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THE
STATE BANK OF VIETNAM
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SOCIALIST
REPUBLIC OF VIETNAM
Independence- Freedom Happiness
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No.
1550/2004/QD-NHNN
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Hanoi,
December 6, 2004
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DECISION
ON
THE FOREIGN EXCHANGE CONTROL FOR THE PURCHASE, SALE OF SECURITIES BY FOREIGN
INVESTORS IN THE STOCK EXCHANGE
THE GOVERNOR OF THE STATE
BANK
- Pursuant to the Law on the
State Bank of Vietnam No. 01/1997/QH10 dated 12 December 1997; the Law on the
amendment, supplement of several Articles of the Law on the State Bank of
Vietnam No. 10/2003/QH11 dated 17 June 2003;
- Pursuant to the Decree No. 144/2003/ND-CP dated 28 November 2003 of the
Government on securities and securities market;
- Pursuant to the Decision No. 146/2003/QD-TTg dated 17 July 2003 of the Prime
Minister on the ratio of foreign party participation in the Vietnamese
securities market;
- Upon the proposal of the Director of the Foreign Exchange Control Department,
DECIDES:
I. GENERAL PROVISIONS
Article 1. Governing
scope
1. This Decision shall govern
foreign exchange transactions of foreign investors relating to the purchase,
sale of securities listed in the Stock Exchange of Vietnam, including the
capital remittance into Vietnam for the purchase, sale of securities, the conversion
of foreign currencies into Vietnam Dong, the opening and use of VND account for
securities purchase, sale, the conversion of Vietnam Dong into foreign
currencies and overseas remittance of foreign currencies.
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3. Foreign exchange transactions
of foreign investors relating to the activity of direct investment in Vietnam
in accordance with the Law on foreign investment in Vietnam shall not be
governed by this Decision.
Article 2. Interpretation
In this Decision, following
terms shall be construed as follows:
1. Foreign investors include:
- Non-residents being foreign
financial, economic organizations that are set up in accordance with the
foreign laws;
- Non-residents being foreigners
who do not permanently reside in Vietnam, Vietnamese persons who have settled
overseas;
- Residents being foreigners who
reside permanently in Vietnam.
2. Authorized banks are the
banks operating in Vietnam and permitted by the State Bank to engage in foreign
exchange activity.
3. Securities listed at the
Stock Exchange include different types of stocks, bonds, certificate of
investment fund and other types of securities in accordance with provisions of
applicable laws.
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Within the territory of Vietnam,
the purchase, sale of securities by foreign investors shall be made in Vietnam
Dong.
Article 4. Source of
capital used in the purchase of securities
Foreign investors shall be
entitled to use following sources in foreign currency and in Vietnam Dong to
purchase securities:
1. Foreign currency remitted
from abroad into Vietnam in accordance with current provisions on foreign
exchange control;
2. Foreign currency and Vietnam
Dong on the foreign investors accounts, which are maintained at authorized
banks;
3. Vietnam Dong on the accounts
capital contribution, share purchase of foreign investors opened at commercial
banks in Vietnam in accordance with the State Banks provisions on the foreign
exchange control applicable to the capital contribution, share purchase by
foreign investors in Vietnamese enterprises;
4. Distributed profits of
foreign investors from their direct investment activities in Vietnam;
5. Receipt of foreign investors
from the transfer, liquidation, dissolution of their direct investment
activities in Vietnam in accordance with provisions of applicable laws;
6. Salaries, bonus and other
legal incomes of foreign individuals in Vietnam in accordance with provisions
of applicable laws;
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Article 5. Capital
remittance into and out of Vietnam
1. If foreign investors wish to
use their foreign currency, remitted from abroad or maintained on their
accounts foreign currency at the authorized banks in Vietnam in accordance with
provisions of applicable laws on foreign exchange control, for securities
investment, they must transfer their foreign currency to the account foreign
currency demand deposits for special purposes of the securities company opened
at the authorized bank in accordance with provisions in this Decision. They must
sell foreign currency to the authorized bank to exchange for Vietnamese Dong
for securities purchase.
2. After having fulfilled their
tax obligations to the State of Vietnam in accordance with provisions of
applicable laws, foreign investors shall be entitled to purchase foreign
currency at authorized banks to remit overseas in accordance with provisions of
applicable laws on foreign exchange control.
II. OPENING AND USE OF
ACCOUNTS OF FOREIGN INVESTORS AND SECURITIES COMPANIES
Article 6. Opening of
account securities transactions in VND of foreign investors at the Securities
Company
1. Foreign investors shall open
the account securities transactions in VND at a securities company for the sake
of their securities purchase, sale activities at the Stock Exchange in
accordance with provisions of applicable laws on securities and securities
market.
2. The Securities Company shall
manage separately the securities transaction deposits of each foreign investor
and separate the securities transaction deposits of foreign investors and its
own money. The whole deposits of foreign investors must be transferred into the
account VND deposits for special purposes of the Securities Company opened at
an authorized bank under provisions in Article 7 of this Decision. All transactions
of money transfer, payment relating to the securities investment activities of
the foreign investors shall be performed through this account at the authorized
bank.
Article 7. Opening and
use of the account VND demand deposits for special purposes and the account
foreign currency demand deposits for special purposes of the securities company
at the authorized bank
The securities company must open
one (01) account VND demand deposits for special purposes and one (01) account
foreign currency demand deposits for special purposes at an (01) authorized
bank for the maintenance of the entire securities transaction deposits of
foreign investors.
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Receipts:
a. Receipts from the sale of
foreign currency on the account foreign currency demand deposits for special
purposes of the securities company for the sake of securities investment
activity under the authorization of the foreign investor;
b. Receipts from money transfer
of VND sources of the foreign investor as stated in paragraph 2, 3, 4, 5, 6 and
7, Article 4 of this Decision;
c. Receipts from the sale of
securities, from the receipt of dividends, bonds interests and other relevant
receipts arising from the purchase, sale of securities under the authorization
of the foreign investor;
Payments:
a. Payment for the purchase of
securities being in circulation at the Stock Exchange in Vietnam under the
authorization of the foreign investor;
b. Payment for the transfer to
the account capital contribution, VND share purchase of the foreign investor
for the capital contribution, purchase of shares in Vietnamese enterprises;
c. Payment for the spending of
the foreign investor in Vietnam, which are made from dividends income, bonds
interests gained from his securities investment activity.
d. Payment for the purchase of
foreign currency to remit overseas under the authorization of the foreign
investor.
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Receipts:
a. Receipt from the money
transfer from abroad into Vietnam under the authorization of the foreign
investor;
b. Receipts from the money
transfer from the account foreign currency of the foreign investor opened at an
authorized bank in Vietnam.
Payments:
a. Payment for the sale of
foreign currency to the authorized bank where the account foreign currency is
opened for VND to transfer to the account VND deposits for special purposes of
the securities company for the sake of the securities investment activity under
the authorization of the foreign investor;
b. Payment for the overseas
remittance under the authorization of the foreign investor.
Article 8. Vouchers
verification
1. The authorized bank, upon
carrying out the receipt, payment operations on the account VND deposits for
special purposes of a securities company, shall be responsible for the
verification of following vouchers:
- The contract on the opening of
account securities transaction between the securities company and the foreign
investor;
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- In respect of expenditures
from income sources such as dividends, bonds interests of the foreign investor
for his spending in Vietnam: the written confirmation by the securities company
of the dividends, bonds interests of the foreign investor.
- In respect of expenditures in
VND for the foreign currency purchase to remit overseas: the written
confirmation by the State competent agency of the foreign investors fulfillment
of tax obligations to the State of Vietnam for investments in securities at the
Stock Exchange (if applicable).
2. For transactions of foreign
currency sale to the foreign investor: the authorized bank shall be only
permitted to sell foreign currency to the foreign investor to remit overseas,
but not be permitted to sell foreign currency to transfer to the account
foreign currency of the foreign investor.
Article 9. Reporting
The report on the account
deposits for special purposes of the securities company opened at the
authorized bank shall be made in accordance with current provisions of the
State Bank on the statistic reporting regime applicable to units of the State
Bank and credit institutions.
III. ORGANIZATION OF
IMPLEMENTATION
Article 10. Implementing
provisions
1. This Decision shall be
effective after 15 days from its publication in the Official Gazette and
replace the Decision No. 998/2002/QD-NHNN dated 13 September 2002 of the
Governor of the State Bank.
2. The Director of the Foreign
Exchange Control Department, Heads of units of the State Bank, General Managers
of the State Banks branches in provinces, cities under the central Governments
management; Chairpersons of the Board of Directors and General Directors
(Directors) of credit institutions permitted to engage in foreign exchange
activities, Chairpersons of the Board of Directors and Directors of the
Securities Companies, foreign investors participating in the sale and purchase
of securities shall be responsible for the implementation of this Decision.
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FOR
THE GOVERNOR OF THE STATE BANK OF VIETNAM
DEPUTY GOVERNOR
Phung Khac Ke