In accordance with the Constitution of the Socialist Republic of Vietnam of 1992, as amended by Resolution 51/2001/QH10 of the 10th Session of the 10th National Assembly dated December 25, 2001, and the adjustments to the legal construction items made by Resolution 42/2005/QH11 of the 7th Session of the 11th National Assembly dated June 14, 2005, and the Regulation issued in 2005; this Regulation regulates foreign exchange activities.
Chapter I General Provisions
Article 1 Scope of Adjustment
This Regulation regulates foreign exchange activities within the territory of the Socialist Republic of Vietnam.
Article 2 Applicable Objects
1. Organizations and individuals engaging in foreign exchange activities in Vietnam, including residents and non-residents.
2. Other entities related to foreign exchange activities.
Article 3 Vietnam’s foreign exchange management policy
In order to promote and safeguard the legitimate rights and interests of organizations and individuals that contribute to Vietnam’s economic development and engage in foreign exchange activities, the State implements foreign exchange management policies; implements a national monetary policy aimed at improving the convertibility of the Vietnamese Dong; ensures that the Vietnamese Dong is the only legal currency in Vietnam; fulfills the commitments made by the Socialist Republic of Vietnam on the road to international economic integration; strengthens the State’s management of foreign exchange activities; and improves Vietnam’s foreign exchange management system.
Interpretation of Article 4
The terms used in these Regulations shall be interpreted as follows:
1. “Foreign exchange” includes:
(1) foreign currency, the common currency of the European Union or other common currencies used for international and regional settlements (hereinafter referred to as “foreign currency”);
(2) foreign currency payment methods, including checks, payment cards, bills of exchange, promissory notes and other payment methods;
(3) Foreign currency securities, including government bonds, corporate bonds, term bonds, stocks and other securities;
(4) Gold in the national foreign exchange reserves and gold in residents’ overseas accounts; gold bars, ingots, grains and coins brought into or out of Vietnam;
(4-1) Currency of the Socialist Republic of Vietnam in circulation that is remitted into or out of Vietnam or used as a means of international settlement.
2. “Residents” refers to the following organizations and individuals:
(1) Credit institutions established and operating in Vietnam (hereinafter referred to as “Credit Institutions”);
(2) Economic organizations established and operating in Vietnam, except for those specified in item (1) (hereinafter referred to as “economic organizations”);
(3) Vietnamese State organs, armed forces, political organizations, socio-political organizations, socio-political industry organizations, social organizations, socio-professional institutions, social funds and charitable funds operating in Vietnam;
(4) Vietnamese diplomatic missions and consular missions operating abroad;
(4-1) Representative offices of organizations listed in items (1), (2) and (3) operating abroad;
(5) Vietnamese citizens residing in Vietnam; Vietnamese citizens who have lived abroad for less than 12 months; Vietnamese citizens working in organizations listed in items (4) and (4-1) and their accompanying persons;
(6) Vietnamese citizens who are traveling, studying, seeking medical treatment or visiting relatives in foreign countries;
(7) Foreigners who have resided in Vietnam for more than 12 months, except for those who are studying, seeking medical treatment, travelling or working in diplomatic missions, consular offices or representative offices of foreign organisations.
3. “Non-residents” refers to organizations and individuals other than “residents”.
4. “Capital transactions” means the transfer of funds between resident and non-resident persons in the following areas:
(1) Direct investment;
(2) Investment in securities;
(3) Borrowing and repaying external debts;
(4) Lending money to others and collecting debts;
(4-1) Other forms of investment in accordance with the current laws of Vietnam.
5. “Current transactions” refer to transactions between residents and non-residents for the purpose of transferring funds.
6. Payment and money transfer for transactions include:
(1) Payments and money transfers for the import and export of goods and services;
(2) Short-term financing and commercial loans;
(3) direct and indirect investment income;
(4) Allowing for the transfer of funds resulting from the reduction of direct investment funds;
(4-1) Principles of external lending: installment payment and interest payment;
(5) Unilateral remittance for consumption purposes;
(7) Other similar transfers.
7. “Unilateral remittance” refers to the inflow or outflow of foreign funds into or out of Vietnam through banks, financial post offices, etc., for the purpose of supporting or helping relatives or for personal expenses not related to the import or export of goods or services.
8. “Foreign exchange activities” refer to the use of foreign exchange by residents and non-residents in Vietnam for transactions, capital transfers, provision of foreign exchange services and other foreign exchange-related activities.
9. “Vietnam Dong Exchange Rate” means the price of a unit of foreign currency converted into the local currency of Vietnam Dong.
10. “Cash foreign currency” includes banknotes and coins.
11. “Authorized credit institution” means a bank or non-bank credit institution authorized to engage in foreign exchange activities or provide foreign exchange services in accordance with the relevant provisions of this Regulation.
12. “Foreign direct investment” means the inflow of funds by non-residents into Vietnam for commercial investment activities through establishment, management or participation in the management of an enterprise or other forms in accordance with the current laws of Vietnam.
13. “Foreign indirect investment” means the purchase and sale of securities and any form of capital subscription and share purchase by non-resident persons in accordance with the current laws of Vietnam, but without direct management.
14. “Overseas investment” refers to the act of a resident remitting funds abroad for investment purposes in a manner consistent with the provisions of the laws in force.
15. “External borrowing and debt repayment” refers to the act of borrowing and repaying debts by residents from non-residents in a manner that complies with the provisions of current laws.
16. “External lending and debt collection” refers to the act of lending and collecting debts from non-residents by residents in a manner that complies with the provisions of the current laws.
17. “Balance of international payments” means a set of balance sheets that systematically lists all economic transactions between Vietnam and other countries over a certain period of time.
18. “Foreign exchange market” means the place where foreign exchange is sold and bought. The foreign exchange market in Vietnam includes the inter-bank market and the bank-customer market.
19. “National international reserves” means assets in foreign currencies as reported in the monetary survey of the State Bank of Vietnam.
Article 5 Application of Foreign Exchange Laws, International Treaties, Foreign Laws, and International Practices
1. Foreign exchange activities shall comply with the relevant provisions of these Regulations and other relevant laws.
2. In case an international treaty to which the Socialist Republic of Vietnam is a party contains provisions that differ from those of this Regulation, the provisions of the international treaty shall apply.
3. Where Vietnamese laws do not contain provisions on the regulation of foreign exchange activities, the parties concerned may apply foreign laws, international practices, etc. on the basis of consensus, provided that the application of such foreign laws, international treaties, etc. does not violate the basic principles of Vietnamese laws.
Chapter II Current Transactions
Article 6 Liberalization of current transactions
All transactions, payments and money transfers between residents and non-residents are carried out freely.
Article 7 Payments and Money Transfers for Import and Export of Goods and Services
1. Residents have the right to purchase foreign exchange from authorized credit institutions to pay for the import of goods and services.
2. Residents must deposit all foreign exchange earned from the export of goods and services into a foreign exchange account opened with an authorized credit institution in Vietnam; if they need to deposit foreign exchange abroad, they must obtain approval from the State Bank of Vietnam.
3. All payments and money transfer transactions for the import and export of goods and services shall be carried out through authorized credit institutions.
Article 8 Unilateral Remittance
1. When a person residing in Vietnam transfers money in a one-way manner, he shall deposit it into a foreign exchange account opened in an authorized credit institution in Vietnam, or sell it to an authorized credit institution.
2. Individuals residing in Vietnam who transfer money in a one-way manner shall do so for the purpose of depositing, carrying, paying into a foreign currency account opened in an authorized credit institution in Vietnam or selling to an authorized credit institution; if they are Vietnamese citizens, they have the right to deposit money into a foreign currency deposit account of an authorized credit institution.
3. Residents have the right to purchase, transfer, or carry foreign exchange abroad for legitimate needs.
4. Non-residents and residents who are foreigners with foreign exchange accounts have the right to remit foreign exchange abroad; if they have legal sources of income in Vietnamese dong, they have the right to purchase foreign exchange and remit it abroad.
Article 9 Entry and Exit of Foreign Currency, Vietnamese Dong Cash and Gold
Residents and non-residents who carry foreign currency, Vietnamese Dong and gold in and out of Vietnam in excess of the State Bank of Vietnam limit must comply with the following regulations:
1. If the amount you bring in exceeds the limit, you must declare it when entering the country.
2. If the amount of money carried out of the country exceeds the limit, it must be declared when leaving the country and a documentary proof in accordance with the regulations of the State Bank of Vietnam must be presented.
Article 10 Currency for Current Transactions
Residents have the right to choose Vietnamese Dong, easily convertible foreign currencies or other foreign currencies accepted by authorized credit institutions to pay for current transactions.
Chapter III Capital Transactions
Section 1 Foreign Investment in Vietnam
Article 11 Direct Investment
1. Foreign currency transactions of investment funds remitted into Vietnam and principal transactions of investment funds, profits, interest payments on foreign loans and other lawful income remitted out of Vietnam shall be conducted through foreign exchange accounts opened with authorized credit institutions.
2. Legal sources of income in the form of Vietnamese Dong should be converted into foreign currency that can be remitted overseas through authorized credit institutions.
Article 12 Indirect Investment
1. The foreign currency of the investment capital must be converted into Vietnamese Dong through an authorized credit institution to carry out the investment.
2. Investment funds, profits and other legal sources of income in the form of Vietnamese dong shall be converted into foreign currencies that can be remitted overseas through authorized credit institutions.
(to be continued)