New Regulations on Financial Leasing Effective from July 1, 2024
- phanhoainamba
- Jul 6, 2024
- 2 min read
On June 28, 2024, the Governor of the State Bank of Vietnam issued Circular 26/2024/TT-NHNN, which regulates financial leasing activities of general financial companies and financial leasing companies. This Circular will take effect on July 1, 2024.
Applicable Entities:
General financial companies and financial leasing companies as specified in the Law on Credit Institutions 2024.
Organizations and individuals related to the financial leasing activities of these entities, as mentioned in Clause 1, Article 2 of Circular 26/2024/TT-NHNN.
This Circular stipulates the principles of financial leasing; conditions for lessees; financial leasing interest rates; fees related to financial leasing activities; appraisal and decision-making for financial leasing; repayment of principal and interest on financial leases; restructuring the repayment terms of financial leases; rights and obligations of the lessor; rights and obligations of the lessee; financial leasing contracts; early termination of financial leasing contracts; and electronic approval of financial leasing... Specifically:
Principles of Financial Leasing: Guidelines and regulations for conducting financial leasing activities.
Conditions for Lessees:
Lessees must meet the conditions outlined in Article 5 of Circular 26/2024/TT-NHNN.
For leasing in foreign currency, lessees must meet requirements for paying for imported leased assets, repaying and making lease payments in foreign currency, and having sufficient foreign currency from production and business revenues to repay the lease.
Financial Leasing Interest Rates: Interest rates are agreed upon by both parties but must not exceed the maximum lending rate set by the State Bank at the time of signing the financial leasing contract.
Related Fees: Fees related to financial leasing activities are mutually agreed upon but must comply with legal regulations.
Appraisal and Decision-Making: The lessor must appraise the lessee’s financial capacity, the leased asset, and the leasing file before deciding to lease.
Repayment of Principal and Interest: Lessees must repay the principal and interest according to the schedule and payment method stated in the financial leasing contract.
Restructuring Debt Repayment Terms: Both parties may agree to restructure the debt repayment terms if there are changes in the lessee’s financial conditions.
Rights and Obligations of Lessor and Lessee: Detailed regulations on the rights and obligations of both the lessor and lessee.
Financial Leasing Contract: Contracts must be in written form and include all contents required by the Circular.
Early Termination of Lease Contract: Contracts can be terminated early under specific conditions set by the Circular.
Electronic Leasing Approval: Both parties may opt for online approval for leasing transactions not exceeding 500 million VND, provided they meet the required conditions.
Contact W&A for more detailed information!
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