Under Circular 03 of the State Bank dated 26 February 2016 on foreign exchange control of foreign loan and repayment by enterprises, as amended (Circular 03/2016), import of goods with deferred payment is one of forms of foreign loan (“deferred payment foreign loan”).

Definition

Deferred payment foreign loan is defined as the import of goods for which the first drawdown date is prior to the final payment date, in which,

·        The drawdown date is (i) 45th day from the checking completion date of recorded on the customs declaration if the bill of lading is not required by the bank of borrower; or (ii) 90th day from the issuance date of bill of lading if the bill of lading is required by the bank of borrower.

·        The final payment date is (i) the final payment date within the payment term stipulated under the contract; or (ii) the actual final payment date of payment if not made pursuant to the contract or if the contract does not specify a term for payment.

The chart below illustrates how to determine a deferred payment foreign loan and its term. 

No SBV registration required

Under Circular 03/2016, deferred payment foreign loan is not required to be registered with the SBV, regardless it is a short term or mid-long term loan.

Repayment account

 The repayment of a deferred payment foreign loan will be conducted through the following account:

-         current account if the deferred payment foreign loan is short term loan;

-         direct investment capital account if (i) the deferred payment foreign loan is mid-longterm loan, and (ii) the borrower is a foreign invested enterprise (FIE); or

-         foreign loan account if (i) the deferred payment foreign loan is mid-long term loan, and (ii) the borrower is a non-FIE. The borrower can only perform a foreign loan (including deferred payment foreign loan) via one licensed bank, but it can use one foreign loan account for one or multiple foreign loans.

Reporting obligation

The borrower of deferred payment foreign loan must send quarterly report on the loan implementation status to the SBV (via online or in paper) no later than the 5th day of the following month.

This post is written by Tran Kim Chi and edited by Hoang Thi Thanh Thuy.