Opening and using foreign currency accounts abroad.

The State Bank of Vietnam has just issued Circular 20/2015/TT-NHNN regulating the opening and use of foreign currency accounts abroad by resident organizations.

The circular regulates the opening and use of foreign currency accounts abroad by resident organizations, including: credit institutions, branches of foreign banks authorized to conduct foreign exchange operations (referred to as authorized credit institutions); economic organizations (excluding credit institutions); and other organizations including state agencies, armed forces units, political-social organizations, etc.

Illustrative image

The circular stipulates the cases in which credit institutions are permitted to open and use foreign currency accounts abroad.

Accordingly, credit institutions permitted to conduct foreign exchange activities abroad under a license from the State Bank of Vietnam may open and use foreign currency accounts abroad to carry out foreign exchange activities in accordance with the content approved by the State Bank of Vietnam and the laws of the host country where the foreign currency account is opened, without having to apply for a license to open and use foreign currency accounts abroad.

After being granted a license by the State Bank of Vietnam to open and use foreign currency accounts abroad, credit institutions are permitted to open and use foreign currency accounts abroad in accordance with the provisions of the license, the amended and supplemented license decision (if any), the regulations in this Circular, and the laws of the host country where the credit institution is permitted to open the account in two cases.

In the first case, credit institutions are permitted to open and use foreign currency accounts abroad to meet the conditions for applying for licenses to establish and operate representative offices, branches, or wholly-owned banks abroad, as stipulated by the laws of the host country.

In the second case, credit institutions are permitted to open and use foreign currency accounts abroad to serve the operations of their overseas representative offices.

The circular also clearly specifies the cases in which resident economic organizations can open and use foreign currency accounts abroad.

Accordingly, after being granted a license by the State Bank of Vietnam, economic organizations are allowed to open and use foreign currency accounts abroad in accordance with the provisions of the license, the amended and supplemented license decision (if any), the regulations in this Circular, and the laws of the host country where the economic organization opens the account in the following cases: Economic organizations open and use foreign currency accounts abroad to meet the conditions for applying for a license to establish and operate branches and representative offices as prescribed by the laws of the host country.

An open economic organization that uses foreign currency accounts abroad to support the operations of its branches and representative offices overseas.

Businesses, cooperatives, and cooperative unions open and use foreign currency accounts abroad to carry out foreign loans in accordance with agreements with foreign lenders.

The validity period of the License is determined based on: the validity period of the document issued by the competent authority abroad permitting the organization to establish and operate a branch or representative office abroad. In cases where the document issued by the competent authority abroad permitting the organization to establish and operate a branch or representative office abroad does not specify a validity period, the maximum validity period of the License shall not exceed 3 years from the date of issuance, or the validity period of the foreign loan agreement between the foreign borrower and the foreign lender…

This circular takes effect from December 15, 2015.

According to Chinhphu.vn