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KPMG Legal Update

At the end of June 2023 the State Bank of Vietnam (“SBV”) released Circular 06/2023/TT-NHNN dated 28 June 2023 (“Circular 06”) amending Circular 39/2016/TT-NHNN dated 30 December 2016 (“Circular 39”) on lending activities of credit institutions and branches of foreign banks in Vietnam and Circular 08/2023/TT-NHNN dated 30 June 2023 (“Circular 08”) on conditions for non-government guaranteed cross-border foreign loans, which replaces Circular 12/2014/TT-NHNN dated 31 March 2014 (“Circular 12”) on the same.

Circular 08 came into effect on 15 August 2023 and Circular 06 which comes into effect on 1 September 2023, will directly and materially impact investors’ funding plans for projects and business initiatives in Vietnam, particularly for capital contribution or acquisition of shares in target companies, for refinancing cross-border debt and for other loan utilization purposes with certin new restrictions while also provide more liberalized approach in some other areas.

Since the issuance of Circular 06, there has been significant push-back from businesses, especially within the real estate sector as they are the most affected. The SBV has taken note of such feedback and is contemplating certain amendments to Circular 06 to address the concerns raised. KPMG will keep you updated of any official development:

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