Article 1.- This Decree prescribes the organization and operation of foreign credit institutions and their representative offices in Vietnam.

Article 2.-

1. Foreign credit institutions are allowed to operate in Vietnam in the following forms:

a/ Foreign banks� branches;

b/ Joint-venture banks;

c/ Non-bank credit institutions: Joint-venture financial leasing companies; financial leasing companies with 100% foreign capital; joint-venture financial companies; financial companies with 100% foreign capital and other non-bank credit institutions.

2. Foreign credit institutions are allowed to place their representative offices in Vietnam.

Article 3.- The State Bank of Vietnam (hereafter referred to as the State Bank) is the body which grants and withdraws licenses, manages and inspects operation of different forms of foreign credit institutions in Vietnam. The licensing shall be considered according to economic development requirements and financial market in Vietnam.

1. Foreign bank�s branch is a dependent unit of such bank, which takes responsibility for all obligations and commitments made by its branch in Vietnam. The foreign bank�s branch shall have the rights and obligations prescribed by Vietnamese law and shall operate according to their establishment licenses as well as the relevant provisions of Vietnamese law.

3. Branches of the same foreign bank allowed to operate in Vietnam are the units organized indepen-dently from each other but attached to the foreign bank and allocated capital for their operation by the latter.

Article 5.-

1. Joint-venture bank is a bank established with capital contributed by the Vietnamese party (including one or several Vietnamese banks) and the foreign party (including one or several foreign banks) on the basis of a joint-venture contract. The joint-venture bank is a Vietnamese legal person that is headquartered in Vietnam and operates according to its establishment and operation license as well as the relevant provisions of Vietnamese law.

2. Branches of the same joint-venture bank are dependent units of such bank.

Article 6.-

1. Joint-venture financial leasing company or joint-venture financial company is a joint-venture non-bank credit institution established with capital contributed by the Vietnamese party and the foreign party on the basis of a joint-venture contract, which is a Vietnamese legal person, headquartered in Vietnam and operates according to its establishment and operation license as well as the relevant provisions of Vietnamese law.

2. A 100% foreign-owned financial leasing company or financial company is a company set up with 100% capital of a foreign credit institution, which is a Vietnamese legal person, headquartered in Vietnam and operates according to its establishment and operation license as well as the relevant provisions of Vietnamese law.

Article 7.- Representative offices of foreign credit institutions are the dependent units of such foreign credit institutions in Vietnam, which operate according to Vietnamese law. Representative offices of foreign credit institutions shall not be allowed to carry out business activities in Vietnam.

1. Foreign competent supervisory and inspection agencies and foreign banks having branches in Vietnam shall be entitled to examine and/or inspect the operation of foreign banks� branches in Vietnam. Before examination and/or inspection, the foreign competent supervisory and inspection agencies or foreign banks concerned shall have to notify in writing the State Bank of the contents as well as the time of starting and ending the examination and/or inspection.

2. After completing the examination and/or inspection of foreign banks� branches in Vietnam, the foreign competent supervisory and inspection agencies and foreign banks shall have to report to the State Bank on the examination and/or inspection results within 30 days after the completion of such examination and/or inspection.

Article 9.-

1. The official documents for transactions between foreign credit institutions operating in Vietnam and the Vietnamese State agencies must be made in Vietnamese language or in both Vietnamese and a commonly used foreign language.

2. Documents included in dossiers of application for licenses of foreign credit institutions must be made in Vietnamese language and a commonly used foreign language.

Chapter II

ORGANIZATION AND ADMINISTRATION

Article 10.- Foreign credit institutions are allowed to operate in Vietnam when they fully meet conditions stipulated in Article 106 of the Law on Credit Institutions and are granted with establishment and operation licenses, licenses for opening branches or licenses for opening representative offices (hereafter referred collectively to as licenses) by the State Bank of Vietnam.

Article 11.-

1. Dossiers of application for licenses submitted by foreign credit institutions to the State Bank for consideration shall be made according to Article 108 of the Law on Credit Institutions.

2. A foreign credit institution�s dossier of application for license must be made in two sets, one in Vietnamese language and another in a commonly used foreign language. The dossier set in the commonly used foreign language which is made and certified in the concerned foreign country must be legalized by the consular agencies. The copies of the dossier�s Vietnamese version and the translations from the foreign language into Vietnamese must be notarized by the Vietnamese Notary Public.

Article 12.- Foreign credit institutions� operation duration in Vietnam shall be determined in their licenses, concretely as follows:

1. For foreign banks� branches: not more than 20 years;

2. For joint-venture banks, joint-venture financial companies and 100%- foreign owned financial companies: not more than 30 years;

3. For joint-venture financial leasing companies and 100%-foreign owned financial leasing companies: not more than 50 years.

4. For representative offices of foreign credit institutions: not more than 5 years.

Article 13.-

1. Foreign credit institutions wishing to extend their operation duration in Vietnam may be considered by the State Bank on the case-by-case basis; each extended duration must not exceed the duration written in the previous license.

2. Foreign credit institutions having a demand to extend their operation duration shall have to submit applications and dossiers for extension before the expiry of their operation durations as stated in the respective licenses: at least 180 days for foreign credit institutions stipulated in Clause 1, Article 2 of this Decree and 30 days for foreign credit institutions� representative offices.

Article 14.-

1. Representative offices of foreign credit institutions operating in Vietnam shall terminate operation in the following cases where:

a/ Their operation duration stated in the licenses has expired. The State Bank shall make written notices on the termination of operation of such representative offices in Vietnam;

b/ They voluntarily terminate their operation. In this case, at least 60 days before terminating operation of their representatives offices, the concerned foreign credit institutions shall have to submit written request therefor to the State Bank;

c/ Their licenses are withdrawn in one of the cases mentioned in Points a, b and e, Clause 1, Article 29 of the Law on Credit Institutions and when the foreign credit institutions have gone bankrupt;

d/ Foreign credit institutions licensed to operate according to the provisions of Clause 1, Article 2 of this Decree have already opened their representative offices in the same localities (provinces or centrally-run cities).

2. Before terminating operation, representative offices of foreign credit institutions shall have to fulfill all obligations and procedures prescribed by law.

3. Representative offices of foreign credit institutions shall have to return their licenses and operation registration papers to the Vietnamese agencies that have issued such licenses and papers to them by the day of termination of their operation at the latest.

Article 15.- When foreign banks dissolve or go bankrupt, their branches in Vietnam shall have to terminate operation. Before terminating operation, the concerned foreign banks shall have to fulfill all obligations and all necessary procedures as prescribed by Vietnamese law and under the State Bank�s guidance.

Article 16.- Within 12 months after receiving licenses, foreign banks� branches, joint-venture banks, joint-venture non-bank credit institutions and those with 100% foreign capital as well as representative offices of foreign credit institutions shall have to commence operation.

Article 17.- At least 30 days before commencing operation, a foreign credit institution licensed according to Clause 1, Article 2 of this Decree shall have to make the announcement on a centrally-run newspaper and a newspaper run by the locality where such credit institution is headquartered for five consecutive issues. The newspaper announcement shall cover major information written in the credit institution�s license, its business registration certificate and the date of commencement of its operation.

Article 18.-

1. Foreign credit institutions licensed to operate in Vietnam shall have to pay fee in USD. The fee levels for each time of licensing and license extension are stipulated concretely as follows:

a/ For a license to open a foreign credit institution�s representative office: 5,000 USD (five thousand US dollars);

b/ For a license to open a foreign bank�s branch, a license for the establishment and operation of a joint-venture bank: 30,000 USD (thirty thousand US dollars);

c/ For a license for the establishment and operation of a joint-venture non-bank credit institution or a non-bank credit institution with 100% foreign capital: 10,000 USD (ten thousand US dollars);

d/ For a license to open a joint-venture bank�s branch: 5,000 USD (five thousand US dollars);

e/ For a license to open a non-bank credit institution�s branch: 5,000 USD (five thousand US dollars);

f/ For a license to open a non-bank credit institution�s representative office: 3,000 USD (three thousand US dollars);

2. The licensing fee-payment procedures shall comply with the State Bank�s guidance.

Article 19.- Foreign credit institutions operating in Vietnam shall be entitled to import equipment and appliances in direct service of their operation as prescribed by law.

Article 20.-

1. Foreign banks are allowed to open branches in the provinces and centrally-run cities but not allowed to open such branches� subsidiaries. Where their branches have been opened, foreign banks are not allowed to place representative offices. Foreign banks� branches are not allowed to open transaction offices in any forms rather than their offices.

2. Joint-venture banks are allowed to open transaction bureaus where they are headquatered as well as branches in the provinces and centrally-run cities according to Articles 32 and 33 of the Law on Credit Institutions.

3. Non-bank credit institutions are allowed to open branches and representative offices in the provinces and centrally-run cities according to Articles 32 and 33 of the Law on Credit Institutions.

4. The dossiers and procedures of application for opening transaction bureaus, branches and representative offices as mentioned in Clauses 2 and 3 of this Article shall comply with the State Bank�s regulations.

Article 21.- The management, administration, control and inspection as well as internal audit of foreign credit institutions operating in Vietnam shall comply with the provisions of Items 3 and 4, Chapter II of the Law on Credit Institutions.

1. Each branch of a foreign bank must have a general director (director) to run its daily work.

2. The general directors (directors) of foreign banks� branches shall be appointed and dismissed by the competent level of the concerned foreign banks but must be approved by the Governor of the State Bank.

1. The leading body of joint-venture banks and joint-venture non-bank credit institutions is the Managing Board. A Managing Board shall comprise the chairman, vice chairmen and its members. The number of members of the Managing Board in a joint-venture credit institution shall depend on the capital contributions of the foreign party and the Vietnamese party to such joint- venture credit institution. Where each party to the joint venture has a credit institution, each party must have at least two members participating in the Managing Board. Where many credit institutions participate in the joint venture, each credit institution must nominate at least one member to join the Managing Board.

2. The Managing Board�s term shall be agreed upon by the parties to the joint-venture bank or joint-venture non-bank credit institution but shall not exceed 5 years.

3. The general director or the first deputy general director of the joint-venture bank or joint-venture non-bank credit institution must be the Vietnamese party�s representative.

4. The tasks and powers of the chairman of the Managing Board, the general director and the first deputy general director shall be stated in the charter of the joint-venture bank or joint-venture non-bank credit institution.

Article 24.-

1. The general director of a non-bank credit institution with 100% foreign capital shall be the person who represents the credit institution and take responsibility for all activities of such credit institution before Vietnamese law.

2. The general director�s tasks and powers shall be stated in the charter of the non-bank credit institution with 100% foreign capital.

Article 25.-

1. Foreign credit institutions are allowed to open their representative offices in a number of provinces and centrally-run cities of Vietnam but only one representative office in each province or centrally-run city.

2. Each representative office of a foreign credit institution in Vietnam must have its own chief.

1. The percentages of charter capital contribution by the foreign party and the Vietnamese party to a joint-venture bank shall be agreed upon by the involved parties and approved by the State Bank before the licensing. For joint-venture banks performing the transactions of commercial banks, the foreign party�s capital contribution must not exceed 50% of the charter capital of the joint-venture bank.

2. The foreign party�s capital contribution to a joint-venture non-bank credit institution shall not be lower than 30% of the institution�s charter capital.

3. In cases where its charter capital is partially contributed in kind, the concerned joint-venture bank or joint-venture non-bank credit institution shall have to produce to the State Bank valid papers proving its ownership right over as well as value of the contributed objects. The value of capital contribution in kind shall be determined on the basis of the market price at the time of capital contribution and must be certified by an independent expertise organization.

1. The Vietnamese party and the foreign party to a joint-venture credit institution shall have the right to transfer their contributed capital but must comply with the provisions of Article 26 of this Decree and prioritize the parties to the joint-venture credit institution in such transfer. In cases where the capital is transferred to organization(s) outside the joint venture, the transfer conditions shall not be more favorable than those for the transfer to the parties inside the joint-venture credit institution. The capital transfer must be agreed upon by the parties to the joint-venture credit institution.

2. Non-bank credit institutions with 100% foreign capital shall have the right to transfer their capital but must prioritize Vietnamese organizations.

3. The capital-transfer percentages and conditions for joint-venture banks and joint-venture non-bank credit institutions must be specified in the charters of the credit institutions and in accordance with the provisions of law. In cases where the transferred charter capital amount exceeds the prescribed level, the capital transfer shall be effective only after it is ratified by the State Bank.

4. In case of capital transfer with profits arising therefrom, the transferor shall have to pay tax in accordance with the provisions of Vietnamese law.

Article 28.- Parties to a joint-venture bank or joint-venture non-bank credit institution shall share among themselves profits and risks of the joint-venture credit institution according to their respective capital contributions, except otherwise agreed upon by the concerned parties in the joint-venture contract.

Article 29.- The amount of charter capital or allocated capital of a foreign credit institution operating in Vietnam must be fully reflected on the balance sheet of accountancy accounts of such credit institution.

Chapter III

OPERATION�S CONTENTS

Article 30.- Foreign banks� branches may perform a number or all of the following transactions:

1. Receiving time deposits and demand deposits according to the regulations of the State Bank; not (not) receiving savings deposits in any forms;

2. Issuing deposit certificates and valuable papers;

3. Borrowing capital from credit institutions inside and outside the country;

4. Borrowing short-term capital from the State Bank;

5. Providing short-, medium- and long-term loans;

6. Discounting, re-discounting, pledging commercial papers and valuable papers;

7. Providing bank guaranty;

8. Trading in foreign exchange;

9. Providing payment and treasury services;

10. Opening deposit accounts at foreign credit institutions according to the regulations of the State Bank;

11. Acting as agents for the payment of credit cards;

12. Providing the assigned-collection and -payment services;

13. Providing trust services and property-management services;

14. Providing financial and monetary consultancy services.

Article 31.- Joint-venture banks may perform a number or all of the following transactions:

1. Receiving time deposits and demand deposits;

2. Issuing deposit certificates and valuable papers;

3. Borrowing capital from credit institutions inside and outside the country;

4. Borrowing short-term capital from the State Bank;

5. Providing short-, medium- and long-term loans;

6. Discounting, re-discounting, pledging commercial papers and valuable papers;

7. Providing bank guaranty;

8. Trading in foreign exchange;

9. Providing payment and treasury services;

10. Opening deposit accounts at foreign credit institutions according to the regulations of the State Bank;

11. Acting as agents for the payment of credit cards;

12. Providing the assigned-collection and -payment services;

13. Providing trust services and property-management services;

14. Providing financial and monetary consultancy services.

Article 32.- Joint-venture financial leasing companies and 100% -foreign owned financial leasing companies may perform a number or all of the following transactions:

1. Receiving deposits of one-year term or longer, not (not) receiving demand deposits and savings deposits;

2. Issuing bonds and valuable papers;

3. Borrowing capital from credit institutions inside and outside the country;

4. Financial leasing;

5. Providing bank guaranty;

6. Providing consultancy service and other services relating to financial leasing activities;

7. Providing trust services and property-management services.

Article 33.- Joint-venture financial companies and 100%-foreign owned financial companies may perform a number or all of the following transactions:

1. Receiving deposits of one-year term or longer, not (not) receiving demand deposits and savings deposits;

2. Issuing bonds and valuable papers of one-year term or longer;

3. Borrowing capital from credit institutions inside and outside the country;

4. Providing short-, medium- and long-term loans;

5. Discounting, re-discounting, pledging commercial papers and valuable papers;

6. Providing bank guaranty;

7. Trading in foreign exchange;

8. Performing trust services and property-management services;

9. Providing financial and monetary consultancy services.

Article 34.- Representative offices of foreign credit institutions may carry out all or a number of the following activities according to the contents of their licenses granted by the State Bank:

1. Functioning as liason offices;

2. Probing market;

3. Promoting the construction of investment projects of foreign credit institutions in Vietnam;

4. Stepping up and supervising the performance of contracts and agreements already signed between foreign credit institutions and Vietnamese credit institutions as well as Vietnamese enterprises, and projects funded by foreign credit institutions in Vietnam;

5. Conducting other activities in accordance with Vietnamese law when permitted by the State Bank.

Article 35.- If having a demand and getting permission from the State Bank, foreign banks� branches, joint-venture banks and non-bank credit institutions may conduct other transactions in conformity with the relevant provisions of Vietnamese law.

1. In the licenses granted to foreign banks� branches, joint venture banks and non-bank credit institutions, the State Bank shall specify the operations to be carried out in Vietnam by the licensed credit institutions suitable to their forms and scope of activities.

2. Any amendments and/or supplements to the licenses of foreign credit institutions operating in Vietnam shall be made by the State Bank.

Article 37.- In the course of operation, foreign credit institutions operating in Vietnam shall have to comply with the stipulations on restrictions to ensure safety for the operation of credit institutions as defined in Item 5, Chapter III of the Law on Credit Institutions.

Article 38.-

1. Foreign banks� branches, joint-venture banks and non-bank credit institutions operating in Vietnam shall have to conduct accounting in strict compliance with the system of accountancy accounts prescribed by the State Bank and use vouchers, make accountancy reports as well as financial reports according to the regulations of the State Bank.

2. The currency used in accounting is Vietnam dong. In cases where a foreign credit institution operating in Vietnam wishes to make the accounting in foreign currency(ies) in order to make reports to their overseas head offices, they must obtain consent from the State Bank.

Chapter IV

IMPLEMENTATION PROVISIONS

Article 39.- This Decree takes effect 15 days after its signing and replaces the earlier legal documents which are contrary to this Decree.

Article 40.- Foreign banks� branches, foreign banks� dependent subsidiaries, joint-venture banks, non-bank credit institutions and representative offices of foreign credit institutions operating in Vietnam shall have to readjust their organization and operation to make them conform to this Decree as well as the regulations of the State Bank.

Article 41.- The Governor of the State Bank shall have to guide the implementation of this Decree.

On behalf of the Government

Prime Minister