Foreign Borrowing by FDI Enterprises in Vietnam: 2026 Rules

“Foreign borrowing” is among the most confusing phrases in corporate finance advisory — even professional materials mix up two entirely different borrowing directions: (a) an FDI enterprise borrowing from abroad to bring capital into Vietnam, and (b) an enterprise borrowing from domestic credit institutions to invest abroad. Each follows its own legal framework, with different conditions, procedures, and sanctions — and direction (b) has just received new 2026 rules.

This article de-confuses the two directions with a comparison table, then maps the conditions, registration procedures, and sanctions for each.

1. Comparing the two “foreign borrowing” directions

Criterion	Direction (a): FDI enterprise borrowing from abroad	Direction (b): Borrowing domestically to invest abroad
Lender	Organizations/individuals abroad	Credit institutions in Vietnam
Capital flow	Capital flows into Vietnam	Capital flows out of Vietnam
Governing instruments	Foreign Exchange Ordinance 28/2005 (amended 06/2013); Decree 219/2013/ND-CP; Circular 08/2023/TT-NHNN (amended by Circular 19/2024/TT-NHNN)	Circular 32/2026/TT-NHNN (effective 18/8/2026; replacing Circular 36/2018/TT-NHNN)
Notable cap/condition	Short- vs. medium/long-term conditions; loan registration with the SBV	70% cap of total investment; 5 conditions in Article 5

Prohibited: do not cite Circular 12/2014/TT-NHNN or Circular 36/2018/TT-NHNN as current authority — both are superseded.

2. Direction (a): FDI enterprises borrowing from abroad

Borrowing conditions

Under Circular 08/2023/TT-NHNN (amended by Circular 19/2024/TT-NHNN), offshore borrowers must satisfy conditions on:

Purpose: loan proceeds used strictly for the registered purpose (working capital, project investment);
No Government guarantee — the condition for ordinary commercial borrowing;
Distinct conditions for short-term versus medium/long-term loans (tenor, limits, reporting duties).

Loan registration with the State Bank of Vietnam

Medium- and long-term offshore loans must be registered with the SBV. The dossier includes the loan agreement, the capital-use plan, and documents evidencing eligibility. Drawdown and repayment may only flow through the dedicated capital account after registration.

Sanctions

Misuse of loan proceeds, failure to register, or late reporting may attract administrative penalties in the monetary-banking sector (verify exact fines against Decree 88/2019/ND-CP, amended by Decree 143/2021/ND-CP; this article states no figures without checking the latest original text).

3. Direction (b): Borrowing for outbound investment — the new 2026 rules

Circular 32/2026/TT-NHNN (effective 18 August 2026, replacing Circular 36/2018/TT-NHNN) is the new framework for credit institutions lending for outbound investment. The headline change:

The 70% lending cap

Outstanding loans for outbound investment must not exceed 70% of the projects total investment. Investors must arrange the remaining 30% from equity or other lawful sources.

Five borrowing conditions (Article 5, Circular 32/2026)

A valid Outbound Investment Registration Certificate or relevant foreign-exchange confirmation;
The project is accepted by the host country under its laws;
The project is feasible and the investor demonstrates repayment capacity;
No bad debts at credit institutions for the 24 consecutive months prior;
Satisfaction of the lenders general credit conditions (credit appraisal, collateral).

Sync with the outbound-investment framework

Direction-(b) loans are inseparable from the licensed outbound project — the framework being the Law on Investment 143/2025/QH15 (Article 39 on outbound investment) and Decree 103/2026/ND-CP. Keep the loan dossier consistent with the outbound project dossier (total investment, disbursement schedule, use of proceeds).

4. Common confusions (and how to avoid them)

Confusion 1: Applying Circular 08/2023 conditions to domestic loans for outbound investment — entirely the wrong framework;
Confusion 2: Assuming the 70% cap applies to all foreign loans — it applies only to outbound-investment lending under Circular 32/2026;
Confusion 3: Using direction-(a) offshore loan proceeds for direction-(b) outbound investment without converting the approved purpose — a use-of-proceeds violation;
Confusion 4: Skipping SBV registration for medium/long-term offshore loans — risking unlawful drawdown and penalties.

5. Reading the five conditions of Circular 32/2026 in practice

The five Article 5 conditions look straightforward on paper; in practice each needs careful preparation:

Outbound Investment Registration Certificate: the certificate must still be valid and cover the investment amount the loan supports — an expired or under-sized certificate is the most common rejection reason;
Host-country acceptance: keep the host countrys approval/registration documents legalized and translated; lenders verify these independently;
Feasibility and repayment capacity: the lender stress-tests the projects cash flows — prepare a bankable feasibility study, not just an internal memo;
24-month clean credit history: any bad debt at any credit institution in Vietnam within the window disqualifies the borrower — check CIC credit reports before applying;
General credit conditions: collateral valuation, debt-service coverage ratios, and covenants follow each banks internal policy on top of the circular.

6. Typical timeline for a direction-(b) loan

Outbound project licensing (Investment Registration Certificate) — the prerequisite;
Loan application with feasibility study, host-country approvals, and 24-month credit record;
Bank appraisal and approval — including the 70% cap calculation against total investment;
Disbursement tied to the projects disbursement schedule abroad;
Ongoing reporting — use of proceeds and repayment progress reported to both the lender and the SBV as required.

Misalignment between the loan dossier and the licensed project dossier (different total investment figures, different timelines) is the fastest route to delay — reconcile the two before submission.

7. FAQ

Q: Is a loan from our foreign parent to our Vietnamese subsidiary “foreign borrowing”?
A: Yes — a loan from an offshore organization (including the parent) falls under the foreign-borrowing framework, with corresponding conditions and registration.

Q: Must sub-one-year offshore loans be registered with the SBV?
A: Registration focuses on medium/long-term loans; short-term loans follow separate limit and reporting mechanics — check Circular 08/2023/TT-NHNN (amended) for each tenor.

Q: How is short-term distinguished from medium/long-term offshore borrowing?
A: Circular 08/2023/TT-NHNN (as amended) sets different conditions, limits, and reporting duties by tenor. Identify your loans tenor first — the registration and management track follows from it — and confirm against the amended circulars text.

Q: Can an offshore loan be disbursed in VND?
A: Offshore loan mechanics, currencies, and accounts are governed by the foreign-exchange framework (Ordinance 28/2005, Decree 219/2013, Circular 08/2023). Structure the currency and disbursement accounts exactly as registered with the SBV; deviations can invalidate the registration.

8. Legal bases

Foreign Exchange Ordinance 28/2005/PL-UBTVQH10 (amended by Ordinance 06/2013/UBTVQH13)
Decree 219/2013/ND-CP
Circular 08/2023/TT-NHNN (amended by Circular 19/2024/TT-NHNN)
Circular 32/2026/TT-NHNN (effective 18/8/2026; replacing Circular 36/2018/TT-NHNN)
Law on Investment 143/2025/QH15 (Art. 39); Decree 103/2026/ND-CP
Decree 88/2019/ND-CP (amended by Decree 143/2021/ND-CP) — sanctions

Note: Do not cite Circulars 12/2014 and 36/2018 as current authority. Verify fine amounts against the latest original text. Regulations consolidated as of 14 October 2026.

Transparency note: This article was prepared by the FLAW AI Legal Council; its legal content is awaiting review by the QA Council before approval. This is general legal information, not a substitute for legal advice on a specific matter.

For advice on a specific case, please contact FLAT Law Firm.