Can an investment project be mortgaged under Vietnamese law?

The answer is a qualified “yes”. It is possible to mortgage an investment project under Vietnamese law because:

·         The Investment Law 2020 allows an investor to assign (chuyển nhượng) an investment project in whole and in part. And Decree 31/2021 implementing the Investment Law 2020 expressly provides for the procedures when an investment project is assigned as a result of the enforcement of a security interest including a mortgage.

·         Decree 21/2021 on secured transactions expressly provides the investor of an investment project can mortgage an investment project to the extent such investment project is not prohibited from assignment by the investment regulations. Decree 99/2022 on registration of secured transactions also provide for specific procedures to register a mortgage over investment projects which use land such as residential housing, other construction works, agriculture and forestry development.

·         In practice, it appears that it is common for banks to take mortgage over investment projects.

Read MoreInfo
Comment
Written by Nguyen Quang Vu On In ,

ISSUING L/C BY "CPTPP" BANKS TO RESIDENTS IN VIETNAM

Scenario: An institutional resident in Vietnam intends to open an at sight L/C at a Japanese bank (Offshore L/C Issuer) to import equipment into Vietnam. Can the Offshore L/C Issuer issue the Offshore L/C to the Vietnamese client under Vietnamese laws?

Short answer: Yes, subject to our discussions at 1.2 and 1.3 below.

1.1.         The Offshore L/C Issuer should be able to issue a L/C to a resident in Vietnam if the Offshore L/C Issuer is not regarded as regularly conducting banking business in Vietnam (see 1.2). This is because:

Read MoreInfo
Comment
Written by Lawyers VNLaw On In

NOTABLE CHANGES IN FOREIGN LOAN BOROWING AND REPAYMENT REGULATIONS

Pending the issuance of a new Circular to replace existing Circular 12/2014 on borrowing and repayment of foreign loans of enterprises, on 30 September 2022 (New Foreign Loan Circular), the State Bank of Vietnam (SBV) issued Circular 12/2022/TT-NHNN guiding the management of foreign exchange in respect of the borrowing and repayment of foreign loans by enterprises (Circular 12/2022) which replaced Circular 03/2016/TT-NHNN from 15 November 2022 (as amended) (Circular 03/2016).

Circular 12/2022 is expected to improve the legal framework on enterprises’ borrowing and payment of foreign loans not guaranteed by the Government, simplify the administrative formalities, and provide guidance for certain matters which may be addressed in the New Foreign Loan Circular.

We discuss below some key changes introduced by Circular 12/2022.

Read MoreInfo
Comment
Written by Lawyers VNLaw On In

Certain Questions Regarding Refinancing Of Onshore And Offshore Loans In Vietnam

1. Is it permitted for an onshore loan to be refinanced by another onshore loan?

Short answer: Yes.

1.1. Under Article 8.6 of Circular 39 of the State Bank of Vietnam dated 30 December 2016 on lending by credit institutions and foreign bank branches to clients, as amended (Circular 39/2016), a new onshore loan (New Loan) can be used to refinance an existing loan (either onshore or offshore) (Existing Loan) if all the following conditions are satisfied:

1.1.1. the purpose of the Existing Loan is for business activities;

1.1.2. the term of the New Loan must not exceed the remaining term of the Existing Loan; and

1.1.3. the Existing Loan has not been restructured.

Read MoreInfo
Comment
Written by Nguyen Quang Vu On In