On 30 December 2022, the State Bank of Vietnam (SBV) issued Circular 20 guiding activities of one-way money transfer from Vietnam to abroad and payment, money transfer for other current transactions of institutional residents and individual residents (Circular 20/2022), which took effect from 15 February 2023. In this post, we summarise certain key points of Circular 20/2022.

1. Permitted purposes and transfer limits

Iinstitutional residents

1.1. For the first time, the SBV provides a detailed guidance on permitted one-way overseas money transfer purposes and overseas money transfer limits applicable to organizations. In general, organizations may transfer money abroad for (i) providing financial sponsorship and aid, (ii) giving rewards to overseas non-residents participating in programs and contests held in Vietnam, and (iii) other purposes using funding sources received from overseas non-residents, including allocating funds to overseas participants of scientific research projects and topics, and refunding sponsorship money for projects in Vietnam under commitments and agreements with foreign parties.

1.2. The specific foreign currency amount permitted to be transferred will base on the supporting documents. However, if the transfer is for financial sponsorship and aid for programs, funds and projects for the development in the field of culture, education (i.e. scholarship funding) and health, the transferred amount for each time will be limited at USD 50,000 (or an equivalent amount in other foreign currencies). Circular 20/2022 does not impose any specific limit for remaining purposes.

Individual residents

1.3. The table below sets out the purposes and limit which an individual resident can transfer abroad:

Permitted purposes	Overseas money transfer limit	Remarks
1.3.1 Study or medical treatment in foreign countries	1.3.2. Based on the expenses stated in the notices of the foreign parties; or 1.3.3. In the absence of the above notice, bank will decide on the basis of reasonable needs of individuals and suitable purposes, and must not exceed the GDP per capita of the countries where the beneficiaries are living (updated annually) (see 1.4).	This limit is clearer and higher than the limit provided under Circular 20/2011.[1] Circular 20/2011 limits an individual to purchase up to USD 100/person/day or an equivalent amount in other foreign currency during the 10-day-period of staying abroad.
1.3.4. Business trips, travelling or visits to foreign countries	Based on the reasonable needs of individuals but must not exceed the GDP per capita of the countries where the beneficiaries are living (updated annually).
1.3.5. Payment of charges or fees to foreign countries	Based on the expenses stated in the notices of the foreign parties
1.3.6. Assistance for relatives in foreign countries	1.3.7. Based on the basis of reasonable needs of individuals and suitable for the purposes of supporting living expenses and stabilizing the life of overseas beneficiaries; and 1.3.8. Must not exceed the GDP per capita of the countries where the beneficiaries are living (updated annually) (see 1.4).	These regulations are stricter than those of Circular 20/2011. In particular, Circular 20/2011 only provides that individuals may buy foreign-currency cash from licensed credit institutions for purposes 1.3.5 – 1.3.13 depending on the latter’s foreign-currency cash sources.
1.3.9. Transfer in case of inheritance	Based on the value of properties inherited by the heirs
1.3.10. Money transfer in case of immigration	1.3.11. Based on the value of properties of immigrants formed in Vietnam before becoming a citizen of the foreign country or before being eligible for residing abroad. 1.3.12. In respect of immigration expenses, the amount to be transferred will base on the expenses specified in the notices of foreign countries.
1.3.13. One-way money transfer to meet other lawful needs	Circular 20/2022 is silent on this purpose and transfer limit.	In absence of such guidance, it appears from Articles 9.2 and 16.2(b) that the transfer will be subject to the relevant bank’s interal rules and policies as to the permitted lawful purposes and transfer limit.

[1] Circular 20 of the SBV dated 29 August 2011 on purchase and sale of foreign currencies between individuals and licensed credit institutions (Circular 20/2011), which is replaced by Circular 20/2022.

1.4. Below is the GDP per capita in USD for the year 2021, which is the latest information published on World Bank’s website, of some countries:

Country	GDP per capita (USD) - 2021
United States	70,248.6
Australia	60,443.1
Canada	51,987.9
Germany	51,203.6
China	12,556.3
Singapore	72,794.0

2. Sources of money

2.1. Foreign currencies transferred abroad by organizations must come from either of the following sources: (i) foreign currencies available on payment accounts; (ii) term deposits in foreign currencies; or (iii) foreign currencies purchased from licensed banks.

2.2. The sources of foreign currencies used for transfer overseas by individuals include (i) the aforementioned sources, and (ii) savings in foreign currencies, and (iii) own foreign currencies source.

3. Further guidance on payment and money transfer for other current transactions

3.1. Circular 20/2022 further clarifies “the payment and money transfer for other current transactions” of organisations and individuals prescribed under Article 4.6(g) of the Foreign Exchange Ordinance 2005 to include the payment transactions relating to:

3.1.1. international sale activities such as temporary import/export, re-export, re-import, transit, sales agent, processing of goods, sale and purchase of goods via Commodity Exchange;

3.1.2. social insurance contributions and social insurance payment;

3.1.3. insurance/reinsurance premiums, insurance compensation and benefits, etc.;

3.1.4. legally effective decisions or judgments of courts or arbitrations, or decisions of competent Vietnamese authorities; and

3.1.5. fines and compensation for property damage or injury that have not been covered by insurance.

This post is written by Nguyen Thuc Anh and edited by Hoang Thi Thanh Thuy.

Vietnam Business Law