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Banking & Finance

Restrictions on foreigners' banking may be eased

Released at: 19:06, 15/07/2017

Restrictions on foreigners' banking may be eased

Illustrative image (Source: vnmedia.vn)

Foreigners may soon be able to deposit money at local banks without myriad documentation.

by Quang Huy

The State Bank of Vietnam (SBV) is drafting a new circular that will guarantee non-residents in Vietnam more rights to make deposits in both Vietnam dong and foreign currencies at local banks and prevent cash speculation.

Under the proposed law, non-residents, including foreigners who are visiting, studying, or working in Vietnam, even if they don’t have permanent resident status, will be able to deposit funds at local banks using money from their payment accounts.

Under the current law, non-residents must meet strict requirements to be able to save at local credit institutions. For deposits in Vietnam dong, foreigners must provide documents such as work permits, labor contracts, and salary statements. Local banks can only accept savings in foreign currencies from expats who have lived in Vietnam for at least 12 months and whose visa remains valid.

The relaxed rule will contribute to the country’s policy of encouraging cashless payments and management over the foreign currency market, according to the central bank. It will also help curb speculation on the market and ensure the legal rights and interests of non-residents in the country.

Local experts have hailed the proposition, saying that if implemented it would allow local banks to attract idle funds from the expat community in Vietnam.

Banking expert Mr. Nguyen Tri Hieu said there is no reason to bar foreigners from making deposits in Vietnam dong when the opening of payment accounts is permitted. “In terms of risk management, payment accounts are likely to carry more risks than savings accounts,” he explained.

Foreigners working permanently in Vietnam should be encouraged to make deposits from their salaries, wages and investments earned in the country, Mr. Hieu said, adding that it is also a source of capital for Vietnam.

According to the draft circular, non-resident organizations include branches, representative offices, and diplomatic agencies and consulates in Vietnam. Individuals with non-residence include foreigners who work for the above entities, those who are here on business, healthcare or travel, and those who stay in the country for less than 12 months.

The move is in contrast to a draft SBV circular last year that laid out guidelines for deposit transactions in Vietnam, in which “depositors of Vietnamese and foreign currencies” are limited to “resident Vietnamese citizens” only.

According to the Expat Insider 2016 survey conducted on over 14,000 respondents from 174 nationalities by InterNations, a web-based international community for people living and working abroad, Vietnam ranked eleventh on the list of overall best places for expats.

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