroad that are not specifically provided for in this Circular shall be governed by the following legal documents: Decree No. 78/2006/NĐ-CP dated August 9, 2006 of the Government on direct investment abroad; Decree No. 138/2006/NĐ-CP dated November 15, 2006 of the Government detailing the implementation of provisions of the Civil Code concerning civil relations with foreign elements; The lending regulations of credit institutions for customers issued pursuant to Decision No. 1627/2001/QĐ-NHNN dated December 31, 2001 of the Governor of the State Bank of Vietnam; Decision No. 127/2005/QĐ-NHNN dated February 3, 2005 of the Governor of the State Bank of Vietnam amending and supplementing certain articles of the lending regulations of credit institutions for customers issued pursuant to Decision No. 1627/2001/QĐ-NHNN; Decision No. 783/2005/QĐ-NHNN dated May 31, 2005 of the Governor of the State Bank of Vietnam amending and supplementing Decision No. 127/2005/QĐ-NHNN; Decision No. 966/2003/QĐ-NHNN dated August 22, 2003 of the Governor of the State Bank of Vietnam on lending in foreign currency by credit institutions to resident borrowers; other relevant legal documents.

11. Implementation

a) This Circular takes effect fifteen days from the date of publication in the Official Gazette.

b) Credit institutions shall base on the provisions of this Circular to issue guidance documents for customer loans for direct investment abroad that are consistent with their operational conditions and characteristics; submit reports on loans for direct investment abroad in accordance with the accounting and banking statistics reporting system prescribed by the State Bank of Vietnam.

c) Heads of units under the State Bank of Vietnam; Governors of State Bank of Vietnam branches in provinces and centrally administered cities; Chairmen of Management Boards, General Directors (Directors) of credit institutions and borrowing customers are responsible for implementing this Circular./.