Foreign invested companies registered and established in Vietnam may raise funds from abroad, but the relevant foreign loans must comply with the relevant regulations formulated by competent administration authorities such as the State Bank of Vietnam. The specific rules and requirements include:
Loan Limit
For a foreign invested company with an investment registration certificate, the limit of all medium or long-term loans shall not exceed the difference between the total investment capital to implement the project and the registered capital specified in the investment registration certificate.
Registration
Foreign loans not guaranteed by the government may be divided into short-term loans with a maturity of up to 1 year and medium or long-term loans with a maturity exceeding 1 year. Medium or long-term loans must be registered with and approved by the State Bank of Vietnam while short-term loans do not have so such requirement under normal circumstances.
Loan Purpose
Short-term foreign loans can be used for the following purpose:
(1) restructuring the borrower’s existing foreign debts; or
(2) payment of short-term payables (except for principal of domestic debts) arising from the implementation of investment projects, business plans other business, or projects of the borrower and measured in accordance with applicable accounting regulations.
Medium or long-term foreign loans can be used for following purpose:
(1) restructuring the borrower’s existing foreign debts;
(2) financing the implementation of the borrower’s licensed investment projects; or
(3) financing the implementation of the borrower’s business plans or other projects.
KAIZEN Group is equipped with experienced and highly qualified professional consultants and is therefore well positioned to provide professional advices and services in respect of the formation and registration of company, application for various business licences and permits, company compliance, tax planning, audit and accounting in China. Please call and talk to our professional consultants for details.
Disclaimer
All information in this article is only for the purpose of information sharing, instead of professional suggestion. Kaizen will not assume any responsibility for loss or damage.
What is the minimum amount of charter capital required to set up a limited liability company in Vietnam? There is no minimum charter capital requirement for establishing a limited liability company (LLC) in Vietnam under the laws and regulations of Vietnam, except for certain specific sectors (such as banking and real estate sector).
Foreign loans not guaranteed by the government may be divided into short-term loans with a maturity of up to 1 year and medium or long-term loans with a maturity exceeding 1 year. Medium or long-term loans must be registered with and approved by the State Bank of Vietnam while short-term loans do not have so such requirement under normal circumstances.
According to Resolution No.198/2025/QH15 adopted by the National Assembly of Vietnam on 17 May 2025, the corporate income tax (CIT) for newly established small and medium-sized enterprises shall be exempted for 3 years from the date of issuance of the first enterprise registration certificate, starting from 17 May 2025.
Joint stock companies (JSC) and limited liability companies (LLC) are two common types of companies in Vietnam. The main differences between JSC and LLC are as follows:Advantages of a JSC: A JSC can issue shares and be listed on the Vietnam stock exchange. It generally has higher reputation and financing capabilities, making it more suitable for large businesses or corporate groups.
