|May 13, 2014|
Previously published on May 12, 2014
To restrict the use of foreign currencies in Vietnam, the State Bank of Vietnam issued Circular No. 32/2013/TT-NHNN (Circular 32) on 26 December 2013.
Circular 32 reinstates a basic principle of the regulations on foreign exchange control in Vietnam according to which, in the territory of Vietnam, unless specifically provided for by law, all transactions, payments, listings, quotations, advertising, price determinations, and any other form of conversion or adjustment of prices must be made in Vietnamese Dong.
Circular 32 also lists circumstances under which the use of a foreign currency is permissible, which include (among others) the making of contributions via transfer by residents who are permitted to make capital contributions in a foreign currency to carry out a foreign investment project in Vietnam; and the payment of salaries, allowances or bonuses by residents or non-residents who are organisations, to non-residents or residents who are foreign individuals working in Vietnam, etc.
This means that an expatriate employee working for a company in Vietnam is entitled to receive his or her salary in a foreign currency.
Under any circumstances not specified by Circular 32, approval from the State Bank of Vietnam, which is given on a case-by-case basis, is required for the use of a foreign currency.
Any organisation or individual who breaches the provisions on restrictions on the use of a foreign currency will be (depending on the seriousness of the breach) subject to handling in accordance with the law.