Is using and paying in foreign currency allowed in Vietnamese territory? What are the provisions of the law?

Are there any other cases where foreign exchange can be used in the territory of Vietnam?

Pursuant to Article 4 of Circular 32/2013/TT-NHNN regulating cases where foreign exchange can be used in the territory of Vietnam Nam as follows:

– Customs agencies, police, border guards and other State agencies at Vietnam’s border gates and bonded warehouses are listed in foreign currency and collect in foreign currency transfer or cash from non-residents for taxes, entry and exit visa fees, service provision fees and other fees and charges as prescribed by law.

– Banks, non-bank credit institutions, foreign bank branches licensed to do business and provide foreign exchange services (hereinafter referred to as licensed credit institutions) are allowed to transact, make payments, list, advertise, quote, set prices, write prices in contracts, and negotiate in foreign exchange within the scope of business and provision of foreign exchange services that have been permitted by the State Bank of Vietnam in accordance with the provisions of law.

– Other organizations permitted to provide foreign exchange services are traded and listed in foreign currency within the scope of providing foreign exchange services that have been permitted by the State Bank of Vietnam in accordance with the provisions of law.

– Residents who are organizations with legal status may transfer internal capital in foreign currency between that organization’s account and the account of a dependent unit without legal status and vice versa.

– Residents can contribute capital in foreign currency by transfer to implement foreign investment projects in Vietnam.

– Residents execute import and export entrustment contracts according to the following regulations:

+ Residents receiving import entrustment can record the price in the import entrustment contract in foreign currency and receive payment in foreign currency for the value of the import contract from the import entrustment party;

+ Residents receiving export entrustment can record the price in the export entrustment contract in foreign currency and pay in foreign currency by bank transfer for the value of the export contract to the export entruster.

– Residents who are domestic contractors or foreign contractors shall comply with the following regulations:

+ For foreign costs related to the implementation of bidding packages through international bidding according to the provisions of the Bidding Law: contractors are allowed to bid in foreign currency and receive payment in foreign currency by transfer from the investor and main contractor for payment, payment and transfer abroad.+ For the implementation of bidding packages according to the provisions of law on oil and gas: contractors are allowed to bid in foreign currency and receive payment in foreign currency by transfer from the investor and main contractor for payment, payment and transfer abroad.

– Residents who are insurance enterprises shall comply with the following regulations:

+ To quote, evaluate, and write the price of insurance services in the contract in foreign currency and receive payment in foreign currency by transfer from the insurance buyer for goods and services that must be reinsurance purchased abroad;

+ In case of loss arising from reinsurance abroad, the resident who is an insurance purchasing organization is entitled to receive compensation in foreign currency transferred from the foreign reinsurance company through the insurance enterprise to pay the costs of overcoming the loss abroad.

– Residents who are organizations selling duty-free goods are allowed to list goods prices in foreign currency and receive payment in foreign currency by bank transfer or cash from the supply of goods. Foreign currency used in transactions at duty-free shops shall comply with the provisions of law on duty-free sales.

– Residents are organizations providing services in quarantine areas at international border gates, bonded warehouse business organizations that are allowed to list, quote, price, record prices in contracts in foreign currency and receive payment in foreign currency by transfer or cash from the provision of goods and services.

– Residents who are organizations acting as agents for foreign carriers on the basis of an agency contract signed between the two parties shall comply with the following regulations:

+ To quote, set prices, and record prices in contracts in foreign currency on behalf of foreign carriers for international freight charges. Payment must be made in Vietnamese Dong;

+ Be able to pay on behalf of foreign currency by bank transfer to pay for goods and services at international seaports and quarantine areas at international airports;

+ Be able to pay foreign currency in cash to pay salaries, bonuses, and allowances to non-residents authorized by foreign shipping lines.

– Residents who are export processing enterprises shall comply with the following regulations:

+ Prices are recorded in contracts in foreign currency and payments are made in foreign currency by bank transfer when purchasing goods from the domestic market to produce, process, recycle, assemble goods for export or for export, except for goods banned from export. Domestic enterprises are allowed to quote and price in foreign currency and receive payment in foreign currency by bank transfer when selling goods to export processing enterprises;

+ Be able to quote, evaluate, record prices in contracts in foreign currency and make payments, receive payments in foreign currency by bank transfer with other export processing enterprises.

– Residents who are business organizations in the fields of air transportation, hotels, and tourism may list and advertise prices of goods and services in Vietnam Dong and equivalent foreign currencies on electronic news websites and specialized publications (excluding menus and service price lists) using only foreign languages.

– Residents and non-residents are organizations that can negotiate and pay salaries, bonuses, and allowances in labor contracts in foreign currency by transfer or cash to non-residents and residents who are foreigners working for that organization.

– Non-residents are diplomatic missions and consular offices listed in foreign currency and collect entry and exit visa fees, other fees and charges in foreign currency by transfer or cash.

Thus, only in some cases in this regulation are allowed to use foreign exchange in the territory according to the law.

Is it possible to use and pay in foreign currency in the territory of Vietnam?

Pursuant to Clause 8, Article 23 of Decree 88/2019/ND-CP stipulating violations of regulations on foreign exchange activities as follows:

“6. Fine from 200,000,000 VND to 250,000,000 VND for one of the following violations:

a) Payment for goods and services in foreign currency not in accordance with the law;

b) Trading and supplying exchange rate and foreign exchange derivative products exchange not in accordance with the law;

c) Trading, quoting, pricing, recording prices in contracts, agreements, listing, advertising prices of goods, services, land use rights in foreign currency not in accordance with the law;

d) Exporting and importing foreign currency cash not in accordance with the law.”

For transactions arising in the territory of Vietnam (except for cases where foreign exchange is used), recording in the contract as foreign currency may also be subject to administrative sanctions.

What are the responsibilities of organizations and individuals conducting foreign exchange activities in the territory of Vietnam?

Pursuant to Article 5 of Circular 32/2013/TT-NHNN stipulating the responsibilities of organizations and individuals conducting foreign exchange activities in the territory of Vietnam as follows:

– Licensed credit institutions and other organizations licensed to provide foreign exchange services are responsible for:

+ Seriously implement and guide customers to implement the regulations in this Circular;

+ Check and retain papers and documents in accordance with actual transactions according to the provisions of this Circular.

– Other relevant organizations and individuals are responsible for strictly implementing the regulations in this Circular.