All individuals who have cash in foreign currencies are allowed to store, carry or sell to banks, but cannot use it for transactions, payment, quotation or advertisement. Foreign investors, who want to buy shares, will have to open accounts in Vietnamese dong. This is the latest regulation by the Vietnamese Government to minimise the dependence on US dollars in Vietnam.
On December 28, 2006, the Prime Minister signed the Decree 160, providing guidelines on the implementation of the Ordinance on Foreign Exchange, in which all transactions, payment, quotation and advertisements shall be compulsorily implemented in Vietnamese dong. The Decree, signed on December 28, will take effect after 15 days.
Individuals and organisations shall be allowed to use foreign currencies in transactions with banks or organisations which are allowed to provide foreign exchange services. Foreign curencies shall also be used in capital contribution to foreign direct investment projects in Vietnam, in payment of trusted import and export contracts on a basis of transfer, duty free goods trading, and payment of salary and allowance to foreigners only.
If they have cash in foreign currencies, they shall be allowed to store, gift, inherit, or sell it to credit organisations allowed to transfer or send foreign currencies to foreign countries for legitimate purposes. When they deposit foreign currencies to personal saving accounts in banks, they shall be allowed to withdraw both principal and interest in foreign currencies.
Individuals and organisations shall be allowed to open accounts for their deposits in foreign currencies to receive money from foreign countries or legitimate sources in Vietnam. However, the spending and payment from the accounts are constrained. In the case that individuals use international payment cards in Vietnam, they shall get payments in Vietnamese dong from card payment banks only.
In the case that foreign investors want to buy shares and other valued documents or contribute capital in the form of indirect investment, they shall have to open accounts in Vietnamese dong in banks. All transactions relating to indirect investment shall be implemented via the accounts in Vietnamese dong. If they have capital in foreign currencies, they shall have to sell foreign currencies to have Vietnamese dong for their investment.
When they want to transfer their capital to foreign countries, foreign investors shall be allowed to use Vietnamese dong to buy foreign currencies at allowed credit organisations before transferring their capital.
Apart from the regulations which tighten the use of foreign currencies in payment and transactions in Vietnam, the Decree 160 paves the way for the liberalisation of payments and money transfers relating to import and export activities, direct and indirect investment, foreign debt and interest payment or one-way money transfer for consumption purposes.
Under the decree, individuals shall be free to buy, transfer or carry foreign currencies to foreign countries for the purposes of study, medical check-ups and treatment, tourism or support for their relatives in foreign countries, via banks, after showing documents as stipulated by banks. Individuals shall be responsible before the law for precision of their documents and shall not have to show documents certifying that they have completed tax obligations with the State.
On their departures to foreign countries, individuals shall not declare if they carry foreign currencies or Vietnamese dong below the certain limited amount. If the amount is higher than the limited amount, they shall have to declare with customs agencies and show necessary documents. Based on the situation of each period of time, the State Bank of Vietnam shall issue concrete regulations on the limited amount of money and gold individuals can carry with them when they emigrate or immigrate. The limit is now US$7,000 and is expected to be increased to US$10,000 in the coming time.
Lan Anh
Vietnamese
