Currently, regulations on foreign exchange management for foreign direct/indirect investment activities in Vietnam are governed by the Ordinance on Foreign Exchange, the Ordinance amending and supplementing a number of articles of the Ordinance on Foreign Exchange, Decree 70/2014/ND-CP dated July 17, 2014 detailing the implementation of a number of articles of the Ordinance on Foreign Exchange and the amending Ordinance on Foreign Exchange, Circular 19/2014/TT-NHNN dated August 11, 2014 and Circular No. 05/2014/TT-NHNN dated March 12, 2014 of the State Bank.
Accordingly, Clause 1, Article 6 of Circular 19/2014/TT-NHNN stipulates: “Foreign direct investment enterprises and foreign investors (who are non-residents) entering into business cooperation contracts may open direct investment capital accounts in foreign currency or in Vietnam dong at an authorized bank to conduct revenue and expenditure transactions related to foreign direct investment activities in Vietnam”.
Clause 1, Article 6 of Circular No. 05/2014/TT-NHNN stipulates: “When carrying out indirect investment activities in Vietnam, foreign investors must open an indirect investment capital account at ONE authorized bank to conduct authorized revenue and expenditure transactions related to foreign indirect investment activities in Vietnam”.
Clause 1, Article 3 of Circular No. 05/2014/TT-NHNN stipulates: Foreign investors include non-residents who are foreign organizations and individuals conducting indirect investment activities in Vietnam.
Clause 2, Article 2 of Circular No. 05/2014/TT-NHNN stipulates: “This Circular does not apply to foreign investors being residents who are foreign organizations and individuals. These subjects carry out indirect investment activities in Vietnam in accordance with current regulations on securities law and other relevant legal documents.
Regulations in Circular No. 16/2014/TT-NHNN dated August 1, 2014 of the State Bank guiding the use of foreign currency accounts and Vietnamese dong accounts of residents:
– Residents being foreign individuals are allowed to use foreign currency accounts at authorized banks to perform transactions: (i) collecting from lawful domestic sources including: salary, bonus, allowance, purchase foreign currency from lawful Vietnamese dong… and (ii) paying for transactions permitted for domestic payment in foreign currency according to the State Bank’s regulations on the use of foreign exchange in the territory of Vietnam (Article 4).
– Residents being foreign individuals are allowed to use Vietnamese dong accounts to perform transactions: (i) collecting from lawful revenue sources in Vietnam including income from salaries, bonuses and allowances…; and (ii) spending for other lawful purposes permitted by Vietnamese law.
Regarding foreign exchange management, Circular 19/2014/TT-NHNN and Circular No. 05/2014/TT-NHNN do not regulate the opening of direct/indirect investment capital accounts of foreign investors who are resident.
Therefore, based on the provisions of Circular No. 16/2014/TT-NHNN, foreign investors who are residents are allowed to use current accounts in Vietnam Dong opened at authorized banks to transfer money for capital contribution, purchase of shares and contributed capital at the Company on the basis of compliance with current regulations on foreign exchange management for foreign investment activities in Vietnam, regulations of law on securities, investment and other provisions of relevant laws.