What forms can Vietnamese enterprises borrow from abroad? What is a self-borrowed and self-paid foreign loan?

In what forms can Vietnamese businesses borrow from abroad? What is a self-borrowed and self-paid foreign loan?

In what forms can Vietnamese businesses borrow from abroad?

According to the provisions of Clause 1, Article 3 of Decree 219/2013/ND-CP:

1. Foreign borrowing is when the Borrower receives credit from a non-resident through the signing and implementation of foreign loan agreements in the form of loan contracts, deferred payment sales contracts, loan entrustment contracts, financial leasing contracts or issuance of debt instruments by the Borrower.

Accordingly, Vietnamese enterprises can borrow from foreign countries from non-residents in Vietnam through the following forms:

– Loan contract;

– Goods import contract with deferred payment;

– Loan entrustment contract;

– Financial leasing contract;

– Issuing debt instruments (bills, promissory notes, bonds) on the international marketWhat is a self-borrowed and self-paid foreign loan?According to the provisions of Clause 2, Article 3 of Decree 219/2013/ND-CP, self-borrowing and self-payment of foreign loans, also known as foreign loans not guaranteed by the Government, means that the borrower borrows from abroad in the self-borrowing method and is responsible for repaying the debt to the foreign lender.

In addition, foreign debt in the form of self-borrowing and self-payment (hereinafter referred to as “self-borrowing and self-payment foreign debt”) are amounts that must be repaid, including principal and interest arising from self-borrowing and self-payment of foreign loans by the Borrower in accordance with the provisions of Vietnamese law.

When will the Prime Minister decide to activate appropriate measures to manage and repay foreign debt by self-borrowing and self-payment?

Pursuant to Article 4 of Decree 219/2013/ND-CP on principles for managing foreign loans and debt repayment of enterprises that are not guaranteed by the Government:

Management principles

1. The Government manages foreign loans by self-borrowing and self-payment within the framework of national foreign debt management, ensuring debt safety within the limits approved by competent authorities, ensuring national financial security and macroeconomic balance of the economy.

…

3. Self-borrowed and self-paid foreign loans in the form of imported goods on deferred payment must be in accordance with foreign exchange management policies, trade policies and other relevant legal regulations.

4. The borrower is solely responsible before the law for signing and implementing the self-borrowing and self-repaying foreign loan contract. The Government is not responsible for the borrowing and self-payment of foreign debt by the Borrowing Parties.

5. The policy of managing foreign loans and self-borrowing and self-payment of foreign debt must be coordinated with domestic credit management policies to ensure the objectives of monetary policy and foreign exchange management policy in each period.

6. In case of necessity, to ensure national financial and monetary security and maintain debt safety norms, the Prime Minister decides to apply appropriate measures to manage borrowing and self-borrowing and self-payment of foreign debt.

Thus, in case of necessity, to ensure national financial and monetary security and maintain debt safety norms, The Prime Minister decided to apply appropriate measures to manage foreign loans and self-borrowing and self-payment of debt.

Is the organization of training and professional development in foreign loan management by self-borrowing and self-payment within the content of state management?

Pursuant to Article 5 of Decree 219/2013/ND-CP on the content of state management of foreign borrowing and self-borrowing and self-payment of debt:

Content of state management on foreign borrowing and self-borrowing and self-payment activities

1. Develop, promulgate and organize the implementation of legal documents on management of foreign loans and self-borrowing and self-payment of debt.

2. Monitor cash flows related to foreign borrowing and self-borrowing and self-payment to serve the synthesis of the international balance of payments, monetary policy administration and foreign exchange management.

3. Synthesize and report information on foreign loans by self-borrowing and self-payment.

4. Propagate and disseminate policies and laws on management of foreign loans by self-borrowing and self-payment.

5. Inspect, examine and supervise compliance with the law on management of foreign loans by self-borrowing and self-payment.

6. Organize training and fostering professional skills in foreign loan management by self-borrowing and self-payment.

7. Handling violations, resolving complaints and denunciations in implementing the provisions of law on management of foreign loans by self-borrowing and self-payment.

Thus, the organization of training and fostering professional management of foreign loans by self-borrowing and self-payment belongs to the content of state management of foreign borrowing and repayment activities by self-borrowing and self-payment according to regulations.