Foreign exchange management for overseas investment in oil and gas activities

Currency used for overseas investment in oil and gas activities includes foreign currency from legal sources; Vietnamese Dong.

According to the State Bank of Vietnam, currently, foreign exchange management for overseas investment in the oil and gas sector is implemented according to the provisions of Circular 31/2018/TT-NHNN dated December 18, 2018 guiding foreign exchange management for overseas investment in oil and gas activities (Circular 31) and relevant legal provisions.

On October 15, 2024, the Government issued Decree No. 132/2024/ND-CP regulating foreign investment in oil and gas activities (Decree 132), effective from December 5, 2024.

Implementing the direction of building an e-Government, aiming to simplify administrative procedures and facilitate investors in the process of submitting documents, the draft Circular replacing Circular 31 supplements regulations to comply with the provisions of Decree 132, including regulations guiding investors to submit registration documents and register changes in foreign exchange transactions with the State Bank electronically.

Currency used for overseas investment in oil and gas activities

According to the draft, the currencies used for overseas investment in oil and gas activities include:

Foreign currency from legal sources as prescribed by law in an account at a licensed bank or purchased at a licensed bank.

Vietnamese Dong in case of transferring investment capital to a country or territory receiving investment where Vietnam and that country or territory have signed bilateral or multilateral agreements regulating the use of Vietnamese Dong in payment and money transfer transactions.

Principles of opening and using foreign currency accounts before investment

The draft stipulates the principle: Investors must open 01 foreign currency payment account before investment (called pre-investment foreign currency account) to carry out revenue and expenditure transactions.

If a project has multiple investors participating, each investor must open a separate foreign currency account before investing.

Investors with many investment projects abroad are only allowed to open 01 foreign currency account corresponding to each project.

In case of changing the pre-investment foreign currency account, the investor must open another pre-investment foreign currency account, convert the entire balance to the new account and close the previously opened pre-investment foreign currency account.

In case the overseas investment project is not established or the overseas investment registration certificate is not granted, the investor must transfer the amount of foreign currency transferred abroad but not fully used to Vietnam (if any) through the foreign currency account before investment and close the account.

After the project is granted a certificate of registration for overseas investment, the pre-investment foreign currency account must be used as the investment capital account.

Receipt and payment transactions on foreign currency accounts before investment

Transactions collected on foreign currency accounts before investment: Collecting foreign currency transferred from the investor's payment account; collecting foreign currency purchased from a licensed bank in accordance with the provisions of law; collecting foreign currency transferred back to Vietnam from abroad in case the investor does not use up the amount transferred abroad to meet the expenses for the formation of an overseas oil and gas project before being granted a Certificate of Overseas Investment Registration as prescribed in Clause 2, Clause 3, Article 13 of Decree 132/2024/ND-CP or is reimbursed by the foreign party for the expenses for the formation of an overseas investment project in the oil and gas industry; collecting foreign currency balance transfers in case of changing the foreign currency account before investment as prescribed; collecting interest from the balance in the account as prescribed by law.

Payment transactions on foreign currency accounts before investment: Payment for transferring foreign currency abroad for the purposes specified in Clause 2, Article 13 of Decree 132/2024/ND-CP; payment for selling foreign currency to licensed banks; payment for transferring foreign currency to investors' payment accounts; payment of service fees related to account management and money transfer transactions through accounts according to regulations of licensed banks.

Please read the full draft and give your comments here.

Minh Hien

Source: https://baochinhphu.vn/quan-ly-ngoai-hoi-dau-tu-ra-nuoc-ngoai-trong-hoat-dong-dau-khi-102250523101111958.htm