In Article 2 of Circular 39/2016/TT-NHNN, there are clear regulations on customers who can borrow capital from credit institutions. Including both legal entities and individuals, including:
Legal entities established and operating in Vietnam, as well as legal entities established abroad but operating legally in Vietnam.
Individuals with Vietnamese nationality and also including individuals with foreign nationality. Therefore, according to the above regulations, if foreign individuals meet the conditions prescribed by law and credit institutions, they can still register for loans at banks.
2. Conditions for foreigners to borrow money in Vietnam
To be able to borrow money from banks in Vietnam, foreigners must meet the following conditions:
Be 18 years of age or older and have full civil capacity.
For those aged 15 to under 18, not have lost or limited civil capacity.
The purpose of the loan must be legal.
There must be a plan for using the capital that is considered feasible.
Have the ability to repay the debt on time.
3.Documents required for foreigners to borrow capital in Vietnam
When carrying out loan procedures in Vietnam, foreigners will need to prepare a set of documents including the following types of documents to submit to the Bank or credit institutions within the scope of Vietnam:
Notarized copy of the passport of the foreign individual needing to borrow capital.
Passport, visa/Temporary residence card or Work permit, along with – – – Permanent residence card with a period of residence in Vietnam of at least 03 months or more.
Temporary residence certificate and residential address in Vietnam.
Confirmation from the competent authority of the information of the individual borrowing capital currently residing in Vietnam.
Notarized copy of Marriage registration certificate (for cases where the foreign individual is married).
Documents proving that the foreigner has a stable income and the ability to repay bank loans, including: Copy of bank account statement for the last 3 months, Original salary payment notice, Copy of detailed land tax payment.
4. When are foreigners not allowed to borrow capital from Vietnamese commercial banks?
Investing in business activities prohibited by law.
Paying expenses or conducting transactions prohibited by law.
Purchasing goods or services in industries prohibited by law.
Buying gold bars.
Repaying credit capital at the same credit institution, unless it is to pay interest arising during the construction process, and this interest expense has been included in the total investment approved by law.
Repaying credit capital at another credit institution or repaying foreign loans, unless the loan is to repay the debt before maturity and meets the following conditions: Using the loan for business activities. The loan term does not exceed the remaining term of the old loan. The debt repayment period has not been restructured.
5. What are the regulations on bank loan conditions for foreigners to buy houses in Vietnam?
To borrow money from a bank to buy a house, foreigners need to comply with the following specific regulations and conditions:
Borrowers: Foreigners have the right to own houses in Vietnam, including those who work, live long-term in Vietnam or only come to Vietnam for investment or tourism. However, it should be noted that foreigners are only allowed to own a maximum of 30% of the total number of apartments in an apartment building and 10% of the total number of houses in a villa area.
Necessary documents: Foreigners need to provide legal documents such as passports, visas (or residence cards), documents proving the purpose of residence in Vietnam (labor contracts, investment licenses, etc.). All these documents must be translated into Vietnamese and notarized.
Property documents: A certificate of property ownership (red book, pink book) or a notarized house purchase contract is required. The bank will appraise the property value before accepting the loan.
Financial capacity: The bank will require the borrower to prove his/her financial capacity. This may include proof of monthly income, bank accounts, and credit history. The borrower must be able to repay the loan monthly to ensure the bank is confident in his/her ability to repay the loan.
Collateral: The property used as collateral is usually the house that the borrower buys. The bank will require the mortgage to be registered with the competent state agency to protect its rights in case the borrower fails to fulfill the debt repayment obligation.
Loan amount and interest rate: The loan amount for foreigners can be up to 80% of the property value. Loan interest rates will depend on each bank and can range from 7% to 12% per year, depending on the type of loan (fixed or floating).
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Hopefully, the above article by Alphahousing has provided an overview to answer the question of whether foreigners can borrow capital in Vietnam. Understanding the regulations carefully and preparing complete documents will help the borrowing process go smoothly, opening up opportunities for successful investment and business in Vietnam. If you need additional information or have any questions, do not hesitate to contact Alphahousing via Hotline: 0961.67.33.44 for detailed support and advice!
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