This depends on the parties and type of transaction.
In Vietnam, unless expressly permitted by law, all transactions, payments, quoting prices in contracts, etc. (including conversion or adjustment of prices of goods and services, the value of contracts and agreements) of residents and non-residents must be performed in Vietnamese Dong (VND).
Vietnamese residents are permitted to perform the following transactions, among others, in foreign currency:
(a) As entities with legal person status, transfer internal capital in foreign currency between their accounts and accounts of their dependent units with no legal person status and vice versa.
(b) Contribute capital in foreign currency by bank transfer to perform foreign investment projects in Vietnam;
(c) Being entities trading in free-duty goods, allowed to list the prices of goods in foreign currency and receive payments in foreign currency by transfer or cash from the provision of goods (subject to compliance with applicable laws);
(d) Being entities trading in the domains of air transport, hotel, and tourism, allowed to list and advertise prices of goods and services in VND and equivalent foreign currency on websites, specialized-line publications (excluding menu and service price table) in foreign languages; and
(e) Quote, fix prices, and receive payments in foreign currency from non-residents for the export of goods and services.
Non-residents are permitted to (i) transfer foreign currency to other non-residents, and (ii) quote prices, and pay for export goods and services in foreign currency by transfer, to residents.
Is there an approval requirement (e.g. through Central Bank or another governmental agency) to use foreign currency in the country to pay:
Where the law permits the use of foreign currency in a transaction, no further approval is required.
For transactions where the use of foreign currency has not been expressly permitted by Vietnamese laws, parties can seek special approval from Vietnam’s Central Bank, the State Bank of Vietnam (SBV), to use foreign currency. In practice, such special approval is seldom granted.
Payment in foreign currency is permitted by law (without further approval) if the acquisition is between non-residents.
- to pay to contractors, or
In most cases, contractor payments must be in VND. If a foreign contractor performs the contract outside Vietnam, payment can be made in foreign currency without further regulatory approval.
- to pay salaries of employees?
Salaries of Vietnamese employees must be contractually stipulated and paid in VND. Salary payments to foreign employees may be paid in foreign currency without SBV or other government agencies’ approval.
Is there a limit on the amount of foreign currency in any transaction or series of related transactions?
There is no limit on the amount of foreign currency provided that the use of foreign currency is permitted by law for such transactions or series of related transactions. Do note that foreign currency remittance transactions must be verified by the remitting bank in Vietnam, which will request supporting documents for their verification.
Is there an approval requirement and a limit on how much foreign currency a foreign investor can transfer into the country?
Generally, there is no approval requirement or limit. Still, foreign investors will need to register the amount with Vietnamese authorities and transfer the registered amount of foreign currency to the correct bank account in Vietnam for later remittance.
However, if a foreign investor provides a mid or long-term loan in foreign currency (i.e., the loan term is more than one year) to a Vietnamese company, the borrower must obtain approval from SBV before the loan can be disbursed to the borrower in Vietnam.
Is there an approval requirement and a limit on how much domestic currency a foreign investor can buy in the country?
There is no approval requirement or limit on how much domestic currency a foreign investor can buy in Vietnam.
Can an investor buy domestic currency outside of the country and transfer it into the country to pay for an acquisition or to third parties for goods or services or to pay salaries of employees?
Yes, provided that the foreign investors comply with the Law on Investment, foreign exchange control ordinance and money transfer procedures.