Economic institutions would be licensed to make offshore loans or provide guarantee to non-residents, according to a draft decision prepared by the State Bank of Vietnam.
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However, such activities must neither affect macro safety and socio-political security nor go contrary to national defense policies, foreign policies, and orientations for macroeconomic stability in each period.
Under the draft, the central bank requires economic institutions to comply with the laws on currency, foreign exchange, investment, tax and other relevant laws; and abide by the laws of the countries or territories of borrowers and guarantee recipients, and relevant treaties. Economic institutions would take responsibility and take risks for their offshore lending activities.
To be licensed to carry out offshore lending, an economic institution must have been operating for at least five years; has earned profits in two consecutive years before the time of submission of a dossier of request for approval of overseas lending; and have no bad debts, overdue foreign debts, or tax arrears.
Besides, the institution must work out a plan on offshore lending and provision of guarantee to non-residents approved by a competent authority as prescribed in its charter and the law on management and use of state capital in production and business of enterprises, for economic institutions being state-owned enterprises.
According to the draft, borrowers and guarantee recipients would include the parent company or sister companies of the economic institution; a foreign government or a foreign organization guaranteed by a foreign government.
The economic institution must not use foreign currencies brought from credit institutions or borrowed at home or abroad to make offshore lending but use foreign currencies earned from its production and business activities.- (VLLF)