The State Bank of Viet Nam has issued Circular No. 06/2019/TT-NHNN concerning foreign exchange management for foreign direct investment activities in Viet Nam.
The Circular, scheduled to take effect since September 6, 2019, regulates such activities like capital contribution, opening and use of foreign currency and Viet Nam Dong direct investment capital accounts, transfer of capital, profits and lawful incomes abroad, and transfer of investment capital, and transfer of investment projects.
Applicable subjects include: (i) foreign-invested enterprises as specified in clause 2, article 3 of the Circular, (ii) local and foreign investors in foreign-invested enterprises, (iii) foreign investors that are parties to business cooperation contracts, (iv) foreign investors that are parties to public-private partnership, and (v) organizations and individuals involving in foreign direct investment in Viet Nam.
The guidance (Circular 06/2019/TT-NHNN) reflects changes that:
- Expand the definition of foreign direct investment enterprises that are subject to direct investment capital account requirements
- Provide clearer guidelines on opening and use of direct investment capital accounts
- Set out circumstances when foreign direct investment enterprises are no longer required to maintain direct investment capital accounts and their foreign members or non-resident shareholders are required to open indirect investment capital accounts
- Clarify the currency and payment for capital transfer transactions (for instance, mergers and acquisitions) in foreign direct investment enterprises
- Relax the requirement on inward remittance of funds for the payment of pre-investment expenditures
There is a 12-month transition period to complete the conversion to the appropriate capital accounts (that is, by 6 September 2020)
To be advised more details, foreign investors should contact GBS – A business and legal services company in Vietnam at +84903189033 or visit the website: https://gbs.com.vn