Foreign exchange control to direct investment activities

Question: What are the regulations on foreign exchange control to direct investment activities?

Answer:

The State Bank of Viet Nam on August 11, 2014 issued Circular 19/2014/TT-NHNN (Circular 19) on foreign exchange management to FDI activities in Viet Nam.

Circular 19 also stipulates that in the implementation of foreign loans of which borrowed currency is not correlative with the currency used to open the direct investment capital account, FDI enterprises have the right to open more direct investment capital accounts using borrowed foreign currencies at the authorized bank where the direct investment capital account has been opened to implement legitimate receipt and expense transactions related to foreign loans and receipt and expense transitions.

A FDI enterprise/a BCC foreign investor is only allowed to open just one direct investment capital account in such foreign currency to carry out transactions of investment capital contribution.

Circular 19 allows foreign investors to transfer investment capital into Viet Nam before beiing granted Investment certificates to fulfill legal costs for preparation stages to invest in Viet Nam through their foreign currency payment account at authorized banks.

In case all investment capital which have been transferred into Viet Nam is not spent or the FDI enterprise is not established in Viet Nam, FDI enterprises and foreign investors have the right to buy foreign currency and remit the remaining investment capital abroad if they have proper documents providing the capital transferred into Viet Nam and the legal expenses arising related to the preparation of direct investment projects in Viet Nam.

Circular 19 took effect from September 22, 2014 and replaced Article 9 of Circular 05/2014, dated March 12, 2014./.