Post by Naipour on Nov 7, 2010 6:51:55 GMT 4
Companies and residents in Vietnam are all subject to foreign currency restrictions placed by the government.
While the Vietnamese dong is the country’s official currency, U.S. dollars are widely-used as a more stable alternative to the fluctuating domestic currency. The government has been devaluing the dong often to cap inflation and its expanding trade deficit. According to Ho Chi Minh City’s Department of Planning & Investment, resident organizations in Vietnam are able to use foreign currency for the following purposes:
* making payments to foreign countries/partners for imported goods
* paying for goods or services from domestic organizations that are allowed to collect foreign currency
* paying domestic foreign currency loans and foreign loans
* selling to credit organizations allowed to carry out foreign exchange activities
* purchasing financial instruments denominated in foreign currency
* converting into instruments of payment in foreign currency in accordance with the law
* transferring foreign currency investment capital abroad
* paying salaries of foreigners working in enterprises with foreign investment
Non-residents in the country also have to follow restrictions and may only use foreign currency in the following cases:
* making payments to foreign countries/partners for imported goods
* paying for goods or services from domestic organizations that are allowed to collect foreign currency
* selling to credit organizations allowed to carry out foreign exchange activities
* converting instruments of payment in foreign currency in accordance with the law
* remitting foreign currency abroad
* withdrawing cash in foreign currency and transferring to bank accounts for the purposes of paying expenses of individuals working in the organization when they are sent abroad
* paying salaries, bonuses and allowances to foreign residents and non-residents working for the non-resident organization
* withdrawing cash in foreign currency for other purposes provided for by the law
* transferring to foreign currency accounts of other non-residents; and
* giving gifts, donating, and bequeathing in accordance with the law
There have been reports of U.S. dollar shortages occurring in Vietnam since demand for the currency outstrips its use in business. Last year, the government instructed seven state-owned firms to unload their U.S. dollar reserves to fulfill local currency demands.
While the Vietnamese dong is the country’s official currency, U.S. dollars are widely-used as a more stable alternative to the fluctuating domestic currency. The government has been devaluing the dong often to cap inflation and its expanding trade deficit. According to Ho Chi Minh City’s Department of Planning & Investment, resident organizations in Vietnam are able to use foreign currency for the following purposes:
* making payments to foreign countries/partners for imported goods
* paying for goods or services from domestic organizations that are allowed to collect foreign currency
* paying domestic foreign currency loans and foreign loans
* selling to credit organizations allowed to carry out foreign exchange activities
* purchasing financial instruments denominated in foreign currency
* converting into instruments of payment in foreign currency in accordance with the law
* transferring foreign currency investment capital abroad
* paying salaries of foreigners working in enterprises with foreign investment
Non-residents in the country also have to follow restrictions and may only use foreign currency in the following cases:
* making payments to foreign countries/partners for imported goods
* paying for goods or services from domestic organizations that are allowed to collect foreign currency
* selling to credit organizations allowed to carry out foreign exchange activities
* converting instruments of payment in foreign currency in accordance with the law
* remitting foreign currency abroad
* withdrawing cash in foreign currency and transferring to bank accounts for the purposes of paying expenses of individuals working in the organization when they are sent abroad
* paying salaries, bonuses and allowances to foreign residents and non-residents working for the non-resident organization
* withdrawing cash in foreign currency for other purposes provided for by the law
* transferring to foreign currency accounts of other non-residents; and
* giving gifts, donating, and bequeathing in accordance with the law
There have been reports of U.S. dollar shortages occurring in Vietnam since demand for the currency outstrips its use in business. Last year, the government instructed seven state-owned firms to unload their U.S. dollar reserves to fulfill local currency demands.