Registration Services For Medium- And Long-Term Foreign Loans

OVERVIEW OF MEDIUM- AND LONG-TERM FOREIGN LOANS

A self-borrowed and self-repaid medium- or long-term foreign loan (hereinafter referred to as a medium- and long-term foreign loan) is a foreign loan with a term exceeding one year and is not guaranteed by the government.

What is the registration of a foreign loan?
The registration of a foreign loan is an administrative procedure conducted by enterprises with the State Bank of Vietnam for medium- and long-term foreign loans or short-term loans extended such that their total term exceeds one year.

Foreign loans subject to mandatory registration
The following types of foreign loans must be registered with the State Bank of Vietnam:

• Medium- and long-term foreign loans;
• Short-term loans extended beyond their original repayment term such that the total loan term exceeds one year;
• Short-term loans without an extension agreement but with outstanding principal (including interest capitalized into principal) at the end of one year from the first disbursement date, except where the borrower fully repays the outstanding principal within 30 working days from the one-year mark.

PURPOSES AND CONDITIONS FOR OBTAINING FOREIGN LOANS

For short-term foreign loans

• Restructuring existing foreign debts and settling short-term liabilities payable in cash (excluding domestic loan principal) of the borrower.

For medium- and long-term foreign loans

• Implementing the borrower’s investment projects;
• Executing production and business plans or other projects of the borrower;
• Restructuring the borrower’s foreign debts.

Conditions for using foreign loan funds
The use of foreign loan funds by the borrower must comply with:

• The scope of business activities registered by the enterprise, as specified in the Certificate of Business Registration, Investment License, Investment Registration Certificate, or equivalent legal documents as per the law;
• Other lawful activities specified in current legal documents regulating the charter and operations of the borrower.

PROCESS FOR PROVIDING MEDIUM- AND LONG-TERM FOREIGN LOAN REGISTRATION SERVICES

The medium- and long-term foreign loan registration service involves consulting and conducting the procedures required to register such loans in compliance with the legal regulations of Vietnam.

Phase 1: Information Collection

Prepare all necessary information to compile the registration dossier for the medium- and long-term foreign loan.

Vinasc collects information about the proposed loan registration, including the following key details:

1. Loan Information:

No.	Lender	Borrower	Loan Amount	Loan Term	Loan Purpose	Other Notes (Provide details on the loan status: Contract signed/Projected/Disbursed yet?, Disbursement and repayment status, if applicable, etc.)
…	…	…	…	…	…	…

 

Phase 2: Preparation of Documents for Medium- and Long-Term Loan Registration Services

Attach the loan contract.
Both parties discuss and agree on the service content. Vinasc prepares the necessary documents based on this agreement and submits them to the enterprise for verification.
Vinasc collects the verified documents along with any additional materials required from the enterprise to complete the dossier.

Phase 3: Online Account Registration for Enterprises

The enterprise accesses the website https://qlnh-sbv.cic.org.vn/qlnh/, creates an account, fills out the required information, submits a registration request, and files a valid account request form.

• Timeline: Within three working days from the date of receiving the valid account request form.
• Outcome: The State Bank issues an account and notifies the enterprise via the registered email address.

Phase 4: Submission of the Medium- and Long-Term Foreign Loan Registration Dossier

Vinasc submits the medium- and long-term foreign loan registration dossier to the State Bank. As per regulations, the dossier must be submitted within:

• 30 working days from the signing date of the medium- or long-term foreign loan agreement.
• 30 working days from the signing date of the agreement to extend a short-term loan into a medium- or long-term loan, where the extension agreement is signed within one year from the first disbursement date.
• 30 working days from the issuance date of the enterprise’s business registration certificate, establishment and operation license under specialized law, investment contract signing date under the public-private partnership (PPP) method, or the date when parties sign a foreign loan agreement to convert pre-investment capital into loans (whichever occurs later), applicable for loans arising from converting pre-investment capital of projects into foreign loans.
• 60 working days from the one-year mark of the first disbursement date for:
  • Short-term loans converted into medium- or long-term loans where the extension agreement is signed after one year from the first disbursement date.
  • Short-term loans without an extension agreement but with outstanding principal (including capitalized interest) at the one-year mark from the first disbursement date.

Phase 5: Confirmation or Rejection of Loan Registration by the State Bank

The State Bank provides written confirmation or rejection (with reasons stated) for the loan registration within:

• 12 working days from the date of receiving a complete and valid dossier if the borrower has declared the loan information on the online portal.
• 15 working days from the date of receiving a complete and valid dossier if the borrower has not declared the loan information on the online portal.
• Completion Timeline: Unspecified.
• Outcome: Written confirmation of loan registration.

Phase 6: Completion of Medium- and Long-Term Loan Registration Services

Vinasc reviews the entire service process to ensure comprehensive completion.
The enterprise receives all specific results collected by Vinasc during the service provision.

RESULTS OF THE MEDIUM- AND LONG-TERM FOREIGN LOAN REGISTRATION SERVICE

• Written confirmation of loan registration.
• The loan is assigned a unique code and stored in the State Bank’s database for foreign loans and repayments not guaranteed by the government.

ESTIMATED COMPLETION TIME

• As per regulations: 12 to 15 working days from the receipt of a complete and valid dossier.
• In practice: The estimated timeframe may vary depending on the processing speed of the relevant authorities. Vinasc does not commit to a specific timeline.

LIST OF DOCUMENTS REQUIRED FOR THE REGISTRATION SERVICE OF MEDIUM- AND LONG-TERM FOREIGN LOANS

No.	Document details	Responsible Party
		Client (1)	Vinasc Group (2)	Vinasc Group on behalf (3)
1	Loan Account Registration Declaration Form		X
2	Foreign Loan Registration Application		X
3	Copy of the Borrower’s Enterprise Registration Certificate	X		X
4	Copy of the Borrower’s Investment Registration Certificate	X		X
5	Copy or original documents proving the loan purpose, including: 1.      For loans to implement an investment project: Investment Certificate, Investment Registration Certificate, or Decision on Investment Policy Approval under the investment laws. 2.      For loans to implement other production and business plans not classified as investment projects: Plan for utilizing foreign loan funds. 3.      For loans to restructure the borrower’s foreign debts: Debt restructuring plan for the borrower’s foreign loans. 4.      For extended short-term loans: Report on the utilization of the initial short-term foreign loan meeting the conditions for short-term foreign loans (accompanied by supporting documents such as foreign loan utilization plan or foreign debt restructuring plan).	X		X
6	Foreign Loan Agreement/Agreement to extend a short-term loan into a medium- or long-term loan Foreign language copy and its Vietnamese translation.	X		X
7	Confirmation from the account service bank regarding disbursement and repayment status (principal and interest) up to the date of loan registration. For loans that have already been disbursed.	X
8	Power of attorney for individuals or organizations to perform the procedures (if applicable).		X

(*) According to the process, the client is responsible for preparing the documents listed in column (1), and Vinasc is responsible for the documents listed in column (2).
(*) In cases where the client encounters difficulties in preparing the required documents, Vinasc can prepare the documents in column (3) on their behalf. However, this depends on specific circumstances and may result in the following:

• Additional costs for document preparation (these costs may vary depending on the state agency and changes in Vietnamese laws over time).
• Extra time required for document preparation.

(*) During the preparation phase, the client must scan all the documents listed above to enable Vinasc to prepare the application promptly.
(*) In certain situations, state agencies may request additional information to supplement the application.

ADVISORY ON DOCUMENTS REQUIRED FOR FOREIGN LOAN REGISTRATION SERVICES

This section helps clients better understand the preparation of necessary documents. Details are as follows:

1. Proof of loan purpose:

• Case: Loans for other production and business plans not classified as investment projects.
  • A foreign loan utilization plan: A plan detailing the production and business activities funded by the foreign loan, demonstrating the borrower’s legitimate and reasonable loan purpose and need. This should include three main parts:
    1. Information about the borrower (including details of the legal scope of their business and production activities related to the loan purpose);
    2. Details of the proposed foreign loan;
    3. Purpose and scale of the foreign loan.
  • For short-term foreign loans: A list of short-term foreign loan utilization needs.
  • For medium- and long-term foreign loans: Comprehensive information on production and business funding, capital structure, the scale of foreign loans, and expected expenses covered by medium- and long-term foreign loan funds.
• Case: Loans to restructure the borrower’s foreign debts.
  • A foreign debt restructuring plan: A summary of how the new foreign loan will be used to repay existing legal foreign debts. This should include:
    1. Information about the borrower;
    2. Details of the existing loan and outstanding debt;
    3. Details of the new foreign loan.
• Case: Conversion of short-term foreign loans into medium- or long-term foreign loans.

1. 1. A report on the utilization of the initial short-term foreign loan in compliance with short-term foreign loan regulations, including:
      • Loan purpose;
      • Loan limits.
   2. Accompanied by supporting documents such as:
      • A foreign loan utilization plan; or
      • A foreign debt restructuring plan.

2. Confirmation from the account service bank regarding disbursement and repayment status (principal and interest) up to the date of loan registration.

• Case: Loans to restructure foreign debts.
  A document from the account service bank detailing the disbursement and repayment status of the loan to be restructured using foreign loan funds.
• Case: Conversion of short-term foreign loans into medium- or long-term foreign loans.
  A document from the account service bank detailing the disbursement and repayment status of the initial short-term foreign loan.

RISKS OF NON-COMPLIANCE OR IMPROPER COMPLIANCE IN FOREIGN LOAN REGISTRATION PROCEDURES

Based on Article 47(1) and Article 23(3)(g) of Decree 88/2019/ND-CP:

1. Borrowers must submit monthly reports to the State Bank online via qlnh-sbv.cic.org.vn. Failure to submit reports or submitting them late may result in fines ranging from VND 10,000,000 to 20,000,000 for organizations.
2. For short-term loans converted into medium- or long-term loans, borrowers must register the loan within the legally specified timeframe. Failure to comply with administrative procedures for registration or changes in foreign loans can result in fines ranging from VND 40,000,000 to 60,000,000 for organizations.
3. Non-compliance may also directly impact future foreign fund transfers.

POST-REGISTRATION PROCEDURES FOR MEDIUM- AND LONG-TERM FOREIGN LOANS

Although these procedures are beyond the scope of the Foreign Loan Registration Service, they must be performed immediately after registration or in cases of changes. We highlight these for businesses to manage and comply effectively:

1. Monthly foreign loan reporting:

• By the 5th of each month, borrowers must submit online reports detailing the implementation of short-, medium-, and long-term loans on the online portal.
• If the online portal encounters technical issues, borrowers must submit physical reports using the form in Appendix 05 of Circular 12/2022/TT-NHNN.

2. Registering changes in foreign loans:

• If there are changes to any content outlined in the registration confirmation document, the borrower must register these changes with the State Bank (except in cases where registration of changes is not required).
• Timeline: Within 30 working days from the date of signing the agreement with changes or updating the changed information.

Contact Vinasc for the best advice and support regarding the services mentioned above.