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THE
GOVERNMENT
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SOCIALIST
REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
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No:
16/2001/ND-CP
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Hanoi,
May 02, 2001
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DECREE
ON THE ORGANIZATION AND OPERATION OF FINANCIAL LEASING
COMPANIES
THE GOVERNMENT
Pursuant to the Law on Organization of the
Government of September 30, 1992;
Pursuant to December 12, 1997 Law No. 01/1997/QH10 on the State Bank of
Vietnam;
Pursuant to December 12, 1997 Law No. 02/1997/QH10 on Credit Institutions;
At the proposal of the Governor of the State Bank of Vietnam,
DECREES:
Chapter I
GENERAL PROVISIONS
Article 1.-
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2. Upon the expiry of the leasing term, the
lessees may opt to purchase the leased assets or continue to lease them under
the conditions already agreed upon in the financial leasing contracts. The
total rent payable for an asset determined in a financial leasing contract must
be at least equal to the value of such asset at the time of signing of the
contract.
3. Financial leasing activities on the
Vietnamese territory must be conducted through financial leasing companies
established and operating in Vietnam and comply with the provisions of this
Decree.
4. Financial leasing companies’ financial
leasing activities overseas shall comply with the provisions of this Decree and
other relevant provisions of Vietnamese law or the involved parties may agree
upon the application of international practices if such practices do not run
counter to Vietnamese law.
Article 2.- Financial
leasing companies are non-bank credit institutions and Vietnamese legal
persons. They are established and operate in Vietnam in the following forms:
1. State-run financial leasing companies.
2. Joint-stock financial leasing companies.
3. Affiliate financial leasing companies of
credit institutions.
4. Joint-venture financial leasing companies.
5. Financial leasing companies with 100% foreign
capital.
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1. Joint-venture financial
leasing companies are established with the capital contributed by the
Vietnamese party consisting of one or more than one Vietnamese credit
institution and/or enterprise and the foreign party consisting of one or more
than one foreign credit institution, on the basis of joint-venture contracts.
2. Financial leasing companies with 100% foreign
capital are established with the capital contributed by one or more than one
foreign credit institution in accordance with the provisions of Vietnamese law.
Article 4.-
1. The parties to a
joint-venture financial leasing company may transfer their contributed capital
amounts according to the provisions of Article 26 of the Governments Decree No.
13/1999/ND-CP of March 17, 1999, but must give the transfer priority to other
parties within the joint-venture financial leasing company. The transfer of a
joint-venture financial leasing companys capital must be provided for in the
companys charter and comply with law provisions.
2. Financial leasing companies with 100% foreign
capital may transfer their capital but must give the transfer priority to
Vietnamese organizations.
Article 5.-
1. The operation term of a
financial leasing company in Vietnam shall not exceed 50 years. Any extension
thereof must be approved by the State Bank. Each extension shall not exceed 50
years.
2. For financial leasing companies established
and granted operation licenses before this Decree takes effect, their operation
term shall be as prescribed in the granted operation licenses.
Article 6.- The State
Bank of Vietnam is the body which perform the State management over the
financial leasing activities, having the tasks of granting and withdrawing
establishment and operation licenses, supervising and inspecting the operation
of financial leasing companies, submitting to the competent State bodies for
promulgation or promulgating according to its competence legal documents on
financial leasing activities.
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1. Lessors mean financial leasing companies
established and operating according to Vietnamese law.
2. Lessees mean organizations and individuals
operating in Vietnam, directly using the leased assets for their operation
purposes.
3. Leased assets mean machinery, equipment,
transport means and other movables.
Chapter II
ORGANIZATION AND
ADMINISTRATION OF FINANCIAL LEASING COMPANIES
Section I. GRANTING OF
ESTABLISHMENT AND OPERATION LICENSES
Article 8.-
1. Conditions for a
financial leasing company to be granted the establishment and operation
license:
a/ Wishing to conduct financial leasing
activities in the geographical area where it plans to operate;
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c/ Its founding members being prestigious and
financially capable organizations and/or individuals;
d/ Its managerial and executive staff having
full civil act capacity and professional qualifications suited to its
operations;
e/ Having a draft organization and operation
charter compliant with the provisions of the Law on Credit Institutions and other
law provisions;
f/ Having a feasible business plan.
2. Apart from the conditions specified in Clause
1 of this Article, the foreign parties to the joint-venture companies or
companies with 100% foreign capital must be permitted by competent bodies under
the provisions of foreign laws to enter into joint ventures or to conduct
financial leasing activities in Vietnam.
Article 9.-
1. Dossiers of application
for establishment and operation licenses of financial leasing companies:
a/ An application for the establishment and
operation license;
b/ The draft charter;
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d/ The list, CVs and diplomas evidencing the
professional capability and qualifications of founding members, members of the
Management Board, the Control Board and the general director (director);
e/ The capital contribution plan and the list of
capital-contributing individuals and organizations;
f/ The financial status and information about
big share-holders;
g/ The approval of the competent-level Peoples
Committee of the locality where the financial leasing companys head office is
to be located.
2. Apart from the documents specified in Clause
1 of this Article, for the application for establishment and operation licenses
of joint-venture financial leasing companies or financial leasing companies
with 100% foreign capital, the following documents are also required:
a/ The operation charter of the foreign-based
organization;
b/ The operation license of the foreign-based
organization;
c/ The written permission of a competent foreign
organization for the foreign party to operate in Vietnam;
d/ The audited balance sheet and profit-loss
statement, the report on the situation of the last three years operation of the
foreign-based organization;
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3. The dossiers of application for the licenses
prescribed in Clause 2 of this Article must be made in two sets, one in
Vietnamese and the other in a common foreign language. The State Bank shall
specify which documents in the foreign-language dossier set are required to be
consularized. Vietnamese-language copies and translations from foreign
languages into Vietnamese must be certified by Vietnamese notary offices or
overseas Vietnamese representative missions or consulates.
Article 10.- Financial
leasing companies established according to the provisions of Clauses 1, 2 and
3, Article 2 of this Decree shall have to pay a licensing fee and a fee for
each extension of their establishment and operation licenses, being equal to
0.1% of their charter capital.
The fee payment by joint-venture financial
leasing companies and financial leasing companies with 100% foreign capital
shall comply with the provisions of Article 18 of the Governments Decree No.
13/1999/ND-CP of March 17, 1999.
Article 11.-
1. In order to be
operational, a financial leasing company shall have to meet all the following
conditions:
a/ Its charter already approved by the State
Bank;
b/ Having enough legal capital, its head office
suited to the requirements of financial leasing activities and having been
granted the business registration certificate;
c/ The cash amounts contributed to its charter
capital must be deposited in a blocked account at the State Bank at least 30
days before it starts operation.
d/ Having published the contents of its license
on central and local newspapers according to law provisions.
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Article 12.- The
withdrawal of the licenses of financial leasing companies shall comply with the
provisions of Article 29 of the Law on Credit Institutions and the guidance of
the State Bank.
Section 2. ORGANIZATIONAL,
ADMINISTRATIVE, EXECUTIVE AND CONTROL STRUCTURE OF FINANCIAL LEASING COMPANIES
Article 13.-
1. The opening of
domestic and overseas branches and representative offices of financial leasing
companies must be approved in writing by the State Bank.
2. The establishment of the financial leasing
companies independent cost-accounting affiliate companies having the legal
person status to operate in the finance, banking and insurance fields shall
comply with the regulations of the State Bank.
Article 14.- Dossier
conditions, procedures for opening of branches and representative offices of
financial leasing companies shall comply with the provisions of Article 33 of
the Law on Credit Institutions and the guidance of the State Bank.
Article 15.- The
administration, execution and control, the internal inspection and auditing
systems of financial leasing companies shall comply with the provisions of
Sections 3 and 4, Chapter II of the Law on Credit Institutions.
Chapter III
ACTIVITIES OF FINANCIAL
LEASING COMPANIES
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1. Mobilizing capital from the following
sources:
a/ Accepting deposits with a one-year or longer
term from organizations and individuals according to the regulations of the
State Bank;
b/ Issuing bonds, deposit certificates and other
valuable papers with a term of over one year with a view to mobilizing capital
from organizations and individuals inside and outside the country when it is so
approved by the State Bank Governor;
c/ Borrowing capital from financial and credit
institutions inside and outside the country;
d/ Receiving capital from other sources
according to the regulations of the State Bank.
2. Financial leasing.
3. Purchasing and sub-leasing in the form of
financial leasing (hereinafter called purchasing and sub-leasing), In this
form, the financial leasing company purchases machinery, equipment, transport
means and movables owned by the lessee and sub-leases them to the lessee for continued
use in service of their activities.
4. Advising clients on matters related to
financial leasing operations.
5. Providing services of entrustment, asset
management and guaranty related to financial leasing activities.
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Article 17.-
1. Financial leasing
contracts mean arrangements between the lessor and the lessee on the lease of
one or a number of machines, equipment, transport means and other movables
according to the provisions of Article 1 of this Decree and suited to the
rights and obligations of the parties.
2. Financial leasing contracts must be made in
writing in accordance with law provisions. The contracts must clearly state the
handling measures to be taken once they terminate ahead of time.
3. The lessors and the lessees must not
unilaterally cancel the financial leasing contracts (except the cases specified
in Article 27 of this Decree).
Article 18.- The
financial leasing companies may directly import machinery, equipment, transport
means and movables which the lessees have been permitted to purchase, import
and use according to current law provisions (hereinafter called the leased
assets permitted for import).
Article 19.- Assets for
financial lease must be registered at the Center for Registration of Secured
Transactions. The Ministry of Justice shall guide in detail the registration of
these assets.
Article 20.- For leased
assets being transport means and fishing ships and boats with registration
certificates, the financial leasing companies shall keep the original
registration certificates and the lessees shall, when using such means, keep
the copies which are certified by the State notary public and confirmed by the
financial leasing companies, in order to use the means during the leasing term.
The financial leasing companies shall put their confirmation in only one copy
of the means registration certificates, which has been certified by the State
notary public. If such assets are used along international routes, the
financial leasing companies shall keep the copies of their registration
certificates, which have been certified by the notary public.
Article 21.- For leased
assets which require use permits, the competent bodies shall consider the
granting of use permits to the lessees on the basis of the documents proving
the financial leasing companies ownership over such leased assets and the
financial leasing contracts. The State Bank shall coordinate with the use
permit-granting bodies in guiding the implementation of this provision.
Article 22.-
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2. Leased assets shall be recovered according to
the provisions of Clause 1, Article 28 of this Decree; if the recovered assets
are those imported from abroad, they shall, when re-exported, be exempt from
export duty.
3. Where the ownership over the leased assets is
transferred to the lessees upon the expiry of the leasing term through the
assignment or sale of the leased assets, the lessees shall not have to pay
registration tax.
Article 23.- The
lessors have the rights to:
1. Request the lessees to supply quarterly
reports, annual financial settlements and information on the situation of the
latters production and business activities as well as matters related to the
leased assets.
2. Inspect the management and use of the leased
assets.
3. Purchase and import assets at the lessees
requests.
4. Affix the ownership signs onto the leased
assets throughout the leasing term.
5. Transfer their rights and obligations in the
financial leasing contracts to another financial leasing company. In this case
the lessors are only required to inform in writing in advance the lessees
thereof.
6. Request the lessees to pay deposits or to
find guarantors for the performance of the financial leasing contracts if it is
deemed necessary.
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8. Request the lessees to pay damage
compensation if the latter breach the financial leasing contracts.
Article 24.- The
lessors have the obligations to:
1. Sign asset purchase contracts with the
suppliers under the conditions already agreed upon between the lessees and the
suppliers. The lessors shall not be responsible for the non-delivery of the
assets or the failure to deliver the assets under the conditions already agreed
upon between the lessees and the suppliers.
2. Register the ownership of, and carry out the
procedures to buy insurance for, the leased assets.
3. Fulfill properly all the contractual
commitments.
Article 25.- The lessees
have the rights to:
1. Select and agree with the suppliers upon the
technical specifications, types, prices, modes and time limits for delivery,
installation and warranty of the leased assets.
2. Directly receive the leased assets from the
suppliers as agreed upon in the asset purchase contracts.
3. Decide on the purchase or continued lease of
assets upon the expiry of the financial leasing contracts.
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Article 26.- The
lessees have the obligations to:
1. Supply quarterly reports, annual financial
settlements and information on the situation of their production and business
activities as well as matters related to the leased assets at the lessors� request; create conditions
for the lessors to check the leased assets.
2. Be responsible for the selection and
agreement mentioned in Clause 1, Article 25 of this Decree.
3. Use the leased assets for the right purposes
as agreed upon in the financial leasing contracts; refrain from transferring
the right to use the leased assets to other individuals and/or organizations
without the prior written consent of the lessors.
4. Pay the rents as agreed upon in the financial
leasing contracts and pay other expenses related to the import of, taxes,
ownership registration fee and buy insurance for, the leased assets.
5. Bear all risks of loss and damage of the
leased assets and be responsible for all consequences caused by the use of the
leased assets to other organizations and individuals in the process of using
the leased assets.
6. Maintain and repair the leased assets during
the leasing term. Refrain from erasing or damaging the ownership signs affixed
on the leased assets.
7. Refrain from using the leased assets for
mortgage, pledge or as security for performance of other obligations.
8. Fulfill properly all contractual commitments.
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1. The lessors may
terminate the financial leasing contracts ahead of schedule in one of the
following circumstances:
a/ The lessees fail to pay rents as prescribed
in the financial leasing contracts;
b/ The lessees breach the financial leasing
contracts’ terms;
c/ The lessees become bankrupt or dissolved;
d/ The guarantors become bankrupt or dissolved
and the lessors refuse to accept the lessees�
request to terminate the guaranty or substitute other guarantors.
2. The lessees may terminate the contracts ahead
of schedule once the lessors commit one of the following violations:
a/ The lessors fail to deliver the leased assets
on time;
b/ The lessors breach the contracts.
3. The financial leasing contracts may terminate
ahead of the leasing term if the leased assets are lost or irreparably damaged.
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Article 28.-
1. Where a financial
leasing contract is terminated ahead of schedule in one of the circumstances
specified in Clause 1, Article 27 of this Decree, the lessee shall have to
immediately pay all the remaining rent to the lessor. If the lessee is unable
to pay such amount, the lessor may immediately recover the leased assets and
the lessee shall have to pay compensation for material damage to the lessor.
After recovering the leased assets, the lessor may transfer or lease them to
another lessee.
2. The lessor’s ownership over the leased assets
throughout the leasing term shall not be affected when the lessee becomes bankrupt,
dissolved or insolvent. The leased assets shall not be regarded as those of the
lessee when the lessee’s assets are handled for payment of debts to other
creditors.
3. Where a financial leasing contract terminates
ahead of schedule as prescribed in Clause 2, Article 27 of this Decree, the
lessor shall have to pay damage compensation to the lessee.
4. Where a financial leasing contract terminates
ahead of schedule as prescribed in Clause 3, Article 27 of this Decree, the
lessor shall have to return to the lessee the asset insurance amount when the
lessee has fully paid the rent to the lessor and the lessor has already
received such insurance amount from the insurance agency.
Article 29.- The financial
leasing companies shall not be allowed to finance-lease assets to the subjects
specified in Clause 1, Article 77 of the Law on Credit Institutions.
Article 30.-
1. The financial leasing
companies shall not be allowed to finance-lease assets under preferential
conditions to the subjects specified in Clause 1, Article 78 of the Law on
Credit Institutions.
2. The total value of assets leased to the
subjects specified in Clause 1 of this Article must not exceed 5% of the own
capital of a financial leasing company
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1. The financial leasing
companies shall have to maintain the safety assurance percentages specified in
Article 81 of the Law on Credit Institutions and guiding documents of the State
Bank.
2. The limits on financial lease to a single
client:
a/ The total financial leasing amount to a
single client must not exceed 30% of the own capital of a financial leasing
company, except for cases where financial leasing amounts come from the
entrusted capital sources of the Government, organizations, individuals or
lease clients being credit institutions;
b/ Where a clients leasing need exceeds 30% of
the own capital of a financial leasing company or a client needs to lease from
various sources, the financial leasing companies may effect a combined capital
lease according to the regulations of the State Bank Governor. In special
cases, the provisions of Point c, Clause 1, Article 79 of the Law on Credit
Institutions shall apply.
Chapter IV
FINANCE, COST-ACCOUNTING
AND REPORTING
Article 32.- The
financial leasing companies may open deposit accounts at the State Bank and
banks operating on the Vietnamese territory. The opening of deposit accounts at
banks outside the Vietnamese territory must be permitted by the State Bank.
Article 33.-
1. The fiscal year of the
financial leasing companies starts from January 1 and ends on December 31 of
the calendar year.
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Article 34.- The
financial leasing companies shall have to make deductions for risk reserves and
account them into their operation expenses. The deduction for and use of risk
reserves shall comply with the State Banks regulations.
Article 35.- Profits
and deductions for setting up of various funds of the financial leasing
companies shall comply with the Governments regulations on the financial regime
of credit institutions.
Article 36.- The
transfer of profits and assets abroad by the foreign parties to the
joint-venture financial leasing companies and the financial leasing companies
with 100% foreign capital shall comply with the provisions of Article 112 of
the Law on Credit Institutions.
Article 37.- The
financial leasing companies shall not be allowed to purchase or invest in their
fixed assets with over 50% of their own capital.
Article 38.- The
financial leasing companies shall have to apply the accounting, statistical and
auditing regimes according to the Government’s regulations on the financial
regime of credit institutions.
Chapter V
INSPECTION, SPECIAL
CONTROL, BANKRUPTCY, DISSOLUTION AND LIQUIDATION
Article 39.-
1. The financial leasing
companies shall submit to the inspection and supervision as prescribed by law.
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Article 40.- The
special control, bankruptcy, dissolution and liquidation of the financial
leasing companies shall comply with the provisions of Chapter V of the Law on
Credit Institutions.
Article 41.- The
commendation, and handling of violations in financial leasing activities shall
comply with the provisions of Chapter X of the Law on Credit Institutions.
Chapter VI
IMPLEMENTATION
PROVISIONS
Article 42.- This
Decree takes effect 15 days after its signing and replaces the Governments
Decree No. 64/CP of October 9, 1995.
The State Bank of Vietnam shall assume the prime
responsibility and coordinate with the concerned agencies in guiding the
implementation of this Decree.
Article 43.- The
ministers, the heads of the ministerial-level agencies, the heads of the
agencies attached to the Government and the presidents of the Peoples
Committees of the provinces and centrally-run cities shall have to implement
this Decree.
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