Press release on issuance of Circular No. 08/2023/TT-NHNN
Hanoi, June 30, 2023 – The Governor of the State Bank of Vietnam (SBV) has issued Circular No. 08/2023/TT-NHNN regulating the conditions for overseas borrowings by enterprises without the Government’s guarantee (Circular No. 08/2023/TT-NHNN replaces Circular No.12/2014/TT-NHNN dated March 31, 2014).
The new Circular comprises of 5 Chapters and 24 Articles with the following main substances: (i) Chapter 1: General provisions; (ii) Chapter 2: General conditions, including conditions for (1) agreement on an overseas borrowing, (2) the currency for the borrowing, (3) guaranteed transactions for an overseas borrowing; (4) the costs for an overseas borrowing; (5) overseas borrowings by the state-owned enterprises; (iii) Chapter 3: Additional conditions, including: Paragraph 1 stipulating the conditions applied to the credit institutions and the foreign bank branches, and Paragraph 2 stipulating the conditions applied to the borrowers who are not credit institutions nor foreign bank branches; (iv) Chapter 4: Responsibilities of the relevant stakeholders; and (v) Chapter 5: Enforcement.
The issuance of Circular No. 08/2023/TT-NHNN is aimed to resolve a number of substances which are no longer appropriate in Circular No.12/2014/TT-NHNN; to supplement a number of regulations on short-term borrowings in order to increase the responsibilities of the enterprises which seek overseas borrowings. In addition, the new Circular also provides specific regulations on the technical matters related to the conditions of borrowing to ensure the clarity and sufficiency, assisting enterprises seeking overseas borrowings; thereby, ensuring the limits of overseas borrowings as approved annually by the Prime Minister. In the process of formulating this Circular, the SBV had taken notes of the comments and recommendations of the stakeholdres directly affected by the Circular, and had considered the practical situations and context to refine and develop specific regulations on the conditions for overseas borrowings by enterprises without the Government’s guarantee.
The new Circular will help to further improve the legal frameworks for overseas borrowings and debt service by enterprises without the Government’s guarantee, be aligned with the the relevant legal documents, such as the Law on Enterprises, the Law on Investment, the Law on Credit Institutions, the regulations on the issuance of corporate bonds, the regulations on forex management over overseas borrowings and debt service by enterprises, etc.
The new Circular will take effect on August 15, 2023.
Translated by Le Hang