Remarkable changes in FOREX Rules

Payments and remittance of money relating to import and export of goods and services
Under Decree 160, all payments and remittance of money relating to import and export of goods and services shall be conducted in the form of remittance via an authorised credit institution, except for some cases of cash payment which have been considered and approved by the State Bank of Vietnam (SBV). Decree 70 no longer offers such cases of cash payment.

Opening and use of a direct investment capital account
Under Decree 70, the resident enterprises with foreign direct investment capital (FDI Enterprises) and foreign investors participating in business co-operation contracts are required to open and use a direct investment capital account in foreign currency (Direct Foreign Currency Account) at an authorised credit institution in Vietnam.

Further, after having opened a Direct Foreign Currency Account in accordance with Decree 70, the FDI Enterprises and foreign investors participating in business co-operation contracts may open a direct investment capital account in Vietnamese Dong (VND) for the sole purpose of implementing lawful transactions in VND relating to their direct investment activities in Vietnam.

Opening and use of offshore foreign currency accounts
As regulated under Decree 70, the opening and use of offshore foreign currency accounts by residents being State agencies, units of the people’s armed forces, political organisations, socio-political organisations, professional-socio-political organisations, socio-organisations, professional-socio organisations, social funds and charitable funds of Vietnam must be licensed by the SBV only for the purpose of receiving foreign financial support or aid, or in other circumstances approved by the competent authority of Vietnam.

Use of foreign cash currency by Vietnamese citizens
Decree 70 emphasises that the Vietnamese citizens are permitted under Decree 70 to (i) deposit foreign cash currency in savings accounts at licensed credit institutions, and (ii) withdraw the principle and receive interest in the foreign cash currency.

Use of foreign exchange in Vietnam
Decree 70 does not specify transactions and payments within the territory of Vietnam which may be effected in foreign exchange by residents and non-residents as compared with Decree 160. Under the current forex rules, such cases which may be effected in foreign exchange shall be subject to regulation of the SBV.