Keywords: Circular 32, restrictions, foreign exchange control, Vietnam, Vietnamese Dong

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.

Originally published 12 May 2014

Learn more about our Vietnam offices and Banking & Finance practice.

Visit us at www.mayerbrown.com

Mayer Brown is a global legal services organization comprising legal practices that are separate entities (the Mayer Brown Practices). The Mayer Brown Practices are: Mayer Brown LLP, a limited liability partnership established in the United States; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales; Mayer Brown JSM, a Hong Kong partnership, and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

© Copyright 2014. The Mayer Brown Practices. All rights reserved.

This article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein. Please also read the JSM legal publications Disclaimer.