The State Bank of Vietnam has just submitted to the Government a draft decree amending Decree No. 16/2001/ND-CP of May 2, 2001, on organization and operation of financial leasing companies.
A financial leasing company, under the draft decree, is a non-bank credit institution with the Vietnamese legal entity status established and operating in Vietnam in either of the two forms: limited-liability company and joint-stock company. Particularly, foreign-invested financial leasing companies may only be established in the form of limited-liability company with two or more members, for joint-venture companies, or one-member limited liability company, for companies with 100% foreign capital.
As compared with Decree 16/2001/ND-CP, the draft decree imposes stricter requirements on a foreign party to a financial leasing company, stipulating that apart from having to satisfy currently prescribed conditions, the foreign party must have a total asset of USD 10 billion or more by the end of the year preceding the time of submission of the application, unless otherwise provided for by the bilateral investment agreement between Vietnam and the country of this foreign party.
Regarding professional operations of financial leasing companies, according to the draft decree, financial leasing companies with a charter capital equal to the legal capital level prescribed for financial companies may provide short-term loans to lessees for supplementing their working capital and perform the factoring operation for lessees.
The draft paper also provides in detail for the organizational structure of financial leasing companies.-