THE STATE BANK OF VIETNAM ------------	SOCIALIST REPUBLIC OF VIETNAM Independence - Freedom – Happiness ----------
No. 03/TT-NH5	Hanoi, September 09, 1996

 

CIRCULAR

This Circular provides the guidelines for the implementation of temporary Regulation on the organization and operation of Finance Leasing Companies in Vietnam issued under the Decree No.64/CP by Prime Minister on 9 October, 1995.
On 09 October, 1995, the Prime Minister has signed Decree No. 64/CP promulgating Temporary Regulation on the organization and operation of Finance Leasing Companies.
The State Bank of Vietnam provides guidance on the implementation of the Decree as follows:

Section 1. GENERAL PROVISIONS

In this Circular, the following terms shall be interpreted and construed as follows:

1. Original bank or company means foreign bank or finance company, finance leasing company or international financial institution which is established under foreign law or international agreement respectively and makes capital contribution to a joint venture finance leasing company or in a finance leasing company with 100% foreign invested capital.

2. Vietnamese bank and finance company include commercial bank, development bank and state-owned or joint-stock finance company.

3. Registered capital means capital contributed by banks, finance companies and other enterprises and written in the Charter of the finance leasing company which provides that the registered capital shall be not less than the legal capital prescribed at Article 6 of the Temporary Regulation on the organization and operation of Finance Leasing Companies in Vietnam

Section II. ORGANIZATION, ADMINISTRATION, MANAGEMENT AND CONTRACT OF FINANCE LEASING COMPANIES

1. Finance Leasing Company is established under the following statutory forms:

1.1. Local Finance Leasing Companies established by Vietnamese banks, finance companies or those with other local enterprises in the form of state-owned enterprises, joint-stock or limited liability companies.

1.2. Joint-venture Finance Leasing Company established jointly by a Vietnamese party, consisting of one or more banks, finance companies or other enterprises (provided that there shall be the participation of at least one bank or finance company) and a foreign party, consisting of one or more foreign banks, finance companies, finance leasing company or international financial institutions on the basis of a joint-venture contract.

1.3. Finance Leasing Company with 100% foreign invested capital established in Vietnam by foreign banks, finance companies or finance leasing companies with capital wholly owned by them.

2. The duration of operation of a Finance Leasing Company in Vietnam shall be prescribed in the operating licence but shall not exceed 70 years from the date of issuance of the operating licence. Any extension of the duration of operation shall be subject to the written approval of the Governor of the State Bank of Vietnam. Each extended period shall not exceed the duration prescribed in the initial operating licence.

3. Administration, management and control of Finance Leasing Company.

3.1. In a Finance Leasing Company, its Board of Directors shall be responsible for administrating its operations; its Control Committee shall be responsible for controlling its operations and its General Director (Director) shall be responsible for managing its operations.

Members of the Board of Directors, Control Committee and General Director (Director) of the Finance Leasing Company shall be persons who are not in violation of provisions of Article 6 and 7 of Companies Law, Article 32 of State-owned Enterprise Law and one of the four clauses of Article 16 of the Ordinance on Banks, credit co-operatives and Finance Companies.

The election and appointment of Chairperson, Deputy Chairpersons, members of the Board of Director (Director) of a Finance Leasing Company shall only be legal effective after the approval by the Governor of State Bank of Vietnam is obtained.

In addition to the above-mentioned stipulations, General Director (Director) of a Finance Leasing Company has to meet the following requirements:

- Has demonstrated leadership capabilities and expertise in financial management and business administration;

- Hold a university decree in economics or finance or banking or equivalent; have at least five-year working experience in the field of finance and/ or banking.

3.2. The Finance Leasing Company must obtain prior written approval of State Bank of Vietnam for amendments to any of the following:

- Name of the company, Charter of the Finance Leasing Company;

- Increase or decrease of its registered capital;

- Contents referred to in Section VIII of this Circular; and

- Relocation of its office, opening or closure of its branch;

Split-up or merge with another one or more Finance Leasing Companies:

- Change of members of its the Board of Director, Control Committee and General Director (Director);

- Dissolution or liquidation of the Finance Leasing Company;

- Transfer or contributed capital in excess of 15% of its registered capital.

Section III. APPLICATION DOCUMENTS AND PROCEDURES FOR APPROVAL IN PRINCIPLE

1. With respect to Finance Leasing Companies established by Vietnamese banks, finance companies or those with other local enterprises:

1.1. The establishment Of Finance Leasing Company shall strictly observe establishment procedures stated in the State-owned Enterprises Law and the Companies Law.

1.2. Application documents and procedures for the issuance of operating licence shall be implemented in conformity with the Decision No. 05/NH-QD by the Governor of the State Bank of Vietnam dated 07 January 1991 to promulgate the regulation on procedures of granting the operation licence to Vietnamese credit institutions.

2. With respect to Joint-venture Finance Leasing Companies and 100% foreign invested capital Finance Leasing Company, the procedure consists of two steps:

2.1. Approval in principle

Application documents and procedures for an approval in principle allowing the establishment of Joint-venture Finance Leasing Company or Finance Leasing Company with 100% foreign invested capital (hereinafter referred to as Approval in Principle), shall include:

2.1.1. Application for approval in principle (Appendix 1 and 2)

2.1.2. Documents to be enclosed with the application:

- Draft Charter of the Joint-venture Finance Leasing Company or Finance Leasing Company with 100% foreign invested capital;

- Business plan for the operations in Vietnam, including detailed operations plan for the first three years;

- Summary of the co-operation between original banks or companies and Vietnamese counterparts;

- Memorandum of understanding on the establishment of the Joint-venture Finance Leasing Company (if any), draft joint venture contract between Vietnamese party and foreign party (for establishing Joint-venture Finance Leasing Company);

- In addition, parties having capital participation shall submit:

+ Legal document regarding their establishment;

+ Their current Charter;

+ Certificate issued by the competent authority permitting banks, finance companies, finance leasing companies and other to make capital contribution in a Joint-venture Finance Leasing Company or Finance Leasing Company with 100% foreign invested capital:

+ Certificate issued by the competent authority confirming the amount of registered capital and paid-up capital in the current year;

+ Balance sheets, profit and loss statements, operation reports for the last three years;

+ Brief summary of their establishment and development.

+ If necessary, Governor of State Bank of Vietnam may require other relevant supplemental documents.

2.1.3. Within 3 (three) months from the date of receipt of the required documents, the State Bank of Vietnam shall issue or refuse to issue the approval in principle for the establishment of the joint-venture Finance Leasing Company or the Finance Leasing Company with 100% foreign invested capital (Appendix 3)

2.1.4. Within 12 (twelve) months from the date of issuance of the approval in principle, the Joint-venture Finance Leasing Company or the Finance Leasing Company with 100% foreign invested capital shall complete the necessary documents for submission to the State Bank of Vietnam for granting of an operating licence. Beyond the above-mentioned deadline, the State Bank of Vietnam shall not consider the application for the operating licence.

2.2. The operating licence

Procedures and application documents for operating licence are stipulated as follows:

2.2.1. Application for operating licence of joint-venture Finance Leasing Company or Finance Leasing Company with 100% foreign invested capital (Appendix 4).

2.2.2. Power of attorney authorising a representative to sign documents (if any);

2.2.3. Enclosed documents are:

- Legal document on the right to own or to use the premises of the Finance Leasing Companys head-office in Vietnam;

- Legal documents on the appointment of members of the Board of Director, Control Committee and the members of the Board of the joint-venture Finance Leasing Company and the Finance Leasing Company with 100% foreign invested capital;

- Brief biography of members of the Board of Directors, Control Committee and the Management Board of the joint-venture Finance Leasing Company with 100% foreign invested capital (Appendix 5) including diploma of these members of the Board of Directors, Control Committee and the Management Board;

- Charter of the joint-venture Finance Leasing Company and the Finance Leasing Company with 100% foreign invested capital shall specify the following main contents:

+ Name and address of the head-office of the Finance Leasing Company;

+ Duration of operation;

+ Business activities;

+ Registered capital and way of contributing capital;

+ Organisation and structure of the Board of Directors, Control Committee and Management Board, Representative of the Finance Leasing Company before the Vietnamese Court and Vietnamese State Bodies;

+ Principle of finance, accounting and auditing matters;

+ Procedure and cases of dissolution.

+ Procedures for amending the Charter;

+ List of foreigners and number of Vietnamese nationals working in the Finance Leasing Company (Appendix 6)

+ Other relevant documents as may be required by the Governor of State Bank of Vietnam (if necessary)

2.2.4. In addition to above-mentioned documents, the joint-venture Finance Leasing Company shall submit to the State Bank of Vietnam the official Joint-venture Contract. The Joint-venture Contract shall specify:

- Name, address and nationality of representative of each party to the Joint-venture;

- Name of the joint-venture Finance leasing Company;

- Location of the head-office;

- Duration of operation;

- Registered capital: capital contribution ratio of each party with a breakdown in foreign currencies, in Vietnamese Dong, in kind (if any) and the capital contribution schedule;

- The number of personnel of the Finance Leasing Company specifying:

+ Vietnamese nationals:

+ Foreign nationals:

- Financial principles: accounting, earmarking and the use of funds;

- Principles of profit and loss distribution for parties to the joint-venture;

- Procedures for settlement of disputes arising from the execution and implementation of the joint-venture contract, procedure for liquidation and dissolution;

- Arbitration tribunal and governing law in case of dispute;

- Responsibilities of parties to the joint-venture in the execution and implementation of the joint-venture contract;

- Conditions for any amendment of or addition to the joint-venture contract; and

- Conditions for the joint-venture contract to be in force.

2.2.5. Within 3 (three) months from the date of receipt of the complete documents as stipulated under Item 2, Section III of this Circular, the State Bank of Vietnam shall consider and grant or refuse to grant the operating licence to the joint-venture Finance Leasing Company with 100% foreign invested capital.

2.3. Documents specified in Item 2, Section III shall be made in 02 (two) copies, one in Vietnamese version and the other in English version. The English copy of the original documents shall be certified by a Public Notary in the country of origin; translation copy in Vietnamese shall be certified by Vietnamese Public Notary;

Section IV. PROCEDURE FOR COMMENCEMENT OF OPERATION

1. Licence fee.

Within 15 (fifteen) days from the date of the issuance of the operating licence, the Finance Leasing Company shall pay to the State Bank a fee of 0.1% (one tenths of one percent) of its registered capital. The fee shall be non-refundable.

2. Registered capital of the Finance Leasing Company shall be contributed in the following forms:

2.1. Vietnamese Dong (VND): If the local Finance Leasing Companies are established by Vietnamese Banks, Finance companies or by Vietnamese Banks, Finance companies together with-other local enterprises, the registered capital shall be paid in Vietnamese Dong. Procedures for contributing capital shall be carried out in accordance with Decision No. 05/QD-NH5 dated 7 January 1991 by the Governor of the State Bank.

2.2. US Dollar (USD):

Foreign partners to the Joint-venture Finance Leasing Company or Finance Leasing Company with 100% foreign capital shall pay their capital contributions in USD.

Vietnamese parties to the Joint-venture Finance Leasing Company may pay their capital contributions in USD.

Vietnamese partners in the Joint-venture Finance Leasing Company may pay their capital contributions in USD or VND. In case where capital contribution is in VND, the amount of capital contribution shall be converted to USD at the offered exchange rate of commercial banks at the time the capital contribution is made.

2.3. Contribution in kind:

Capital contribution in kind must be for the for the necessary and direct use of the Finance Leasing Company and such contribution must be conducted in accordance with Item 3, Article 15 of the Temporary Regulation on the organization and operation of Finance Leasing Companies in Vietnam. The valuation and ownership transfer shall be subject to the prevailing laws and regulations.

3. Procedure for contributing capital in the case of a Joint-venture Finance Leasing Company and Finance Leasing Company with 100% foreign invested capital:

3.1. Within 6 (six) months from the date of issuance of the operating licence but not less than 15 (fifteen) days prior to the date of commencement of operations, the Finance Leasing Company shall deposit the full amount of the registered capital in an escrow account opened at State Bank.

3.2. Interest shall not be payable on the balance of the escrow account till the date of commencement of operation.

3.3. If part of the registered capital is made in kind, the Finance Leasing Company shall submit to the State Bank necessary documents certifying the ownership and the value of the registered capital in kind.

3.4. After the date of commencement of operation, the Finance Leasing Company is entitled to transfer the funds deposited in the escrow account to its account opened at the State Bank, Vietnamese commercial banks or joint-venture banks or foreign bank branches operating in Vietnam.

4. Commencement of operations:

4.1. Within 6 (six) months from the date of issuance of the operating licence by the State bank, the Finance Leasing Company shall complete all procedures concerning the registration of business, registration of the date of commencement of operation and commencement the operation;

4.2. The Finance Leasing Company shall be a legal entity from the date of the issuance of the certificate of business registration;

4.3. In the event that the Finance Leasing Company fails to commence its operation, the Finance Leasing Company shall submit application to

4.4. Upon expiry of the time limit, if the Finance Leasing Company cannot commence its business, the State Bank shall revoke the operating licence and refund the registered capital deposited in the escrow account (if any).

4.5. 30 days prior to the date of commencement of operation, the Finance Leasing Company shall publish the following contents in five consecutive issues of a daily local newspaper where the head office of the Finance Leasing Company is located and in five consecutive issues of a daily national newspaper the following:

- Full and abbreviated names of the Finance Leasing Company;

- Address of the head office; telephone number, facsimile number;

- Geographical operation coverage;

- Content of business;

- Names, nationalities of the Chairperson, Board member, Control Committee, General Director;

- Registered capital;

- Serial number, date of the operating licence issued by the State Bank;

- Serial number, date of the Certificate of business registration and name of the issuing agency;

- Other details deemed necessary by the State Bank;

- Date of commencement of operation.

Section V. COVERAGE AND CONTENTS OF OPERATIONS OF FINANCE LEASING COMPANY INCORPORATED IN VIETNAM

1. Coverage and contents of operation.

1.1. Coverage and contents of operation of Finance Leasing Company incorporated in Vietnam shall be specified in the operating licence issued by the State Bank of Vietnam.

1.2. Finance Leasing Company shall carry its businesses in accordance with provisions in the operating licence issued by the State Bank of Vietnam.

1.3. During the course of operation, if there is a need to broaden the coverage and contents of operations, the Finance Leasing Companies may submit an application to the State Bank of Vietnam for consideration;

1.4. Finance Leasing Company shall be entitled to borrow funds from foreign as well as local financial or credit organisations. Finance Leasing Company may issue bonds or other valuable papers upon the prior approval of the State Bank of Vietnam;

1.5. In principle, finance leasing transactions shall be conducted in Vietnamese Dong. In case Finance Leasing Company uses foreign currency to import leased asset under a finance lease contract with a lease term of more than one year, lease payments shall be determined in foreign currency. However, the payments shall be made in Vietnamese Dong according to the prevailing exchange rates on the date of settlement time.

When there is a need of foreign currency to repay lease payments (principal and interests), fees or to repatriate profits to the home country as provided by laws and regulations, Finance Leasing Company shall be entitled to buy foreign currency at a commercial bank nominated by the State Bank of Vietnam in accordance to the applicable regulations on foreign exchange control.

1.6. With regards to lending interest rate of the same maturity and other cost of a leasing transaction, Finance Leasing Company shall determine lease payments in accordance with the market rate and at a level acceptable to the Lessee. The State Bank of Vietnam shall set the maximum rate of lease rentals for each period.

2. Total value of leased assets to a single customer shall not exceed 30% of the Finance Leasing Companys own capital. A prior written approval must be obtained from the State Bank of Vietnam if this prescribed ceiling is to be exceeded.

3. Finance Leasing Company may open accounts at the State Bank of Vietnam or commercial banks permitted to operate in Vietnam. In case of a need to open an account abroad, prior approval must be obtained from the State Bank of Vietnam.

4. Finance Leasing Company shall be entitled to require Lessee to present necessary documents and information in relation to leasing transactions in accordance with laws and regulations. Finance Leasing Company has a right to deny a lease to a lessee who they think violates laws and regulations or if it is not satisfied with debt service capacity of a lessee.

5. The finance lease contract must uphold principles specified in Chapter III and IV of the Temporary Regulation on the organisation and operation of Finance Leasing Companies in Vietnam and must include principal contents of the finance lease contract (Appendix 7 hereto).

6. Finance Leasing Company shall fully and strictly observe all relevant provisions stipulated in the Ordinance on the State Bank, Ordinance on Banks, Co-operatives and Finance companies and other regulations promulgated by the Government of Vietnam as well as other relevant stipulations of Vietnamese laws and regulations.

Section VI. CONDITIONS AND PROCEDURES FOR FINANCE LEASING COMPANIES INCORPORATED IN VIETNAM TO OPEN A BRANCH

1. A Finance Leasing Company established and operating in Vietnam may set up branch(es) subject to the prior approval of State Bank of Vietnam . The Finance Leasing Company and its branch(es) shall be a legal entity.

2. Finance Leasing Company wishing to set-up a branch must satisfy the following requirement and conditions:

- Have operated for at least 36 (thirty six) months from the date of commencement of its operations. However, in special cases due to the compelling demand of the national economy, the Governor of State Bank of Vietnam may consider approving the set-up of branch of the Finance Leasing Company before the prescribed time.

- Be capable of operating efficiently and making profit.

- No violation of the Temporary Regulation on the Organization and Operation of the Finance Leasing Company in Vietnam.

- No violation of Ordinance on Banks, credit co-operatives and Finance companies and other relevant, laws and regulation of Vietnam.

3. Procedures and documents to apply for opening a branch:

- Application for opening branch must specify: reasons, locations and summarise experiences of designated branch manager;

- Latest report on the operations of the Finance Leasing Company;

- Business plan of the proposed branch;

- The copy of the operating licence and the certificate of business registration of the Finance Leasing Company;

- Written approval of the Peoples Committee where the branch is expected to be located;

- Written certificate evidencing ownership right or the right to use premises where the office of the branch is expected to be located;

- Appointment Decision and the curriculum vitae of the branch manager.

4. Branch of the Finance Leasing Company shall only be entitled to operate upon receipt of approval for setting up the branch and the certificate of business registration.

Section VII. FINANCE, ACCOUNTING AND REPORTING REQUIREMENTS

1. Fiscal year:

1.1. Fiscal year of Finance Leasing Companies shall begin on the first of January and end at the close of business on the thirty first of December of every calendar year;

1.2. The first fiscal year of the Finance Leasing Companies shall begin on the date of its commencement of operation and end on the thirty first of December of the same calendar year.

1.3. In cases where the joint-venture Finance Leasing Companies or Finance Leasing Companies with 100% foreign invested capital wishes to use the fiscal year of the country of origin for a purpose of preparing financial statements to be submitted to the original bank or company, it must obtain the prior written approval of the State Bank of Vietnam.

2. The Finance Leasing Companies shall be entitled to earmark for provisions. During the initial period, provisions shall be set at 3% of the total lease payments. If there shall be any change to the percentage, the State Bank of Vietnam shall provide specific stipulation.

3. Accounting:

3.1. Finance Leasing Companies shall conduct accounting practices in accordance with a system of accounts promulgated by the State Bank of Vietnam:

3.2. Currency used for accounting: Finance Leasing Companies shall use Vietnamese Dong as the accounting currency. If foreign bank branch or joint venture bank wish to use foreign currencies for accounting, it needs to get an approval from State Bank of Vietnam.

4. Reporting requirements:

4.1. Finance Leasing Companies shall strictly abide by regulations and rules on information and reports regime, namely:

4.1.1. Monthly reports shall be submitted by the fifteenth day of the next month at the latest and include:

a. The Balance sheet;

b. Statistic reports (in conformity with statistic requirements and a format of statistic chart as prescribed by the State Bank of Vietnam).

4.1.2. Semi-annual reports shall be submitted at the latest by the final date of the succeeding month, including:

a. Report as prescribed in the preceding item 4.1.1

b. Report on the activities in the last six months

4.1.3. Annual report shall be submitted within 60 (sixty) days from the final date of the fiscal year, including:

a. The balance sheet

b. Profit and loss statement, profit distribution statement

c. The annual report.

4.2. Financial annual report and the balance sheet of Finance Leasing Companies shall be certified by an auditing company. The appointment of the auditing company is subject to approval by the State Bank of Vietnam.

4.3. Joint-venture Finance Leasing Companies, Finance Leasing Companies with 100% foreign invested capital shall submit to the State Bank of Vietnam the annual reports of the original banks or companies no later than 4 months after the end of the fiscal year including:

a. The Balance sheet;

b. The profit and loss statement

c. The annual report of the financial year.

4.4. Within 30 (thirty) days after the occurrence of any of the following changes, the Finance Leasing Companies must submit a written report to the State Bank of Vietnam:

- Any changes in the Charter of the original banks or companies

- Personnel changes of the Board of Directors, Control Committee and the General Director (Director) of the original banks or companies

- Sudden changes of the financial situation.

4.5. All financial reports referred to in Item 4 of this Section shall be expressed in Vietnamese Dong;

4.6 All monthly, semi-annual and annual reports of Joint-venture Finance Leasing Companies or Finance Leasing Companies with 100% foreign invested capital must be made in 2 versions, one in Vietnamese and the other in English.

5. Finance Leasing Companies shall observe fully and promptly all their financial obligation and taxes in accordance with Vietnamese laws and regulations.

6. Finance Leasing Companies shall be subject to supervision and inspection by the State Bank of Vietnam;

Inspections shall be carried out in accordance with the Ordinance on Inspection and Regulation on Banking Inspection.

7. After closing the fiscal years and observing fully and promptly all financial obligations as stipulated by Vietnamese laws and regulations as well as earmarking for Funds as required by Ordinance on Banks Credit Cooperatives and Finance Companies, the foreign party of Joint-venture Finance Leasing Companies of Finance Leasing Companies with 100% foreign invested capital shall be allowed to repatriate its distributed profit as stipulated in Article 33 of the Law on foreign investment and the Article 70 of the Decree No. 18/CP dated 16 April 1993 of the Government Of Vietnam.

8. In the event of termination of operation or dissolution The repatriation of the registered capital of Finance Leasing Companies by foreign parties to the Joint-venture Leasing Companies shall be carried out in accordance with Item 2 Article 83 of the Decree No 18/CP dated 16 April 1993 of the Government of Vietnam.

Section VIII. OTHER PROVISIONS

1. Operating licence of Finance Leasing Companies shall be revoked in the following cases:

1.1. Failure to commence operation within 6 (six) months from the date of issuance of the operating licence or at the expiry of the time limit already extended by the State Bank of Vietnam or failure to satisfy fully procedures for commencement of operation;

1.2. Serious violation of the Temporary Regulation on the Organization and Operation of Finance Leasing Companies in Vietnam, of this Circular and other laws and regulations of Vietnam;

1.3. Split up into several independent organizations or merge with another organization without permission of the State Bank of Vietnam;

1.4. Voluntary dissolution;

1.5. Continuous loss-making, insolvent or its certificate of business registration is revoked;

1.6. Declared bankrupt;

1.7. Assignment of operating licence;

1.8. The operating licence issued by the State Bank of Vietnam has expired but is not renewed.

2. The adjustment of organization which have been engaged in finance leasing industry in Vietnam prior to the promulgation of the Temporary Regulation on the organization and operation of Finance Leasing Companies in Vietnam:

2.1. Within 12 (twelve) months from the date of promulgation of the Temporary Regulation on the organization and operation of the Finance Leasing Companies in Vietnam, all organizations involved in finance leasing activities must submit the following documents to the State Bank of Vietnam:

- The establishment and operating licence;

- Certificate of business registration;

- List of significant shareholders (in case of share holding companies), partners contributing capital (in case of joint-venture companies and limited liability companies);

- Documents evidencing the legal status of partners contributing capital such as charter, establishment permit, operating licence;

- In special cases, the Governor of the State Bank of Vietnam may require the submission of other relevant documents.

2.2. The State Bank of Vietnam shall give notice of approval or refusal for adjustment of organization to do finance leasing business.

In case of approval, the organization must submit all the documents required in Section III to the State Bank of Vietnam for granting the operating licence (finance leasing licence).

In case of refusal of approval, the organization must rescind without delay all new finance leasing transactions from the date of notification of the State Bank of Vietnam.

3. This Circular shall come into effect from the date of its signing.

4. Any amendment of and supplement to this Circular shall be subject to the consideration of the Governor of State Bank of Vietnam.

THE GOVERNOR OF STATE BANK OF VIETNAM Cao Si Kiem

 

APPENDIX 1

Date. . . . .

APPLICATION FOR APPROVAL IN PRINCIPLE TO ESTABLISH JOINT VENTURE FINANCE LEASING COMPANY IN VIETNAM

To: The Governor of State Bank of Vietnam

The parties to the joint-venture Finance Leasing Company hereby submit to the Governor of State Bank of Vietnam the application expressing their willingness to establish a joint-venture Finance Leasing Company in Vietnam. The application is to be signed by Chairpersons of the Board of Directors of Vietnamese parties and foreign parties to the Joint-venture. Attached to the application is a list of the following details:

1. Foreign party to the joint-venture: (detailed items for each foreign partner)

- Full name and its abbreviation:

- Address of the Head-office Building No. street, district, city, business address, telephone number, fax number.

- Registered (authorised) capital, specifying the paid-up capital.

- Date of incorporation, date of business registration and date of commencement of operation.

- The competent authority in charge of issuing operating licence, serial number and date of issue thereof.

- The official person(s) authorised to participate in the joint-venture

2. Vietnamese party to the joint-venture (same detailed items as for those of the foreign party to the joint-venture).

Joint-venture Finance Leasing Company established in Vietnam

- Name of the intended Finance Leasing Company

- City in Vietnam where the Head Office of the Joint-venture is intended to be located.

- Proposed registered capital, capital contribution ratio of the joint-venture, specifying:

- The amount in Vietnamese Dong

- The amount in Foreign currency

- Proposed number of persons of the Board of Directors and the Board of Management, composition of each party thereof.

For and on behalf of. . . . (Signature)

For and on behalf of. . . . (Signature)

Enclosure

 

APPENDIX 2

APPLICATION FOR APPROVAL IN PRINCIPLE TO ESTABLISH FINANCE LEASING COMPANY WITH 100% FOREIGN INVESTED CAPITAL IN VIETNAM

To: The Governor of State Bank of Vietnam

The foreign party(ies) hereby submit to the Governor of State Bank of Vietnam the application expressing the willingness to establish a Finance Leasing Company with 100% foreign invested capital in Vietnam. Attached to the application is a list of the following details:

1. Original Bank or Company (The Applicant)

- Full name and its abbreviation:

- Address of the Head-office: Building No., street, district, city, business address, telephone number, fax number.

- Registered (authorised) capital, specifying the paid-up capital.

- Date of incorporation, date of business registration and date of commencement of operation.

- The competent authority in charge of issuing operating licence, serial number and date, of issue thereof.

- The latest amending date of the Charter:

2. The Finance Leasing Company with 100% foreign invested capital intending to establish in Vietnam.

Name of the intended Finance Leasing Company.

- City in Vietnam where the head-office of the intended Finance Leasing Company is to be located.

- Proposed capital to be allocated by the original bank or company for the intended Finance Leasing Company with 100% foreign invested capital in Vietnam.

- Name, nationality and position of the proposed General Director (Director) of the Intended Finance Leasing Company.

- Coverage and contents of operations of the potential Finance Leasing Company.

 

APPENDIX 3

STATE BANK OF VIETNAM ------- No. /NH-GCT

SOCIALIST REPUBLIC OF VIETNAM Independence - Freedom - Happiness ---------------------------------- Hanoi, date ...........

APPROVAL IN PRINCIPLE FOR THE ESTABLISHMENT OF JOINT-VENTURE FINANCE LEASING COMPANY OF FINANCE LEASING COMPANY WITH 100% FOREIGN INVESTED CAPITAL IN VIETNAM

To:. . . . . . . . . .

In consideration of your application dated. . . for the establishment of Joint-venture Finance Leasing Company / Finance Leasing Company with 100% foreign invested capital, the State Bank of Vietnam approves in principle for . . . . . and requires:

Within 12 (twelve) months from the date of issuance of this Approval, . . . . . .. (the Applicant) must submit to the State Bank of Vietnam a complete set of the required documents for the application for an operating licence in pursuance to Section Item of the Circular No. 03/TT-NH5 dated 09 February 1996 for its consideration.

The Governor of State Bank of Vietnam

APPENDIX 4

APPLICATION FOR OPERATING LICENCE OF THE JOINT-VENTURE FINANCE LEASING COMPANY (FINANCE LEASING COMPANY WITH 100% FOREIGN INVESTED CAPITAL) IN VIETNAM.

To: His excellency the Governor of the State Bank of Vietnam.

In accordance with the Approval in Principle No issued on 199.. . by the Governor of State Bank of Vietnam to grant an operating licence.

1. Full and official name of the Finance Leasing Company.

2. Abbreviated name of the Finance Leasing Company ( if any)

3. Official address of office of the Finance Leasing Company.

4. Business address: telephone number, fax number.

5. Registered capital of the Finance Leasing Company and the capital contribution ratio of each party, specifying the amount in VND, the amount in foreign currency and the amount in kind (if any).

6. Coverage and contents of intended operation of the Finance Leasing Company to be included in the operating licence.

7. Names, dates of birth, nationalities of members of the Board of Management and the Control Committee.

8. Number of officials and staff of the Finance Leasing Company, of which: Number of persons with foreign nationality: Number of persons with Vietnamese nationality:

9. Proposed date of commencement of operations of the Finance Leasing Company.

Date.................

For and on behalf of. . . . (Signature) (Full name)

For and on behalf of. . . . (Signature) (Full name)

Note: The legal representatives or persons authorised by the parties to the joint-venture Finance Leasing Company must sign on the application.

APPENDIX 5

BRIEF BIOGRAPHY

OF MEMBERS OF THE BOARD OF DIRECTOR, MEMBERS OF THE BOARD MANAGEMENT AND CONTROL COMMITTEE OF THE JOINT-VENTURE FINANCE LEASING COMPANY OR THE FINANCE LEASING COMPANY WITH 100% FOREIGN INVESTED CAPITAL.

1. Full name

Alias:

2. Sex: Male/Female

3. Date of birth:

4. Place of birth:

5. Nationality:

6. Residence address:

7. Professional qualifications

8. Previous occupations and positions:

9. Position in the Joint-venture Finance Leasing Company (the Finance Leasing Company with 100% foreign invested capital) in Vietnam:

10. Current positions in other organisation(s):

Certification of the competent authority:

Signature:

 

APPENDIX 6

LIST OF PERSONS WITH FOREIGN NATIONALITY WORKING IN THE JOINT-VENTURE FINANCE LEASING COMPANY (THE FINANCE LEASING COMPANY WITH 100% foreign invested capital) IN VIETNAM

- Name of the original banks, companies (or name of parties to the joint-venture):

- Name of the Joint-venture Finance Leasing Company (the Finance Leasing Company with 100% foreign invested capital):

- Address:

- Telephone number:

- Telex: Fax:

Date

1. Number of officials and staff of the Finance Leasing Company, of which:

- Number of persons with foreign nationality.

- Number of persons with Vietnamese nationality.

2. List of persons with foreign nationality:

Order	Full Name	Sex	Nationality	Professional Qualification	Position

Signature
(Chairperson of the Board of Directors (Director)
(Authorised representatives of parties to the Joint-venture)

APPENDIX 7

APPLICATION FOR LEASING FACILITY

To: Finance Leasing Company

From :

1. . . . . .hereby propose the Finance Leasing Company to purchase the following asset:

2. . . . . . .agree to sign the finance lease contract with the Finance Leasing Company . . . . . . . . .and observe provisions stipulated in the contract.

3. Requested specifications:

a. Equipment-Machinery (Asset): Name and brief description:

b. The Supplier: Name, address

c. Purchase date

d. Purchase price in . . . . . .

Date. . . . . . .

Signature

 

FORM OF A FINANCE LEASE CONTRACT
(Applicable to finance leasing companies in Vietnam)

A. PARTIES TO THE FINANCE LEASING CONTRACT:

- Name, address of the Finance Leasing Company (the Lessor);

- Name, address of the Guarantor(s)(individual or organisation) (if any).

B. THE FINANCE LEASING CONTRACT MUST PROVIDE A SCHEDULE OR BRIEF OUTLINE OF ITS CONTENTS AS PROVIDED FOR IN CHART 1, THE SCHEDULE NORMALLY SET FORTH:

1. The parties to the finance leasing contract

2. Reference identifications of the lease asset, including, inter alia, serial number, registration number, . . .

A description of the leased asset, including technical specifications, components, operational fitness of the leased asset

3. Name and address of the Supplier.

4. Location where the leased asset will be stored, installed or operated.

5. Purchase price of the leased asset.

6. Lease term

7. Calculation basis for the lease payments

8. Overdue interest rate: (penalty interest will be charged on lease payments overdue for payment).

9. Specific provisions: purchase option, security deposit or other security requirements, guarantee or mortgage conditions.

C. Conditions precedent: If there is a time lag between the execution of the documentation and delivery of the leased asset, there may be a list of preconditions which must be fulfilled by the Lessee before the Lessors obligations under the finance leasing contract becomes enforceable. These may relate to: the execution and delivery of all documentation in the form as agreed and the receipt of legal ownership right to the leased asset by the Lessor

D. CONTRACTUAL COVENANTS:

1. The Lessor represents and warrants that

- The information provided to the Lessor in the application for lease facility must be accurate and complete.

- Upon receipt of the leased asset, the Lessee shall confirm the current conditions and the fitness to perform of the leased asset.

- The Lessee shall pay promptly all lease payments and other sums as stipulated in the finance leasing contract.

- The Lessee shall pay all registration fees, licence fee, lease rentals, taxes and other obligations with respect to the leased asset.

- The Lessee shall pay overdue interest (if any)

- The Lessee shall maintain the leased asset in good condition and serviceable working order, strictly follow the manufacturers instructions as to the use and training of operating personnel and shall enter into maintenance and service contracts.

- The Lessee shall not modify or alter the leased asset without the Lessors prior written approval.

- The Lessee shall replace without delay all missing or damaged parts.

- The Lessee shall allow the Lessor or any person authorised by the Lessor to inspect the leased asset at any time wherever the leased asset may be located.

- The Lessee shall keep leased asset at all time within the Lessees control and shall not remove the leased asset from its original location of installation without the Lessors written authorisation.

- The Lessee shall provide the Lessor with regularly updated financial reports and other required information for purpose of making an assessment of the Lessees financial position.

- The Lessee shall indemnify the Lessor against all losses and damage to the leased asset.

- The Lessee shall indemnify the Lessor against all losses and damage to the leased asset.

- The Lessee shall agree to enter into comprehensive insurance contract for the leased asset for the whole lease term

- The Lessees shall pay to the Lessor all cost, charges, duties, fees and other expenses incurred by the Lessor in connection with the preparation, execution and implementation of all contracts.

- The Lessor shall have the right to affix ownership or identification marks onto the leased asset.

- The Lessee shall not sell, assign, pledge or mortgage the leased asset or allow a lien to be placed on the leased asset.

- The Lessee shall not delete or alter the identification marks of the leased asset.

- The Lessee shall not use the leased asset for the purposes of which it is neither designed nor intended.

2. The Lessor represents and warrants that it agrees to lease term and allow the Lessee to use the leased asset provided that the Lessee continues to fulfil its obligations under the lease contract.

3. Other provisions:

- The Lessee has no liability regarding the condition, warranties or representations related to the condition of the leased asset or its quality or suitability for the purpose for which the leased asset is required by the Lessee.

- The Lessor is not liable for the delivery of the leased asset to the Lessee.

- The Lessor has no liability under the law for injury or damage sustained by defects in the equipment.

- The Lessor shall not be liable in respect to any claim made against the Lessee by third parties for loss, injury or damage caused by the leased asset.

- The Lessor has no liability for any conditions, warranties or representations made by the supplier.

E. Ownership: Ownership to the leased asset rests at all times with the Lessor and nothing in the lease contract should imply the transfer of ownership right to the Lessee at any time prior to the expiration of the lease term.

F. Loss of leased asset: if the leased asset is stolen, destroyed or damaged, the Lessee must immediately notify the Lessor. All monies recovered from insurance should belong to the Lessor.

G. EVENTS OF DEFAULT: THE LESSOR MAY IMMEDIATELY TERMINATE A LEASE CONTRACT BY WRITTEN NOTICE UNDER THE FOLLOWING CONDITIONS:

1. Lease payments or any other amounts due under the lease contract which remain unpaid for a reasonable number of days after payment notice has been served to the Lessee.

2. The Lessee or its guarantors is insolvent or bankrupt.

3. The leased asset is irreparably damaged.

H. Upon termination of the lease contract because of default by the Lessee, the Lessee must:

1. Immediately return the leased asset to the Lessor.

2. Pay to the Lessor all unpaid rentals and overdue rentals at the date of termination.

3. Indemnify the Lessor for all losses suffered by the Lessor including ..

4. Notices: all notices of demand should be in writing and delivered to the addresses stipulated in the lease contract.

Chart 1. LEASE SCHEDULE

THE LESSEE Name: Address:		THE LESSOR Name: Address
The Leased asset		Model No.	Serial No
Quantity	Item
Lessors cost of the leased asset
Location of the leased asset
Leased specifications -lease term: year(s) from the date of the delivery receipt signed by the Lessee -. . . . Monthly/quarterly rentals of each to be paid in advance/arrears - The first rental payment is due on the date of the delivery/ receipt and subsequent rental payments on . . . . day of each month/quarter after the date of the delivery/ receipt signed by the Lessee.
Overdue interest rate. . . . . . .. . .per month
Specific provisions