Guidelines for foreign exchange management for foreign direct investment

The State Bank of Vietnam has issued Circular No. 06/2019/TT-NHNN providing guidance on foreign exchange management for foreign direct investment activities in Vietnam.

Accordingly, foreign investors and Vietnamese investors are allowed to contribute investment capital in foreign currencies and Vietnamese Dong according to the investor's capital contribution level in the Investment Registration Certificate, the Establishment and Operation License in accordance with the provisions of specialized laws (for enterprises with foreign direct investment established and operating under specialized laws), the Notice of satisfaction of conditions for capital contribution, share purchase, repurchase of capital contribution of foreign investors, and the PPP contract signed with the competent state authority.

Besides, residents who are Vietnamese investors in enterprises with foreign direct investment are allowed to contribute investment capital with their own foreign currency sources.

Subjects opening and using direct investment capital accounts include:

• Enterprises with foreign direct investment capital;
• Foreign investors participating in BCC contracts, foreign investors directly implementing PPP projects in case of not establishing a project enterprise (hereinafter referred to as foreign investors directly implementing PPP projects).

Regarding the transfer of capital, profits and legal income abroad

1. Foreign investors must transfer abroad through direct investment capital accounts:

a) Direct investment capital when reducing investment capital; transferring investment projects (except for the case of payment for the transfer value of shares, capital contributions at enterprises with foreign direct investment capital between non-resident investors or between resident investors); ending, liquidating, terminating the operation of investment projects, BCC contracts, PPP contracts according to the provisions of the law on investment;

b) Principal, interest and foreign loan costs (except for foreign loans in which the currency of the loan does not correspond to the currency used by the foreign direct investment enterprise to open the direct investment capital account), profits and legal sources of income related to direct investment activities in Vietnam.

2. In case a foreign direct investment enterprise must close its direct investment capital account due to dissolution, bankruptcy, termination of the enterprise's existence or due to the transfer of an investment project that changes the initially registered legal entity of the foreign direct investment enterprise, the foreign investor is allowed to use the foreign currency payment account, the Vietnamese Dong payment account of that foreign investor opened at a licensed bank to conduct foreign currency purchase transactions, transfer direct investment capital and legal sources of income abroad.