Foreigners may be permitted to open saving accounts in local currency

By Nguyen Le - Jul 14, 2017 | 05:10 PM GMT+7

TheLEADERAccording to the draft circular of the State Bank of Vietnam (SBV), non-resident foreigners can deposit savings in both local and foreign currency at commercial banks, a positive move not only to limit speculation in the market but also guarantee legal reights for non-residents presenting in Vietnam.

Foreigners may be permitted to open saving accounts in local currency
If this new circular were issued, it would be a big step forward for Vietnam. Photo: Internet

SBV has been collecting comments on the draft circular of term deposit transactions at credit institutions and foreign banks’ branches.

According to SBV, the regulation will allow non-resident foreigners to deposit savings in VND, foreign currency at commercial banks to limit hot capital flows, speculation in the currency market, as well as guarantee legal rights for non-residents presenting in Vietnam.

As per prevailing regulations, non-resident individuals are those who have been present in Vietnam including foreigners residing in Vietnam for less than 12 months; foreigners studying, treating, traveling or working for representative offices, executive offices, operation offices, diplomatic and consular representations of foreign legal units in Vietnam and they cannot open the interest saving account.

Whilst, foreign citizens and businesses that have legal person status and are present in Vietnam under the form of branches, representative offices, executive offices, operation offices, diplomatic and consular representations can open term deposit accounts in order to serve the activities of these subjects.

According to the draft circular, in order to deposit interest-rate savings, non-resident foreigners are only allowed to use VND, foreign currency on their VND payment account and foreign currency payment account. 

The regulation is aligned with the direction of developing non-cash payment methods. This aims to manage foreign exchange, thus facilitating the management and supervision of state agencies.

Under the provisions of the Ordinance on Foreign Exchange, currently there has been no provision allowing foreign residents and non-residents to deposit savings in local and foreign currencies at credit institutions.

Experts said that if this new circular were issued, it would be a big step forward for Vietnam. Because in an era of flat world and global citizen, it is important for countries to remove the barriers.