CIRCULAR No CIRCULAR No. 08/2001/TT-NHNN OF SEPTEMBER 6, 2001 GUIDING THE IMPLEMENTATION OF THE GOVERNMENT�S DECREE No. 16/2001/ND-CP OF MAY 2, 2001 ON THE "ORGANIZATION AND OPERATION OF FINANCIAL LEASING COMPANIES" Pursuant to Article 42 of the Government�s Decree No. 16/2001/ND-CP of May 2, 2001 on the "organization and operation of financial leasing companies", the State Bank hereby guides the implementation of a number of articles of the Decree, which fall under its competence as follows: Section I. GENERAL PROVISIONS 1. Interpretation of terms and phrases: In this Circular, the following terms and phrases shall be construed as follows: 1.1. The lessees mean organizations and individuals operating in Vietnam that directly use the rented assets for their production and business purposes, including: a) Individuals with business registration; b) Family households; c) Enterprises; d) Other organizations being subjects entitled to borrow capital of credit institutions. 1.2. Foreign credit institutions mean banks, financial companies and financial leasing companies of foreign countries or international financial organizations, which have been established under foreign or international laws, participating in the capital contribution to joint-venture financial leasing companies, financial leasing companies with 100% foreign capital. 1.3. The legal capital means the minimum charter capital amount required by law for the setting up of a financial leasing company. 1.4. The charter capital means the capital amount contributed by organizations and individuals and recorded in the charter capital of a financial leasing company. 1.5. Founding members mean organizations and individuals that adopt the first charter of the financial leasing company. 2. Forms of financial leasing companies: A financial leasing company is a non-bank credit organization or a Vietnamese legal entity, conducting the principal operation of financial leasing. Financial leasing companies are established and operate in Vietnam in the following forms: 2.1. The State-run financial leasing companies are the financial leasing companies which the State invests capital in, sets up and manages their business operations. The granting of establishment and operation licenses for the State-run financial leasing companies shall comply with the separate guidance of the State Bank. 2.2. The joint-stock financial leasing companies are those set up in form of joint-stock companies, where organizations and individuals contribute capital according to the regulations of the State Bank and other provisions of law. 2.3. The attached financial leasing company of a credit institution is the one that conducts independent cost accounting and has the legal person status, is set up by a credit institution with its own capital which acts as the owner according to the regulations of the State Bank and other provisions of law. 2.4. The joint-venture financial leasing company is the one that is set up with capital contributed by the Vietnamese party embracing one or several Vietnamese credit institutions and/or enterprises, and the foreign party embracing one or several foreign credit institutions, on the basis of a joint-venture contract. 2.5. The financial leasing company with 100% foreign capital is the financial leasing company set up with capital of one or several foreign credit institutions under the provisions of Vietnamese laws. 3. The operation term of a financial leasing company shall comply with the provisions in Article 5 of Decree No. 16/2001/ND-CP of May 2, 2001 of the Government. 4. Charter capital The charter capital of financial leasing companies shall be contributed in the following forms: 4.1. In money: a) Vietnamese currency (VND): For the State-run financial leasing companies, the financial leasing companies attached to credit institutions and the joint-stock financial leasing companies, the charter capital shall be contributed in Vietnam dong. b) US dollars (USD): For joint-venture financial leasing companies and financial leasing companies with 100% foreign capital, the charter capital shall be contributed in USD. c) The Vietnamese parties to joint-venture financial leasing companies may contribute charter capital in US dollars or Vietnam dong. In case of capital contribution in Vietnam dong, the contributed charter capital amounts must be converted into US dollars at the average exchange rate on the inter-bank foreign currency market between Vietnam dong and US dollars, announced by the State Bank at the time of capital contribution. 4.2. In kinds: They must be assets with valid papers evidencing the ownership and necessary assets in service of operation of the financial leasing companies (excluding assets used for lease). The valuation and transfer of ownership of the capital-contributing assets shall comply with the current provisions of Vietnamese law. 5. Charter capital contribution percentages, transfer of contributed capital proportion and profit sharing in joint-venture financial leasing companies and financial leasing companies with 100% foreign capital: 5.1. The charter capital contribution percentages: The charter capital contribution proportions of the foreign parties and the Vietnamese parties in joint-venture financial leasing companies shall be agreed upon by the parties and approved by the State Bank. The capital contribution proportion of the foreign party must not be lower than 30% of the charter capital of a financial leasing company. 5.2. Transfer of the contributed capital proportion: a) The Vietnamese parties and the foreign parties in joint-venture financial leasing companies may transfer their respective contributed capital amounts to other parties in the joint ventures, but must ensure the charter capital contribution percentage prescribed at Point 5.1. b) The financial leasing companies with 100% foreign capital may transfer their capital, but have to give priority to Vietnamese organizations. c) The percentage of and conditions for the transfer of capital of joint-venture financial leasing companies must be specified in their charters and be in conformity with the provisions of law. Where the charter capital amount to be transferred exceeds the prescribed level, the capital transfer shall be effective only after it is approved by the State Bank. d) In cases where profits are generated from the transfer of capital of financial leasing companies, the transferors shall have to pay taxes according to the provisions of Vietnamese law. 5.3. Profit sharing and risk-bearing rates: The parties joining the joint-venture financial leasing companies shall share profits and bear risks of the joint-venture financial leasing companies according to their respective capital contribution proportions, except otherwise agreed upon by the parties in their joint- venture contracts. Section II. PROVISIONS ON LICENSING THE ESTABLISHMENT AND OPERATION OF FINANCIAL LEASING COMPANIES 6. The conditions for a financial leasing company to be granted the establishment and operation license (hereinafter called the license for short): 6.1. It wishes to conduct financial leasing activities in the geographical areas where the operation is applied for; 6.2. It has sufficient legal capital prescribed in Decree No.82/1998/ND-CP of October 3, 1998 of the Government, concretely as follows: a) The legal capital of a joint-stock financial leasing company or an attached financial leasing company of a credit institution is VND 50 billion. b) The legal capital of a joint-venture financial leasing company or a financial leasing company with 100% foreign capital is USD 5 million. 6.3. Its founding members are organizations or individuals, that have prestige and financial capability; 6.4. Its administrator and executive officials have full civil act capacity and professional qualifications suitable to the operations of the financial leasing company and compatible to the regulations of the State Bank; 6.5. It has a draft establishment and operation charter compatible to the Law on Credit Institutions, the Government�s Decree No.16/2001/ND-CP of May 2, 2001 on organization and operation of financial leasing companies and other provisions of law; 6.6. It has feasible business plan; 6.7. Besides the above-mentioned conditions, the foreign parties in the joint-venture financial leasing companies and the financial leasing companies with 100% foreign capital shall also have to: a) Be permitted by competent bodies of foreign countries to conduct banking activities or financial leasing activities; b) Be permitted by competent bodies of foreign countries to operate in Vietnam. 7. A dossier of application for a license shall include: 7.1. The application for the license: a) For the attached financial leasing company of a credit institution: It shall be signed by the Managing Board chairman or the person authorized by the Managing Board chairman. b) For the joint stock financial leasing company: It shall be signed by the founding members or the authorized representative of the group of founding members. c) For the joint-venture financial leasing company, the financial leasing company with 100% foreign capital: It shall be signed by its representative at law or the lawfully authorized representatives of the capital contributing parties. 7.2. The draft charter: The charter of a financial leasing company must have the following principal contents: a) The name and head-office location of the financial leasing company; b) The operation duration; c) The operation contents and scope; d) The charter capital and mode of capital contribution; e) The procedures for election, appointment and dismissal of Managing Board members, the general director (director) and the Control Board; f) The tasks and powers of the Managing Board, the Control Board and the general director (director). g) The legal person representative of the financial leasing company; h) The rights and obligations of shareholders; i) The financial, accounting, inspecting and internal auditing principles; j) Cases of dissolution and the dissolution procedures; k) Procedures for charter amendment. 7.3. Operation plan: clearly stating the contents, mode and areas of operation, usefulness to the economy, in which the concrete plan for operation in the first three years must be clearly defined; 7.4. The list and curricula vitae, diplomas evidencing the capabilities and professional qualifications of the founding members, the Managing Board members, the Control Board members and the general director (director) of the financial leasing company; 7.5. The plan on charter capital contribution, the list and charter capital contribution level commitments of the capital contributing parties; 7.6. The financial situation and relevant information on major shareholders; 7.7. The approval of the location of the financial leasing company�s head office by the concerned provincial/municipal People�s Committee. 8. Apart from the documents prescribed at Point 7, Section II of this Circular, the dossier of application for license of an attached financial leasing company of a credit institution shall also include the following documents: 8.1. The document signed by the chairman of the Managing Board of the credit institution or the person authorized by the Managing Board chairman on the source and level of charter capital allocated to the financial leasing company. 8.2. The documents related to the credit institution being the owner include: a) The establishment decision or the establishment and operation license, the business registration certificate; b) The current charter; c) The State Bank�s decision approving the charter capital; d) The financial balance sheet, the profit and loss statement already audited and the report on situation of operation in three latest years. 9. Apart from the documents prescribed at Point 7 Section II of this Circular, the dossier of application for license of a joint-venture financial leasing company or a financial leasing company with 100% foreign capital shall also include the following documents: 9.1. The charters of the capital-contributing parties; 9.2. The licenses of the capital-contributing parties; 9.3. The document issued by a competent body of the foreign country permitting the foreign party to operate in Vietnam in form of joint-venture financial leasing company or the financial leasing company with 100% foreign capital. Where the law provisions of the original foreign country do not require this document, there must be evidence certified by competent body(ies); 9.4. The financial balance sheets, the audited loss and profit statements and the reports on the situation of operation in the three latest years of the capital-contributing parties; 9.5. The joint- venture contract for a joint-venture financial leasing company. A joint-venture contract shall include the following principal contents: a) Name and address of the joint venture financial leasing company; b) Addresses and representatives of the joint venture parties; c) The operation duration of the joint venture; d) The charter capital: capital contribution proportion, the contributed capital level of each party, capital contribution plan clearly stating the capital amounts in foreign currency(ies), in Vietnam dong and in kind (if any); e) The rights and obligations of the parties; f) The quantity and proportion of members of the Managing Board, the Control Board and the Directorate of the joint venture parties; g) The projected number of bureaus and boards as well as the quantity of officials and employees of each party in the initial stage (the number of people bearing the Vietnamese nationality, the number of people bearing foreign nationality(ies); i) The principles for accounting, book-keeping, reporting, fund establishment and use, profit and loss sharing to the joint-venture parties; j) Procedures for settlement of disputes between parties over the performance of the joint-venture contract, the procedures for liquidation, dissolution and/or merger of a joint-venture financial leasing company; k) Conditions for amendment, supplementation of the joint-venture contract. 10. Provisions on submission of dossiers of application for licenses: 10.1. Dossiers of application for licenses of joint-stock financial leasing companies, attached financial leasing companies of credit institutions shall be made in two sets in Vietnamese language. The documents in the dossiers must be the originals; in case of the copies thereof, they must be certified by the agencies which have issued the originals or certified by the State notary public; 10.2. The dossiers of application for licenses of the joint-venture financial leasing companies and the financial leasing companies with 100% foreign capital must be made in two sets, one in Vietnamese and one in English or French. The dossiers made in foreign countries must be the originals or copies certified by competent bodies. The documents which must be consularly legalized include: The permits of foreign competent bodies permitting the foreign credit institutions to conduct banking operation or financial leasing activities and the documents of the competent foreign agencies permitting the foreign parties to operate in Vietnam in form of the joint-venture financial leasing company or the financial leasing company with 100% foreign capital. The Vietnamese copies and the Vietnamese translation of foreign language documents must be certified by the notary public offices of Vietnam or Vietnamese diplomatic missions or consular offices overseas; 10.3. Organizations and individuals applying for licenses must send to the State Bank of Vietnam two sets of dossiers as provided for at Points 10.1 and 10.2. 11. Confirmation of dossiers and time limits for consideration and granting of licenses: 11.1. After receiving the complete dossiers, the State Bank shall give written confirmation of the completeness of the dossier sets to the representative of the capital-contributing parties. 11.2. The time limit for consideration and granting of licenses: Within 90 (ninety) days as from the date of receiving the complete dossiers of application for licenses, the State Bank shall grant or refuse to grant the licenses. In case of refusal, the State Bank must issue documents justifying the reasons therefor. 11.3. The licenses shall be granted in set forms by the State Bank, including: a) The licenses for the attached financial leasing companies of credit institutions and the joint-stock financial leasing companies; b) The licenses for joint-venture financial leasing companies and the financial leasing companies with 100% foreign capital. 12. Licensing fees: 12.1. The fee level for each licensing (or each extension of license): a) For the attached financial leasing companies of credit institutions and the joint stock financial leasing companies, the fee level paid for each licensing or each extension of the license shall be equal to 0.1% of the charter capital level; b) For the joint-venture financial leasing companies and the financial leasing companies with 100% foreign capital, the fee paid for each licensing or each extension of the license shall be USD 10,000 (ten thousand USD). 12.2. Within 15 days as from the date of being granted the licenses, the licensed financial leasing companies shall have to pay fees into the accounts at the transaction bureaus of the State Bank or its branches in the provinces or cities where the companies are headquartered. The vouchers on fee payment must be copied and sent to the State Bank (the Department for Banks) for file keeping. 12.3. The fee amounts prescribed at Point 12.1 above must not be deducted into the charter capital and shall not be refunded in any circumstances. 13. The transfer of charter capital of financial leasing companies into frozen accounts: 13.1. At least 30 days before their inauguration, the financial leasing companies shall have to: a) Transfer all their charter capital contributed in money into the frozen accounts opened at the transaction bureaus of the State Bank or its branches in the provinces or cities where the companies are headquartered, without enjoying interests thereon, and with written certification by the holders of the frozen accounts. The written certification of the money amounts paid into the frozen accounts must be sent to the State Bank (the Department for Banks); b) The charter capital amounts contributed in kind must have documents on transfer of the right to own the assets contributed as capital to the financial leasing companies under the provisions of Vietnamese law. 13.2. After their inaugural dates, the financial leasing companies may release the money amounts from frozen accounts into their operation accounts opened at the State Bank, commercial banks, branches of foreign banks or joint-venture banks operating in Vietnam. 14. Business registration: 14.1. After being granted licenses, the financial leasing companies shall have to make business registration strictly according to the current law provisions on business registration; 14.2. The financial leasing companies shall have to send to the State Bank the originals or notarized copies of their business registration certificates; 15. Commencing operation: 15.1. Within 12 (twelve) months as from the date of being granted licenses, the financial leasing companies shall have to complete all the following necessary conditions to commence their operation: a) Having their charters approved by the State Bank; b) Having obtained the business registration certificates; c) Having obtained the State Bank�s written certification of the full contribution of their charter capital; d) Having the legal documents on the right to own or the right to use the head- offices of the financial leasing companies in Vietnam; e) At least 30 (thirty) days before commencing their operation, having to publish on daily Vietnamese-language newspapers

Thông tư 08/2001/TT-NHNN