Vietnam foreign exchange rules for dividend transfers

Vietnam foreign exchange rules allow a foreign-invested company to send profit abroad, but only in the right order. The company must first meet its financial duties to the state, and then move the money through a licensed bank. This guide walks through those steps in plain terms.

It is general information, not legal or tax advice. Rules are applied case by case, so confirm each step with your accountant and your bank.

The short answer

A foreign investor may send profit out of Vietnam. The law says so directly. The condition is that the investor first meets all financial duties to the Vietnamese state.

In practice that means three things. Pay the corporate income tax. Finish the yearly tax filings. Then ask your tax adviser what, if anything, the tax office needs before the money leaves. After that, the bank moves the funds.

Skipping the order invites delay, because the law ties the transfer to the tax duties being met first.

Sources: Law on Investment, Law No. 67/2014/QH13, adopted 26 November 2014 and in force from 1 July 2015, Article 11 (Vietnamese text on Wikisource, vi.wikisource.org).

Which rules apply

Three texts matter most. Each does a different job.

• The Ordinance on Foreign Exchange, No. 28/2005/PL-UBTVQH11, is the base law. It sets the framework for how foreign currency is held, bought and sent across the border.
• The Law on Investment, No. 67/2014/QH13, gives foreign investors the right to move profit abroad after they meet their financial duties. See Article 11.
• Circular 19/2014/TT-NHNN from the State Bank of Vietnam, issued on 11 August 2014, guides foreign exchange management for foreign direct investment into Vietnam.

Tax rules sit alongside these texts. Ask your tax adviser which filings the tax office expects before a transfer.

Sources: Ordinance on Foreign Exchange No. 28/2005/PL-UBTVQH11; Law No. 67/2014/QH13, Article 11; and State Bank Circular 19/2014/TT-NHNN, 11 August 2014.

What counts as profit you can send

The law lets a foreign investor send out several kinds of money. Article 11 lists the invested capital and the proceeds of closing an investment. It also lists income from the investment and business activity, and other money or property the investor owns lawfully.

For a dividend, the key point is that the money is income from the business. It should come from profit that is real, taxed and shown in your accounts.

Be careful with a year that ended in a loss. Dividends need profit that is available to share. Check your accumulated figures with your accountant before you plan a payout.

Source: Law No. 67/2014/QH13, Article 11.

Steps to follow before the transfer

1. Close the financial year and finish the accounts. Have them audited if your licence or your parent company requires it.
2. Finalise and pay corporate income tax for the year.
3. Clear any other tax or fee that is due to the state.
4. Hold the board or owners' decision that approves the dividend.
5. Ask your tax adviser whether the tax office needs a notice of the planned transfer, and how early. Keep a stamped copy of anything you file.
6. Give the bank your documents and ask it to send the funds to the investor's account abroad.

Plan the calendar around any notice period. A last-minute request can miss the date you promised the parent company.

Sources: Law No. 67/2014/QH13, Article 11.

The bank account and the bank's role

Foreign direct investment money moves through a direct investment capital account at a licensed bank in Vietnam. Circular 19/2014/TT-NHNN is the State Bank text that guides this account.

Profit paid to a foreign investor leaves from the company's account at an authorised bank. The bank will ask for proof. Expect to be asked for papers such as the investment licence, the accounts, the tax filings and the owners' decision. Ask your bank for its exact list.

Banks apply the rules with some care of their own. Ask yours for its written checklist at the start of the year, not in the week of the transfer.

Sources: State Bank of Vietnam Circular 19/2014/TT-NHNN, 11 August 2014; Ordinance on Foreign Exchange No. 28/2005/PL-UBTVQH11.

Common mistakes to avoid

• Paying a dividend before the tax return is final.
• Sending money through an account that is not the one the bank expects.
• Forgetting a filing the tax office expects, or filing it late.
• Missing papers, such as the signed decision on the dividend.
• Mixing a dividend with a loan repayment or a fee. Each has its own rules and its own paperwork.

Treat each transfer as its own file. Keep the decision, the tax papers, any filings and the bank slip together for later checks. A tidy file answers most questions from a tax inspector or a bank.

Sources: Law No. 67/2014/QH13, Article 11; Ordinance No. 28/2005/PL-UBTVQH11; Circular 19/2014/TT-NHNN.

Sources

Law on Investment, Law No. 67/2014/QH13, Article 11, Vietnamese text: vi.wikisource.org.

Ordinance on Foreign Exchange, No. 28/2005/PL-UBTVQH11.

State Bank of Vietnam, Circular 19/2014/TT-NHNN on foreign exchange management for direct investment.