OPENING BANK ACCOUNTS FOR REPRESENTATIVE OFFICES AND NON-JURIDICAL ENTITIES

OPENING BANK ACCOUNTS FOR REPRESENTATIVE OFFICES AND NON-JURIDICAL ENTITIES

According to Circular 02/2019 effective from March 1, 2019, the provisions on the mandatory closure of bank accounts for non-juridical entities have been removed by the State Bank. This Circular simultaneously abrogates Circular No. 32/2016 and Circular No. 02/2018.

Formerly, March 1st of 2019 was the deadline for banks to coordinate with clients who are  non-juridical entities such as foreign representative offices, households, co-operative groups, private enterprises, law offices to complete contracts for opening new bank accounts, payment accounts usage, or account termination. The purpose is to make the mandatory conversion to personal payment accounts.

OPENNING BANK ACCOUNTS FOR REPRESENTATIVE OFFICES AND NON-JURIDICAL ENTITIES

The Department of Examination of Legislation under the Ministry of Justice has issued a document stating that Circular No. 32/2016 stipulating that the subjects who can open payment accounts at banks include individuals and legal entities is illegal, restricts the rights of non-juridical entities prescribed by law, as well as restricts the rights of banks in opening payment accounts for non-juridical entities.

According to the provisions of the new Circular, organizations that can open payment accounts are no longer limited to a legal entity but also include other types of organizations that are non-juridical entities such as foreign representative offices, households, co-operative groups, private enterprises, law offices. However, the payment account holder of an organization under the new provisions in Circular 02 is an organization instead of a legal representative or representative authorized by the organization. The payment account holder is allowed to authorize others to use his/her payment account. Specifically, the foreign representative office must carry out the authorization procedure for using an account in Vietnam.

In addition, representative offices should especially note that it is only allowed to receive money from parent companies to pay for activities permitted in Vietnam in accordance with representative offices functions, as well as make accounting vouchers and books (cashbook & petty cash) to support the tax inspection for future years.

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