Under the amended Ordinance on Foreign Exchange, a Vietnamese entity (Vietnamese Guarantor) can only guarantee  for obligations of an offshore entity if it obtains an approval by the Prime Minister for doing so. Obtaining a Prime Minister’s approval makes it considerably difficult for a company in Vietnam to issue a guarantee for obligations of an offshore company (e.g. the parent company of a Vietnamese subsidiary). Circular 37/2013 of the State Bank of Vietnam (SBV) which takes effect from 14 February 2014 provides further guidance on an offshore guarantee by a Vietnamese Guarantor. In particular, 

• Circular 37/2013 provides that the obligations to be guaranteed by a Vietnamese Guarantor need to be “financial obligations” (nghĩa vụ tài chính). There is no definition of financial obligations. It is not clear if this means that offshore guarantees for non-financial obligations can be issued without obtaining Prime Minister’s approval;
  
• Circular 37/2013 requires the Vietnamese Guarantor to open a special account to pay for the guaranteed obligations and to receive reimbursement payment by the guaranteed entity; and
  
• Circular 37/2013 requires the Vietnamese Guarantor to register the repayment obligations by the offshore guaranteed entity with the SBV after the Vietnamese Guarantor’s paying the guaranteed amount to the beneficiary.