When should an offshore loan be announced or registered?
When a company established in Vietnam borrows money from an organization in a foreign country, the loan is considered as an offshore loan. The State Bank of Vietnam (“SBV”) controls offshore loans as a part of its control on foreign currency exchange.
If the term of the offshore loan is under 12 months (short-term), the borrower has an obligation to announce the information about such loan to the SBV. When the term is longer than 12 months or if a short-term loan is extended or not repaid in time, procedures for registration must be conducted. The term is measured from the date of the initial drawdown to the date of the full repayment.
Periodic reports are also mandatory to keep the authority updated on the offshore loan repayment schedule and scheme.
How to proceed?
Vietnamese law provides for “leasehold” and not “freehold. Foreign individuals are not allowed to buy land, but they can buy apartments from the developer of the housing construction project or from another foreign individual. They are not allowed to purchase from Vietnamese owners.
Vietnam’s commitments to the WTO on the services detail each kind of service with specific schedules for accession to the local market by foreign investors.
The country is also member of free trade agreements and international treaties opening the market to foreign investments. Finally, the Vietnamese national regulations also open some sectors to foreign investment.
Foreigners can buy shares in Vietnamese companies. However, depending on each specific business sector of such company, foreign ownership might be capped, restricted or change the conditions under which the company operates.