Question:
We plan to lend about 2 million USD to an affiliated company in the United States. We need legal advice on procedures, documentation, and related considerations.
Answer:
- According to Article 2, Clause 2 of Circular 37/2013/TT-NHNN, the condition for borrowing funds abroad is that the economic organization must obtain permission from the Prime Minister.
- Specific components of the application for borrowing funds abroad are regulated in Article 7 of Circular 37/2013/TT-NHNN (amended by Clause 1, Article 17 of Circular 29/2015/TT-NHNN).
- Regarding the procedures for registering borrowing funds abroad, Article 8 of Circular 37/2013/TT-NHNN stipulates two main steps: Firstly, the lending party must submit a complete set of documents to the State Bank of Vietnam within 30 days from the signing date of the loan agreement. Secondly, within 30 days from receiving a valid application, the State Bank of Vietnam will issue a confirmation or refusal notice to the lending party, providing reasons for refusal if applicable.
Note: In practice, lending funds abroad from Vietnam is very challenging and complex because it requires approval from the Prime Minister. Many companies have applied for permission to lend funds abroad, but most have not been successful. The main reason is the inherent risks associated with this activity, hence governmental authorities do not encourage such operations.
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