New Circular Allows Foreign Investors to Open Direct Investment Capital Accounts in Vietnam
By Dezan Shira & Associates
Posted: 8th September 2014 08:22HANOI – On August 11, the State Bank of Vietnam issued Circular 19/2014/TT-NHNN to provide detailed instructions on the management of foreign currency FDI operations in the country. This Circular serves as explanation to Decree 70/2014/ND-CP, which will go into effect from September 25th2014.
According to the new regulations, foreign investors can open direct investment capital accounts in Vietnam Dong in addition to their foreign currencies accounts. Before, they were only allowed to open direct investment capital accounts in foreign currencies.
This change will provide huge support to foreign investors, especially those who want to reinvest in Vietnam using their own revenue in the country.
Another regulation of note is that, before obtaining an investment license, foreign investors can transfer part of their capital money to Vietnam for expenditures on pre-investment activities, such as business registration, market research and strategy consulting, etc. This cost will be counted as an operating expense when enterprises get their investment permit.
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All transactions and cash payments for import and export activities of goods and services must be conducted by bank transfers with authorized credit institutions.
Foreign investors can also buy foreign currencies from local authorized banks and can transfer the money abroad from their own investment capital accounts within 30 days from the day of purchase.
The circular aims to improve the management of FDI flows through the banking system in Vietnam and, at the same time, provide foreign investors with better conditions to make investments in the country.
This article was first published on Vietnam Briefing.
Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.
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