Loan Structure in Vietnam for Foreigner.
A wise loan structure in Vietnam
Recently, we realized that many foreigners wishing
to invest in Vietnam but to avoid the complicated
procedure and the tough requirements applied to
the foreigner, some foreigners select to facilitate
and fund the Vietnamese trustee to set up the local
company for the sake of the foreigner. To have capital
to run such local company, the foreigner will lend a
loan to the Vietnamese trustee.
If the nominee structure is selected, in order to
protect the interests of the foreigner, the foreigner
should note the followings:
- The loan agreement should be entered before
disbursing any amount, under which, there are
some main terms about the lending term, interest
rate (if any), repayment plan, call option right at
any time when the laws permit the foreigner to
own the capital in such company from time to time
and other main issues;
- Each loan amount should be transferred into the
bank account of the borrower with the description
on the bank record “disbursing the loan under
loan agreement);
- To control the operations of the company, the
foreigner must be appointed as the CEO with the
certain power to run the company.
Accordingly, there are 03 options for the
foreigner to select:
Option 1:
The foreigner is not allowed to acquire the capital of the company by laws, change the borrower from nominee to the company under the tripartite agreement, accordingly, instead of the loan repaid to the foreigner by the nominee, the foreigner agrees to lend such loan to the company. Accordingly, the foreigner can enjoy the interest amount from the company.Option 2:
The foreigner is allowed to acquire the par‐ tial or whole capital of the company from the nominee to offset the loan borrowed by the nominee. At that time, the company is solely owned by the foreigner, the nominee is no longer the owner of the company.Option 3:
To change the borrower from nominee to the company under the tripartite agreement, accordingly, instead of the loan repaid to the foreigner by the nominee, the foreigner agrees to lend such loan to the company. At the right time, the foreigner can convert the loan owed by the company into the capital contribution to offset the loan.
I hope this is useful and informative to you. The above
information is provided by Nguyen Cong Lawyer.
Should you have any question, please let me know via
my email: [email protected].