May a Non-Credit-Institution Enterprise Lend Money to Another Enterprise?

Short answer: An enterprise that is not a credit institution is permitted to lend money to another enterprise, provided that the lending is not regular and does not have a business nature. Interest is agreed by the parties but may not exceed 20%/year under Article 468 of the Civil Code 2015. Note: the current legal basis is the Law on Credit Institutions 2024 (No. 32/2024/QH15, effective 01 July 2024), replacing the Law on Credit Institutions 2010.

1. May an enterprise lend money to another enterprise?

Under Clause 17, Article 4 of the Law on Credit Institutions 2024 (No. 32/2024/QH15), banking activities are defined as the regular business and provision of one or more of the following operations: taking deposits; granting credit; and providing payment services via accounts.

At the same time, Clause 2, Article 15 of this Law prohibits the following: “Organizations and individuals that are not credit institutions or foreign bank branches conducting banking activities, except for margin transactions and securities repurchase transactions of securities companies.”

Thus, the decisive factor is whether the lending has a business nature and is conducted regularly:

• If the enterprise treats lending as a profit-generating business activity carried out continuously and regularly, that is “banking activity” and is prohibited for non-credit institutions;
• If the enterprise merely uses idle capital to lend to another enterprise in specific cases, not regularly and not for the purpose of doing business from lending, then it is not considered banking activity and does not violate the Law on Credit Institutions 2024.

The Civil Code 2015 has an entire regime on asset loan contracts and does not prohibit enterprises from lending. Tax law also indirectly acknowledges this: Point b, Clause 9, Article 5 of the Law on Value-Added Tax 2024 (No. 48/2024/QH15) and Point b, Clause 4, Article 4 of Decree No. 181/2025/ND-CP provide that lending activities of taxpayers that are not credit institutions are not subject to value-added tax.

Conclusion: Lending between two enterprises that are not credit institutions is lawful if it is not regular and does not have a business nature.

2. Interest rate regulations for enterprise-to-enterprise lending

Pursuant to Article 468 of the Civil Code 2015:

“1. The lending interest rate shall be agreed by the parties.

Where the parties agree on an interest rate, the agreed interest rate may not exceed 20%/year of the loan amount, unless otherwise provided by relevant laws…”

“2. Where the parties agree on interest payment but do not clearly determine the interest rate and a dispute arises over the interest rate, the interest rate shall be determined at 50% of the maximum rate prescribed at Clause 1 of this Article at the time of repayment.”

Thus, the maximum interest rate the parties may agree in a loan contract is 20%/year; any interest exceeding this rate is ineffective. Where the parties agree on interest payment but do not clearly determine the rate and a dispute arises, 50% of the above maximum rate applies.

3. Payment methods in lending, borrowing, and debt repayment transactions between enterprises

Pursuant to Article 4 of Circular No. 09/2015/TT-BTC, enterprises that are not credit institutions, when conducting mutual lending, borrowing, and debt repayment transactions, may not pay in cash and must use non-cash payment methods, including:

• Payment by check;
• Payment by payment order – money transfer;
• Other appropriate non-cash payment methods under current regulations.

For lending or borrowing in assets (not money), debt set-off, or transfer of debt obligations, the laws on enterprises apply.

Notes on applying the current laws

This article belongs to the Corporate & M&A Knowledge group and is presented for reference, helping readers understand the legal issue at a general level before preparing dossiers or carrying out transactions.

Laws and regulations may change depending on the time, locality, type of dossier, and specific circumstances. Where the precise applicable legal basis for your dossier needs to be determined, you should contact ANT Legal’s lawyers at 0966.475.966 for verification and advice before proceeding.

Common risks to note

• Applying legal instruments that have been amended, supplemented, or replaced (for example, still citing the Law on Credit Institutions 2010 while the 2024 Law has been effective since 01 July 2024).
• Lending regularly with a business nature without recognizing the risk of being deemed unauthorized banking activity.
• Agreeing an interest rate above the 20%/year cap, resulting in the excess portion being ineffective.
• Settling loan amounts in cash between enterprises, contrary to the non-cash payment regulations.

How can ANT Legal help?

ANT Legal assists with reviewing specific situations, checking dossiers, determining the applicable legal basis, advising on solutions, and representing clients before individuals, organizations, or competent authorities where necessary.

For quick advice, you may contact our lawyers at 0966.475.966.

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