OVERVIEW OF FOREIGN LOAN ACTIVITIES OF VIETNAMESE ENTERPRISES

In practice, to access credit from domestic credit institutions, businesses must comply with safety ratios or relevant credit limits. Foreign loans are playing an increasingly important role in supplementing investment capital and working capital for businesses in Vietnam.

According to current legal regulations on foreign exchange management, unguaranteed foreign loans (hereinafter referred to as “self-borrowed and self-repaid loans“)[1] with a term of over one year (hereinafter referred to as “medium and long-term loans“) must be registered with the State Bank of Vietnam (“SBV”). To maintain focus and conciseness, this article will analyze issues related to medium and long-term loans obtained through loan agreements between borrowing enterprises established and operating in Vietnam – excluding state-owned enterprises, commercial banks, or branches of foreign banks (hereinafter referred to as “borrowing enterprises”)[2] and non-resident lenders. This is the subject and form that we have been and are regularly working with, possessing extensive experience in resolving complex issues arising in practice.

1. Applicable Legal Documents Governing Foreign Loan and Repayment Activities

Foreign loan and repayment activities of borrowing enterprises must comply with relevant regulations in the following key legal documents:

• Decree No. 219/2013/ND-CP dated 26 December 2013, of the Government on the management of foreign borrowing and repayment of enterprises without government guarantee (“Decree 219”);
• Circular No. 08/2023/TT-NHNN dated 30 June 2023, of the SBV stipulating the conditions for foreign loans without government guarantee, as amended by Circular No. 19/2024/TT-NHNN dated 28 June 2024 of the SBV (hereinafter collectively referred to as “Circular 08”);
• Circular No. 12/2022/TT-NHNN dated 30 September 2022, of the SBV guiding the management of foreign exchange for foreign borrowing and repayment activities of enterprises, as amended by Circular 21/2023/TT-NHNN dated 29 December 2023 (hereinafter collectively referred to as “Circular 12”); and
• Circular No. 80/2025/TT-NHNN dated 31 December 2025, of the SBV amending, supplementing several articles of Circular 12 (“Circular 80”).

2. SBV Control over Foreign Loan Activities

SBV is the governing body responsible for managing foreign borrowing and repayment activities of borrowing enterprises operating under the self-borrowing and self-repayment method through the following mechanisms and approaches:

• firstly, borrowing enterprises must adhere to the foreign loan conditions issued by the SBV (currently stipulated in Circular 08), which are aligned with the state management objectives in each period;
• secondly, borrowing enterprises must register medium and long-term foreign loans with the SBV following mandatory procedures (currently stipulated in Article 11 of Circular 12);
• thirdly, borrowing enterprises are responsible for information disclosure, periodic and unscheduled reporting as required by competent authorities, and for maintaining records related to registered loans (as stipulated in Articles 41 and 42 of Circular 12; and Article 19 of Circular 08);
• fourthly, account service providing banks offering account services and guarantee services are only permitted to provide services for receiving loan capital, repaying debts, paying fees, and other money transfer transactions (from abroad into Vietnam or from Vietnam abroad) related to foreign loans that are consistent with the registered content with the SBV and the effective loan agreement.
• fifthly, the Prime Minister annually sets the national commercial foreign borrowing limit. SBV will monitor the registration, disbursement, and repayment of foreign loans while developing appropriate solutions. At the time of registration with the SBV, the value of the medium and long-term loan of the borrowing enterprise, together with the total net loan amount in the year from other medium and long-term loans, must be within the self-borrowed and self-repaid foreign loan limit approved by the Prime Minister.

3. Cases Requiring Registration with the SBV

Borrowing enterprises are responsible for registering foreign loans with the SBV in the following specific cases:[3]

• Firstly, medium and long-term foreign loans with a term (determined from the expected first drawdown date to the expected final principal repayment date) stipulated in the loan agreement of more than 01 year.
• Secondly, short-term loans with an extended principal repayment period where the total loan term (determined from the first drawdown date to the expected final principal repayment date) stipulated in the foreign loan extension agreement is more than 01 year.
• Thirdly, short-term loans without an extension agreement but with outstanding principal balance (including capitalized interest) at the time of reaching 01 year from the first drawdown date.

For the second and third cases, if the borrowing enterprise completes the principal repayment of the short-term loan (including cases where the entire outstanding principal is converted into shares or capital contributions of the lender in the borrower, or where the borrower is fully released from the obligation to repay the principal)[4] within 30 working days from the date of reaching 01 year from the drawdown date through the account, registration with the SBV is not required[5]. Beyond this timeframe, if the borrowing enterprise fails to register the loan, it will be subject to administrative penalties according to regulations[6].

4. Authority to Confirm Registration, Loan Modification Registration

The authorities competent to confirm registration and modification registration of foreign loans are defined as follows[7]:

• Foreign Exchange Management Department – SBV: for loans with a loan amount exceeding USD 10 million (or other currencies of equivalent value).
• SBV branch in the province or city where the borrowing enterprise’s head office is located: for loans with a loan amount up to USD 10 million (or other currencies of equivalent value).

After a loan has been registered, if there are changes (including increasing or decreasing the loan amount above or below USD 10 million or the borrowing enterprise’s head office changes province or city), the borrowing enterprise must submit a dossier for modification registration of the foreign loan to the authority that most recently confirmed the registration or modification registration of the foreign loan. Within 07 working days from the date of receiving the modification registration dossier, this authority will be responsible for forwarding it to the competent authority determined according to the above principles for further processing.

Regarding the determination of the authority to confirm registration and modification registration of loans mentioned above, we note that there will be changes in the near future. With the implementation of the plan to reorganize and streamline the government apparatus, we understand that the number of SBV branches in provinces and cities is expected to be reduced from 63 to 15. Accordingly, borrowing enterprises with head offices in different provinces and cities may share a common competent authority for registration and modification registration of loans.

However, from 25 July 2026, the threshold for determining the authority competent to confirm the registration and registration of amendments of foreign loans is increased from USD 10 million to USD 20 million, specifically as follows:[8]

• The Foreign Exchange Management Department – State Bank of Vietnam (SBV) has the authority to confirm registration for loans with a loan amount of over USD 20 million (or another currency with equivalent value);
• The regional branch of the SBV where the borrowing enterprise has its head office has the authority to confirm registration for loans with a loan amount of up to USD 20 million (or another currency with equivalent value).

For applications for registration or registration of amendments of foreign loans with a loan amount of up to USD 20 million that were received by the Foreign Exchange Management Department prior to 25 July 2026, such applications shall continue to be processed by the Foreign Exchange Management Department. After issuing the confirmation of registration or registration of amendments of the foreign loan, the Foreign Exchange Management Department shall transfer the dossier to the competent regional SBV branch for further monitoring and processing[9]. The processing time for confirmation by the SBV is shortened to 10 working days from the date of receipt of a complete loan registration dossier[10].

5. Loan and Repayment Accounts

Borrowing enterprises must carry out foreign loan and repayment activities through (i) a loan and repayment account (“Loan Account”) opened at an account service providing bank (“ASPB”), applicable to enterprises with domestic capital[11]; or (ii) a direct investment capital account (“Capital Account”), applicable to enterprises with foreign direct investment[12]. If the loan currency and the currency of the Capital Account are different, the borrowing enterprise is entitled to open another Loan Account to execute the foreign loan at the bank where the Capital Account is opened[13]. Each foreign loan can only be executed through one ASPB, but one account can be used for one or more loans[14].

In cases where the foreign loan repayment obligation is jointly and severally liable arising after a split, separation, merger, or consolidation, enterprises with foreign direct investment are not obligated to use the Capital Account to repay this foreign loan[15]. In this case, the jointly and severally liable enterprises will implement the foreign loan repayment obligation together and can open a joint payment account as a Loan Account. If the enterprises do not jointly open a joint payment account, these enterprises must ensure that the Loan Account and repayment accounts are opened at the same ASPB to continue repaying the foreign loan[16].

ASPB shall implement the reporting regime according to the SBV’s regulations on the statistical reporting regime applicable to credit institutions and permitted branches of foreign banks. When carrying out loan registration or modification registration, the borrowing enterprise is responsible for providing the SBV with written confirmation from the ASPB regarding:

• the status of drawdown and repayment for foreign loans to be restructured in cases where registering a new foreign loan for the purpose of restructuring existing foreign debt[17];
• the status of drawdown and repayment for foreign loans in cases of registering modifications to loans related to contents such as loan amount, drawdown plan, repayment plan, loan term, or change of ASPB[18].

6. Principles of Transparent Fund Flows

To ensure the principle of transparent fund flows, all money transfer transactions (drawdown, repayment, fee payment) related to foreign loans of borrowing enterprises must be conducted through the Loan Account or Capital Account unless otherwise agreed by the parties involved in the loan agreement and these contents have been registered validly with the SBV.

However, Circular 12 allows the following drawdown cases not to be conducted through the Loan Account or Capital Account, including[19]:

• drawdown from the lender directly to the beneficiary who is a non-resident providing goods or services under a goods and services purchase contract with the resident borrowing enterprise;
• drawdown through the borrowing enterprise’s account opened abroad in cases where the borrowing enterprise is permitted to open an account abroad to execute foreign loans;
• drawdown of medium and long-term foreign loans through netting with direct payment obligations to the lender, including: payment obligations under import contracts, foreign loan repayment obligations, obligations to repay direct debt receivables with the lender; and/or
• drawdown in cases where the amount implemented for investment preparation is converted into foreign loan capital under the agreement between the parties in accordance with legal regulations on foreign exchange management for foreign direct investment activities in Vietnam.

Similarly, the borrowing enterprise and the lender may agree on repayment methods not through the Loan Account or Capital Account (if applicale), provided that this content has been mentioned in the loan registration document and in the dossier submitted to the SBV, including[20]:

• Repayment in the form of providing goods or services to the lender.
• Repayment through the lender and the borrowing enterprise agreeing to convert outstanding debt into shares or contributed capital in the borrowing enterprise.
• Repayment through the lender and the borrowing enterprise agreeing to swap loan debt for shares or contributed capital owned by the borrowing enterprise.
• Repayment of medium and long-term foreign loans through netting of direct receivables with the lender.
• Repayment through the borrowing enterprise’s account opened abroad (in cases where the borrowing enterprise is permitted to open an account abroad to execute foreign loans). To clarify, this is the case where the borrowing enterprise has foreign currency revenue from outside Vietnam; if the source of repayment funds is transferred from Vietnam, it is still necessary to implement it through the Loan Account or Capital Account (if applicale).

In cases of drawdown or repayment not through the Loan Account or Capital Account (if applicale), the borrowing enterprise needs to note to make a notification and send relevant supporting documents related to the transaction to the ASPB within 05 working days from the date of transaction execution[21].

During our practice, we have learned that some borrowing enterprises, possibly due to not fully understanding the above regulations, have requested lenders to disburse foreign loans (mainly short-term loans) into their foreign currency payment accounts. If the drawdown has been completed, we believe that the payment of interest and principal of the foreign loan when due according to the loan agreement may be difficult to implement in practice. To address this, the borrowing enterprise needs to immediately report this violation to the SBV for handling instructions. In this case, as the enterprise has violated regulations on drawdown and use of loan accounts for foreign loans and repayments, it is highly likely that the SBV, in addition to providing handling guidance, will also impose administrative penalties on the borrowing enterprise.

7. Permitted Purposes of Medium and Long-Term Foreign Loans

Borrowing enterprises are only permitted to borrow medium and long-term foreign loans to serve the following purposes[22]:

• Firstly,to implement investment projects of the borrowing enterprise (limited to investment projects with one of the 03 types of permits issued under the Investment Law, including[23]: (i) investment registration certificate, (ii) investment registration certificate, or (iii) investment policy approval). Notably, these types of investment permits are mainly applicable to projects with foreign investment capital and other high-value investment projects, implemented in industrial zones or related to housing or business real estate development. When registering to use medium and long-term loans for these projects, the enterprise must ensure that the total principal amount (excluding interest and other payables) of all medium and long-term loans does not exceed the loan capital limit of the approved investment project (which is determined by the total investment capital minus the contributed capital of investors, as specified in the investment permit, investment registration certificate, or investment policy approval)[24].
• Secondly, to implement production and business plans, other projects of the borrowing enterprise. In this case, the borrowing enterprise is responsible for proving the purpose of the foreign loan by providing a Foreign Loan Utilization Plan (clearly stating information on the use of the received funds)[25]. The borrowing enterprise must ensure that the outstanding balance of medium and long-term loans in VND and foreign currencies of the borrowing enterprise (including short-term loans extended and short-term loans overdue converted to medium and long-term loans) serving this purpose does not exceed the total loan demand mentioned in the approved Foreign Loan Utilization Plan[26].
• Thirdly, to restructure the foreign debt of the borrowing enterprise. In this case, the borrowing enterprise is responsible for proving the purpose of the foreign loan by providing a Foreign Debt Restructuring Plan of the borrowing enterprise that has been approved by competent authorities[27]. The borrowing enterprise must ensure (i) that the foreign loan amount serving the purpose of restructuring foreign debt does not exceed the total value of outstanding principal, interest, unpaid fees of the existing foreign debt and fees of the new loan determined at the time of restructuring; and (ii) repay the existing foreign loan within 05 working days from the date of drawdown of the new loan[28].

8. Procedures for registration of foreign loans from 2026

From 25 January 2026, Circular 80 will take effect, and from 2026 onward, procedures for registration of foreign loans may be carried out online via the National Public Service Portal or by direct/by post submission at the One-Stop Service Division of the SBV.

For online submission, the loan registration dossier should note the following:[29]

• The electronic dossier must use digital signatures or specialized electronic signatures ensuring security, in accordance with the laws on electronic transactions and administrative procedures conducted in the electronic environment;
• Submitted documents must be in “.PDF” format, scanned from the original documents, except for application forms that are declared online; and
• The names of electronic documents must correspond to the names of the respective document types.

We have some notes as follows:

• Unlike previous effective circulars, Circular 12 does not require that the new foreign loan interest rate not be higher than the interest rate of the existing foreign debt being restructured. Furthermore, Circular 12 does not impose any conditions or restrictions on the term of the new loan compared to the existing foreign debt being restructured.
• Using foreign loans to restructure the principal of domestic loans is not permitted; however, short-term foreign loans can be used to pay interest and other expenses (not principal) of domestic loans.
• It is practically feasible for borrowing enterprises to register to use a portion of the foreign loan to pay expenses related to receiving the foreign loan or to reserve for future repayment of a portion of the principal and/or interest, although Circular 12 does not have specific regulations allowing this.
• Circular 08 also does not have clear regulations on whether borrowing enterprises are allowed to use medium and long-term foreign loan capital for the purpose of mergers and acquisitions (M&A). If the borrowing enterprise invests in a target enterprise operating in the same business sector (by purchasing contributed capital or shares from existing shareholders or from the target enterprise plans to newly issue or contribute capital to cooperate in business with other enterprises), is it possible to borrow medium and long-term loans to finance these activities? In our working process, we find that depending on each specific case and depending on whether the borrowing enterprise can provide sufficiently and appropriately detailed explanations, registering to use medium and long-term loans to carry out the aforementioned activities with the SBV is feasible in practice.

From 25 January 2026, the loan registration dossier has been streamlined by removing certain documents, including the legal documents of the borrower and the guarantee agreement in cases where the loan is guaranteed[30]. In addition, the SBV allows the borrower to submit a summary of the foreign loan agreement, provided that such summary contains the key contents as prescribed by regulations, and the borrower must take responsibility for ensuring that the summary is accurate and consistent with the loan agreement[31]. Another notable point in the loan registration dossier is that the confirmation issued by the ASPB on the status of capital drawdown and repayment of principal and interest of the loan must be issued within 10 working days prior to the submission of the loan registration dossier[32].

• With respect to the Loan Account, Circular 80 supplements several provisions regarding receipt and payment transactions related to foreign loans, as follows:
  • Receipt transactions: The borrower is permitted to use the Loan Account to repay loan principal and fees to the guarantor who is a resident and is permitted to receive foreign currency in accordance with applicable laws[33]. For Vietnamese-dong-denominated Loan Accounts, the borrower is permitted to receive proceeds from the sale of foreign currency to licensed credit institutions[34];
  • Expenditure transactions: The borrower is permitted to use the Loan Account to sell foreign currency to licensed credit institutions in order to perform obligations to repay foreign loans in Vietnamese dong[35]. In addition, Circular 80 introduces a new provision allowing the borrower to make payments to reimburse principal, interest, and fees arising from the on-lent amount to a guarantor who is a resident and is permitted to receive foreign currency in accordance with applicable laws[36]. For Vietnamese-dong-denominated Loan Accounts, the borrower is permitted to repay the lender in cases where the foreign loan is not eligible for registration confirmation (including cases of extension of a short-term foreign loan into a medium- or long-term loan), or where the confirmation of registration or registration of amendments is terminated due to fraudulent information or forged documents in the dossier[37].

[1] Article 3.1 of Circular 12.

[2] The scope of regulation of Decree 219, Circular 08, and Circular 12 does not include individual subjects. Accordingly, individual borrowers cannot access foreign loans in practice.

[3] Article 11 of Circular 12.

[4] Article 3 of Circular 80.

[5] Article 11.3 of Circular 12.

[6] Article 23.3(g) of Decree 88/2019/ND-CP of the Government dated 14 November 2019, on penalties for administrative violations in the monetary and banking sector.

[7] Article 20 of Circular 12.

[8] Arrticle 10.1 and Article 22.2 of Circular 80.

[9] Arrticle 24.2 of Circular 80.

[10] Arrticle 5.2 of Circular 80 and Article 15.3 of Circular 12.

[11] Article 26.1 of Circular 12.

[12] Article 26.2 of Circular 12.

[13] Article 26.2(a) of Circular 12.

[14] Article 26.3 of Circular 12.

[15] Article 26.2(d) of Circular 12.

[16] Article 6.3 of Circular 12.

[17] Article 16.8(a) of Circular 12.

[18] Article 19.6 of Circular 12.

[19] Article 34.1 of Circular 12.

[20] Article 34.2 of Circular 12.

[21] Article 34.3 of Circular 12.

[22] Article 17.2 of Circular 08.

[23] Article 17.4(a) of Circular 08.

[24] Article 18.1 of Circular 08.

[25] Article 17.4(b) of Circular 08.

[26] Article 18.2 of Circular 08.

[27] Article 17.4(c) of Circular 08.

[28] Article 18.3 of Circular 08.

[29] Article 7 Circular 80.

[30] Article 6.1 of Circular 80.

[31] Article 6.2 of Circular 80 and Article 16.4 of Circular 12.

[32] Article 6.3 of Circular 80 and Article 16.8 of Circular 12.

[33] Article 11.3 of Circular 80 and Article 28.1(b) of Circular 12.

[34] Article 12.3 of Circular 80 and Article 29.1(c) of Circular 12.

[35] Article 11.5 of Circular 80 and Article 28.2(d) of Circular 12.

[36] Article 11.6 of Circular 80.

[37] Article 12.6 of Circular 80.

Disclaimer of Liability: This article is prepared by PTN Legal LLC (“PTN Legal”) for informational purposes only and for the reader’s reference. PTN Legal does not commit to or guarantee the accuracy or completeness of this information. The content of this article may be changed, amended, or updated without prior notice. PTN Legal is not responsible for any errors or omissions in this article or damages arising from the use of this article in any case.